Let’s get rail renationalisation back on track

In the 1990s Tory Ministers in the Major government claimed that selling-off the UK’s railways would bring “benefits to passengers and taxpayers”.  Such a claim now appears laughable after years of rail fragmentation and chaos: rising fares, little sign of improved services and an estimated loss to the taxpayer of £1.2bn each year since privatisation.  Indeed, the announcement of three per cent above inflation fare increases and the ongoing saga of the west coast mainline contract have only served to further underline the anger and frustration of many rail users about the current state of our railways.

In the 16 years since privatisation the concept of publicly-owned railways, still commonplace in the rest of Europe, has remained popular with people in Britain. Opinion polls consistently find more than two-thirds of the public still favour renationalisation.  As rail expert Christian Wolmar wrote recently: “The privatised railway companies have never managed to win over the majority of the public to their cause, and they remain the butt of considerable criticism, some fair and some unfair.”  Of course, Labour resisted calls from rail experts, unions and passengers to take the railways back into public ownership between 1997 and 2010.  However, we are now operating in a different policy and financial environment, where renationalisation is no longer ruled out.  Ed Miliband made this clear at his speech at the TUC last year, stating Labour should look at all the options for rail services in the UK, including mutual, public and private options.

This welcome change in approach has been helped by the recent publication of the Transport for Quality of Life report, Rebuilding Rail.  The independent report, commissioned by the rail unions and published in June this year, sets out a detailed plan for effective renationalisation of the railways.  It has stimulated debate on the subject and rekindled hope that the party could embrace the idea of publicly-owned railways as a means of countering big hikes in rail fares and preventing private companies from profiteering at the expense of the taxpayer.  Labour’s shadow transport secretary said the report makes a “coherent case for reform” and underlined the current policy review is “looking at all options to make our railways work better for passengers”.

One of the absurdities of privatisation the report highlights is the fact that franchises are increasingly run by subsidiaries of the German, Dutch and French state railways with profits made by those companies supporting cheaper rail fares in their own nations.  Rail passengers in the UK, who already pay the highest fares in Europe and face inflation busting price hikes in January, will rightly ask in whose interest are the railways being run?

Rebuilding Rail offers a blueprint for a better, more efficient and accountable railway system, run in the national interest, of the kind found in most countries on the continent.  It argues that the current fragmented system is failing taxpayers and passengers, with only private train operators and shareholders benefiting, an analysis with which few could disagree. The report makes the case for rail operations and infrastructure to be reintegrated and franchising phased out. A major objection to renationalisation has always been the projected cost. But the report demonstrates how public ownership could be achieved at a saving to the public purse of over £1bn per year through cheaper borrowing costs, the removal of shareholders’ dividends and reduced fragmentation.

Importantly, and quite differently from the old top-down, monolithic British Rail model which preceded privatisation, the report also argues for passengers, rail staff and politicians to be given a clearer, democratic role in decision-making on the railways. This offers a vision of a railway system which is more responsive to the needs of service users, which values and respects those working within it. By developing new regional transport authorities, such a system could also ensure that taxpayers, who make such a vital contribution to the funding of the railways, have a genuine voice on how train services in their area are developed and delivered.

But there are many other ideas being developed for our railways, which the party can draw on. The People’s Rail campaign, launched by the Co-op in 2009, has been making the case for a more accountable Network Rail and a mutual rail network.  Its model is for community-owned railway franchises, where the service users and rail staff would be in charge. This compliments the case for greater democratic control made in Rebuilding Rail and there is no reason why a publicly-owned railway could not incorporate mutualisation and the strong passenger voice such a model would provide.

As the travelling public face the prospect of above inflation fare increases, stations being closed and fewer rail staff, ending the privatisation experiment could also be a genuine vote-winner at the next election. We have a financially viable and potentially highly effective model for bringing about the kind of modern and accountable rail infrastructure that successive post-war governments have failed to deliver. There is widespread and growing support for such a policy, and not only from the ‘usual suspects’ in the rail unions and lobby.

This is an idea which has the potential to resonate with the kind of people Labour needs to connect with again, commuters in seats in the south and Midlands where we must win again in order to form the next government.  It is radical, but eminently affordable and deliverable. Advocating a publicly-owned railway, run in the national interest, would contrast sharply with the Tories’ continuing support for a failing privatised system, which is widely regarded as having failed to deliver any of the promised benefits.

Labour should now seize the opportunity and put the case for a publicly-owned and accountable railway system, run in the interest of passengers and the public, at the heart of its transport policy for the next election.