Rail privatisation in Britain - a warning

There have been a lot of disasters on the railways in Britain. But the real disaster has been rail privatisation itself. There was a lot of rhetoric from the Tories about the 'dynamism and efficiency' private capitalism would bring, but experience has shown that the only people to benefit from rail privatisation have been the profiteers, not the general public that has to use the railways. So what is the alternative?

Ladbroke Grove, Hatfield... there's been a lot of disasters on the railways in Britain of late. In fact the real disaster has been rail privatisation itself. The railway system under public ownership had been run down and was losing money for donkey's years. All of a sudden the Tories doubled the money they were pumping in - to fatten the system up for privatisation. They had decided to give our money away to their big business friends. The Tories spoke about 'risk transfer' to the private sector, but it seems that risk has really been transferred to the passengers (sorry - 'customers'). There was a lot of rhetoric from the Tories about the 'dynamism and efficiency' private capitalism would bring, but the way the whole thing was done was entirely political. Major proposed to make sure this was one omelette that couldn't be made back into an egg.

The railways were not privatised as a going concern. Instead the system was split up between over a hundred different companies. The Health and Safety Executive warned about the fragmentation of decision-making before the sell-off. "Unless considerable care is taken to set up systems to ensure that new operators are properly equipped and organised, there can be no confidence that risk will be effectively controlled right from the start and that important matters do not fall between the safety arrangements of the various parties". In the rush no such systems were set up.

Railtrack was in charge of maintenance of the permanent way, while train operating companies ran the services, usually as regional monopolies. Then there were the rolling stock leasing companies. Porterbrook ROSCO was privatised for £527 million in January 1996 and sold on for £825 million seven months later. The managing director made £36 million and three other managers trousered £70 million. Eversholt ROSCO was privatised for £580 million and resold for over £726 million a year later. This was outright theft. The Tories in their last years in office were nicking everything that was not nailed down to the floor.

Who were the train operating companies? Richard Branson, the maverick capitalist, is currently making a hash of the west coast line. Connex is actually owned by a French water utility. Lack of even the most rudimentary knowledge about railways is not seen as any kind of disqualification to running one. In fact a slew of shadowy consortia have emerged in the wake of the worldwide trend to privatisation who tender for all kinds of work. Their only known skill is how to boss workers about. An obvious question is how these firms are to make 'cost savings' while paying out massive dividends to shareholders. The case of rail privatisation shows that there are no cost savings, or none that passengers can see anyhow. British railways are now the most expensive in the world.

The first thing these 'custodians' of the public interest do is sack anyone with any skill or experience. Skilled and experienced workers are expensive workers! Under privatisation the number of railway workers fell from 159,000 to 92,000 in the five years to 1997. Staff involved in track maintenance went from 31,000 to between 15,000 and 19,000 over the same period. The Tories had deliberately privatised the system so that nobody was in charge and nobody was there to take the blame. In other words they had privatised it in such a way that accidents were bound to happen. Railtrack was contracting maintenance work out to firms like Balfour Beatty. They in turn, like every film about heists that go wrong you have ever seen, were hiring workers in pubs. On one occasion they put a colour blind, inexperienced worker in charge of a team fixing rails. Perhaps it is necessary to explain to these cowboys - with railway signals it is important to be able to tell the difference between red and green.

A recently published book (Ian Jack - The crash that stopped Britain) shows how this chaos led directly to the Hatfield tragedy. "When a contracting firm repairs a track, it 'takes possession' of it. Trains are stopped for the duration of these 'track possession, and this may in itself cost Railtrack if it cannot meet its obligations to the train operating companies, and their trains are cancelled or delayed... A delay to a train in the London morning rush hour, for example, can cost Railtrack £200 a minute at Waterloo. One delayed train can cause other delayed trains for hundreds of miles down the track, with Railtrack compensating their operators for each. A bill of £250,000 is quite easy to run up. Railtrack, therefore, can penalise the contractor, gathering in money with one hand as it pays out with the other." He sums up, "Whatever emotion this system appeals to - greed, fear, blame, retribution - it is unlikely to inspire either trust or careful workmanship." This was illustrated by Professor Baldry in giving evidence before the Ladbroke Grove enquiry. "We were given on several occasions evidence that if, for example, track workers from Scotland had been sent down to York to work on a bit of track that was unfamiliar to them, they find themselves working with other employees of a different contractor. Their instinct is to ask local people about the nature of the track. The local people may have been told by their employer, 'Don't talk to these persons because they are employed by the opposition'."

This is the kind of atmosphere that led to the 'gauge corner' cracking at Hatfield not to be reported and dealt with for two years. Four people died as a direct result.

Jack's account gives the reader some idea of the crazy money-go-round of our railway 'system'. The fact that government subsidies have soared since privatisation gives the lie to the theory that privatisation produces cost savings. Railtrack has held out the begging bowl for more than £5 billion since Labour was elected. They want further handouts of £2 billion up front because of their financial difficulties since Hatfield. Their total share valuation at present is around £3 billion. It's time to switch off their life support machine. This week Railtrack has announced: a) that it has made a loss of £300 million and b) that it proposes to pay out a dividend to shareholders of £100 million - our money, every penny of it. On present projections Railtrack will have debts of $8 billion by 2003 and £14.5 billion by 2006.

John Prescott says we can't renationalise the railways because of the compensation the government would have to pay. Readers may think the compensation is for the victims and bereaved of the successive crashes. But actually John is talking about compensating their killers! The 77% of the population who want trains back in public ownership don't want yet more of our money thrown at these greedy incompetents. They want to see the people responsible in prison for corporate manslaughter. As the reader will already have worked out, we never will know who was responsible, for in a sense nobody was responsible.

Instead the government proposes to 'inject' £26 billion more of our money into the system over the next ten years. They hope that sum will be matched by £34 billion from the private sector companies. Some hope! Railtrack have put new investment plans on hold since Hatfield. Renovation of the railways under private ownership is cloud cuckoo land. Rail ticket sales collapsed in the wake of the Hatfield disaster. The train operating companies' response is to open up a squabble with Railtrack for compensation. Railtrack's money is ultimately our money. The Post Office has had to cancel its contract for first class letter carriage because of the post-Hatfield shambles. Who can blame them? The rail service will wither away under continued private ownership. To save the railways we need to take them back into public ownership. That is what 77% of voters want. They are right!