Would a public railway get businesses on the right track?

Posted on Dec 1st, 2015 | Employment law

Jeremy Corbyn has certainly been called a lot of things since taking leadership of the Labour Party, with ‘radical’ being one of the adjectives popping up most frequently.

This isn’t terribly unreasonable – the parliamentary veteran of 33 years has ruffled a few feathers within his own ranks in his time. However, the first concrete policy he announced upon election as leader was far less radical than many media sources care to admit. In fact, when asked, voters on all ends of the political spectrum seem to at least entertain the idea of bringing the country’s railways back into public hands:

Freelancers and contractors who have had to use the train to travel for business recently may well be able to empathise with the notion that something needs change. Last year, to use an albeit extreme example, frustrated travelers on the 07.29 Brighton to London Victoria service enquired about its punctuality record after noticing it never seemed to run on time.

Their suspicions were confirmed when they were told that the train had failed to roll in at its scheduled time of 8.35am on a single occasion in 2014.

Calls for action had rapidly grown following a 2013 report by the Trades Union Congress entitled ‘The Great Train Robbery’, which revealed that when train companies do make a profit, barely any of it is actually re-invested in the railways. Those firms receiving the largest state subsidies, it says, spend on average over 90% of their profits on shareholder dividends.

Manuel Cortes, general secretary of the Transport Salaried Staffs’ Association, is furious:

“Passengers are sick to their back teeth of private rail companies making profits at their expense. A ‘no ifs, no buts’ pledge to bring our railways back into public ownership is a clear vote winner.”

Indeed, of those nationalisation advocates questioned by Yougov, the most popular argument (chosen by 62%) was that the railways should be accountable to taxpayers rather than shareholders. The second most popular reason (unsurprisingly) was that rail fares would go down – surely an attractive prospect if you’ve ever had to turn down work due to skyrocketing travel expenses.

This may not be much of a bombshell, but the UK’s rail service is the most expensive in Europe. Rail fares have continually soared above the rate of inflation, and from January will have risen by up to a staggering 35% since 2010. Comparatively, the National Minimum Wage for full-time workers has increased by just 13.5%.

This year, on the day fares went up by an average of 2.2%, the Prime Minister defended the rise:

“We’ve made sure that rail fares cannot go up by more than inflation. So the rail fare increase this year, as last year, is linked to inflation, and I think that’s right. In previous years it’s gone up by more than inflation. But, of course, what you’re seeing on our railways is a £38bn investment project. And that money is coming, of course, from taxpayers, from the government, and from fare payers as well.”

No more messing around

The ill-fated Ed Miliband regime had attempted to throw a bone to campaigners by proposing that the public sector and not-for-profit bodies would be allowed to bid for franchises. One must wonder, however, where said nonprofits would have found the funds to compete with the large private sector firms.

Taking a much clearer stance, his successor Corbyn told the Independent:

“We know there is overwhelming support from the British people for a People’s Railway, better and more efficient services, proper integration and fairer fares. On this issue, it won’t work to have a nearly-but-not-quite position. Labour will commit to a clear plan for a fully integrated railway in public ownership.”



The East Coast Mainline

The East Coast Mainline, until this year, had been publically owned since 2009 when National Express walked out on their contract. It has become the go-to example in this country of a nationalised rail service run efficiently.

East Coast was tremendously successful during this period, boasting a 91% customer satisfaction rate according to the National Rail Passenger Survey (the national average was 52%). East Coast also required less public subsidy than any of the 15 privately run rail franchises in Britain – just 1% of the line’s income – compared to an average of 32%.

Not only did it result in £1 billion being paid back to the Treasury, but was also the most efficient franchise in the UK according to the Office of Rail Regulation. This success makes the decision to award an 8 year contract to Stagecoach and Virgin Trains as of March of this year even more controversial – although the companies will reportedly pay a total of £3.3bn to the Government to operate the East Coast line over the course of the contract.

British Fail

There’s a reason that politicians advocating re-nationalisation tend to veer away from explicitly campaigning to ‘Bring Back British Rail’. Many who were using the service before it was sold off in 1993 do not look back with rose-tinted glasses.

Telegraph Columnist Adrian Quine wrote:

“Remember the days being jolted about on rickety old “slam door” commuter trains? I do. Today’s rolling stock is smoother, and has working air conditioning. Even the loos no longer resemble a latrine from some exotic gap-year adventure destination.

“It is far too easy to romanticise the fifty years of nationalised rail in Britain; were they to reflect on the dramatic reduction in the number of passenger journeys made by train during that period it might bring to mind the strikes, poor customers service and the total lack of investment.”

Whilst this a rarely disputed viewpoint, one cannot help but be reminded of philosopher Noam Chomsky opining “that’s the standard technique of privatisation: defund, make sure things don’t work, people get angry, you hand it over to private capital.”

Indeed, in 2004 ASLEF (the train drivers’ union) general secretary, Lew Adams stated on a radio phone-in program: “All the time it was in the public sector, all we got were cuts, cuts, cuts. And today there are more members in the trade union, more train drivers, and more trains running.”

But British Rail was then, and this is now. Campaigners are adamant that the same neglect of sufficient funding could not be shown to a new, successful system.

“This isn’t a call for a throwback to a ‘70s British Rail” says Brighton Pavilion MP Caroline Lucas, who presented the Railways Bill Jeremy Corbyn signed in 2013. “The modern, efficient, clean, affordable services enjoyed in other parts of Europe offer a much better blueprint than our own past.”

How renationalisation would actually work

As per the Railways Bill, the proposal is for each route to be renationalised when its franchise expired, which would be a very drawn out process considering a mere five out of 16 franchises are due to expire between 2020 and 2025.

When explaining the process of putting the Railways Bill together, Caroline Lucas states in her book ‘Honourable Friends – Parliament and the Fight for Change’:

“The approach is so simple that when I introduced a bill into Parliament to put it into effect, the lawyers only needed forty-three lines to set out all the necessary powers. Compare that to the hundreds of lines of primary legislation needed to privatise the railways in the first place.”

It’s important to point out that returning the railways to public ownership would not immediately result in a more reliable service. Many of the delays and disruption to services relate to the infrastructure owned and maintained by Network Rail, which is already nationalised. In July 2014, Network Rail was was fined £50 million by the rail regulator, and another £2 million this summer due to the delays caused by their lack of punctuality.

But Garry Hassell, Brighton and Hove City RMT branch Secretary, said: “The return of the railway transport system back into public hands is the only sensible option for commuters, travellers, manufacturers and workers alike.”

As the Conservatives take aim at the UK’s ‘productivity crisis’, many will point to the fact that a workforce that can’t get much done without reliable and affordable public transport. But the Tories – who first privatised British Rail in 1994 under John Major – showed no intention of bringing it back into public ownership in their most recent election manifesto.

WeOwnIt and Corporate Watch found that the UK could save £352 million by bringing the railways into public ownership, equalling £13 per household. If decisions were made based on Yougov polls, we’d be moving back to a public service today. But which way the cookie crumbles depends on the fate of the Railways Bill, or more specifically the votes of MPs.

The public needs to display a strong political will if the Bill is to be successfully passed, and despite the Labour leader’s steadfast stance, time will tell whether he has the sway to convince enough MPs, including those tied to his own party, to get onboard.

Have you lost work because of poor public transport? Is this the answer? Let us know in the comments below!

Photos by TheJRB & Mattbuck

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