Nationalising debt and privatising profit on the railway

The taking of the East Coast main line away from National Express is only the beginning of dealing with problems with the railways in Britain. According to a report in the Independent (27/7/2009) some MPs fear that more services will have to be “rescued”.
What does this mean? A Government that has been intent on privatising virtually every thing in sight has a change of heart? Lord Adonis, late of an education reform that is having to be dismantled, announced that the East Coast franchise would be up for grabs after only a year. As withe Post Office fiasco it’s tax payers picking up the debts with profitable bits going to the private sector.
It’s not as if we have a coherent plan for transport when there is urgency required in the face of carbon emissions and the need for viable, affordable public transport. One idea is announced: a high speed link to include Birmingham, Manchester, Glasgow was raised. Now its electrification of lines between London and Swansea. The arguments are right that electric powered trains don’t have to carry their own fuel or emit pollution, although the power still has to be generated somehow. Some nice ideas outside London and the South East region but no back up with cash. Is there any with commitments to Iraq, Afghanistan and bankers? Is UK PLC going bankrupt?
The following article is by Neil Clark who the Socialist Labour Party will invite to speak in Birmingham in the autumn.


Derail this Great Train Robbery
by Neil Clark
Nationalise the ­losses, privatise the gains. That’s the Government’s policy when it comes to the banks and now, it seems, it ­applies to the railways, too.
Transport Minister Lord ­Adonis last week announced that the Government would take back the East Coast line, the busiest inter-city route in the country, from private operator National Express, which had warned it was likely to default on a franchise payment. Adonis says public ownership will only be temporary and the Government will tender for a new operator from the end of 2010.
So why should the taxpayer be expected to pick up a £700 million bill now and another private operator be allowed to come along and cream off the profits later? Why should National Express, which made more than £80 million profit last year, be allowed to keep its other two rail franchises?
Franchising has meant that the private firms have effectively struck a no-lose bet. If business goes well, they make huge profits. If it doesn’t, they walk away and the taxpayer picks up the tab.
Rather than being a temporary, emergency measure, the Government’s decision to take this line into public ownership should be the first step in the re-establishment of a publicly owned railway. Such a policy would not only be popular, it would save a fortune.
Britain’s privatised train companies have been milking the public purse for years. The totals involved make the amount that Ronnie Biggs and his Great Train Robbers stole pale into insignificance but while Biggs remains behind bars, Britain’s 21st- ­century train robbers continue to fleece the public. Fares have consistently risen above the rate of inflation and, earlier this year, some went up by as much as 11 per cent. In May, fares for railcard users rose by up to 50 per cent. It really doesn’t have to be like this.
For an example of how a unitary publicly-owned railway can deliver enormous benefits to ­users, we don’t need to look far. In Belgium, fares are up to 20 times cheaper than in Britain, while the ticketing system is simpler. In Britain, there can be up to 200 different fares for the same journey. In Belgium, the price of a ticket is determined by distance: a system that used to operate in Britain, too, before “market-­pricing”. Prices don’t go up in the rush hour: Belgian Railways simply puts on more trains, which it can do because, unlike Britain’s privatised rail operators, it owns its own rolling stock. Moreover, Belgian fares actually drop by 50 per cent at weekends to make it easier for people to get out and about. The fundamental difference between the railways in Belgium and the rest of mainland Europe, and those in Britain, is that there, railways are publicly owned and run as a public service.
In Britain, since privatisation, the need to maximise profits has come before all other considerations, often with disastrous consequen­­­ces for passengers. Because hiring extra carriages from the leasing companies is deemed too expensive, Britain’s rail firms try to ration existing capacity by pricing people off trains. The result is frequent overcrowding.
Restoring the railways to public ownership could bring relief to Britain’s long-suffering passengers and usher in a new golden age. The reopening of stations closed by the misguided Dr Beeching in the Sixties, the introduction of extra services and the reduction in fares to the Euro­pean average would help persuade millions of Britons to leave their cars and take the train.
This summer, many of us will experience the delights of rail travel in Belgium and other European countries.
The question we need to be asking Lord Adonis is: why, if other countries can have affordable, reliable, publicly-owned railways with easy to understand ticket pricing, do we in Britain have to put up with such a ludicrously ­expensive, fragmented and user-unfriendly system?
Neil Clark is co-founder of the Campaign for Public Ownership (CPO)
http://campaign4publicownership.blogspot.com/

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