Tuesday 13 March 2012
The challenge of modern railways
Talking about the railways in the UK can get you into trouble. People are cross with the quality of the trains, overcrowding and, at times, livid with rage when the talk turns to fares. The public perception is that the privatization of the railways in 1993 was a shambles and resulted in a fragmented railway system, worse levels of service, and ever higher prices. It signified everything that was wrong with the privatization of public services under the Thatcher and Major governments.
Often, this view goes hand in hand with nostalgic reminiscing about the glorious past of British Rail. Or. sometimes, people point to railways on the continent which seem to offer better service, for a fraction of the price of what people here pay in fares and subsidies.
There is some truth in this picture. The railways in the UK are one of the most expensive in Europe for commuters who have to travel at peak times. The controversial fare policies of train companies mean that those who have no choice but to take the train to commute early in the day to work are most penalised. The fragmentation of the railways also prevent coherent local and regional transport policies. In the UK, it is virtually impossible to optimise transport systems across sectors, to integrate them effectively in regional hubs and design a consistent transport approach which would focus on reduction of bottlenecks in private and public transport networks.
Yet, the ultimate failure of railway privatization may have to do with the promise politicians made when they embarked on this mad cap plan: that public subsidy to the railways would come down to, eventually, a level where private train companies would not require any public support.
So where does this leave us today? Ed Miliband has said repeatedly that the train companies are ‘ripping ordinary people off’ by increasing fares above inflation. And Will Self has recently announced on Question Time (once again) that we should re-nationalise the railways.
There is no doubt that the way in which the railways were privatized produced a fragmented rail system. There were good reason why the Major Government used the Railway Act to separate track and franchises for networks, the Swedish example of privatization along similar lines being one of them. However, the result in the UK was disastrous. This is less a judgement on privatization than on the type of privatization used. The German railways are fully privatized yet the holding company retains control over rolling stock, networks and tracks.
But the nostalgia for a nationalized railway disregards the main fact of recent railway history: an unprecedented rise in the number of passenger journeys. In 1993 there were about 0.73 billion journey made in the UK. By last year, this figure had doubled to 1.4 billion journeys.
This is a phenomenal rise which would prove difficult for any transport system. The newly privatized railways had to deal with a doubling of capacity within the last 18 years. Comparing the railways of the 1980s and early 1990s with the railways of 2011 simply tells us very little unless we acknowledge that today, railways are a profoundly different kind of fish to those of the past. Would the old British Rail have coped with these challenges?
We wont know, but the fact is that privatization brought £2.3 billion in terms of investment to the table between 2006 and last year (Source at DfT website). This may be dwarfed by the figures of annual subsidy (in 2010 at the tune of £4.6 billion) but it is still something that we, the tax payer, would have had to come up with if the old British Rail was still around.