How did we get to this sorry situation? The misery began with the misguided privatisation by John Major’s Conservative Government in 1996. Supporters said greater competition would lead to better services and a more efficient, cheaper railway but the opposite has happened.Our privatised railway companies have received up to five times more in taxpayers’ subsidy than the state-owned British Rail did. A TUC-commissioned report in 2013 revealed that the five largest private train companies received nearly £3billion in taxpayer support between 2007 and 2011. Since privatisation, fares have risen regularly above inflation, with more than 90 per cent of the train companies’ profits being paid out to shareholders.
While fare caps are welcome, renationalising the railways, which opinion polls show is supported by a clear majority, is the only long-term solution, as it would make our railways cheaper to operate.
We don’t need to look far to see the benefits that a publicly owned railway can bring. The East Coast Main Line has been run by Directly Operated Railways, a holding company owned by the Department for Transport, since private operator National Express East Coast gave up the franchise in 2009.
The line has been a great success in public ownership, with figures from the Office of Rail Regulation showing it is Britain’s most efficient franchise, requiring less subsidy than any private operator.
During 2009-12 it paid back more money to the taxpayer in real terms than any previous franchisee: last year it returned more than £208million to the Exchequer. Revealingly, while other private operators raised their fares last week, the East Coast line has frozen more than half of them. Last year, customer satisfaction reached a record high of 92 per cent.
Another part of the network where fares are being frozen is Northern Ireland, where railways remain in public ownership. Yet despite this very clear evidence of how publicly owned railways can save money for taxpayers and passengers, the Government seems wedded to the expensive and inefficient privatisation model, which adds £1.2billion to running costs every year. Incredibly, it plans to privatise the East Coast mainline later this year.
Our political elite seems opposed to the idea of British state ownership of our railways but does not seem to have any concerns about state-owned firms from other European countries owning large chunks.
Arriva, which runs many services in Britain, including CrossCountry, is owned by the German state railway company Deutsche Bahn, which also owns our largest rail freight company.
Abellio, which operates services across Britain, is owned by Nederlandse Spoorwegen, the Dutch state railway.
Among the bidders for the East Coast franchise are Eurostar and Keolis, both majority owned by the French state railway company SNCF. Overall 65 per cent of our operators are now owned by European state-owned firms.
Why is it deemed acceptable for state-owned companies from Germany, France and the Netherlands to operate services on our network, and receive generous subsidies from the British taxpayer, but not a British state-owned company?
Do we honestly think other European countries would allow a British state-owned railway firm to own and operate large parts of their networks and that the governments of those countries would subsidise it? We must be mad to allow British taxpayers to effectively subsidise rail users in other European countries but that is what is happening.
Rail privatisation is a good example of politicians putting dogma before common sense. There are no advantages, either for passengers or for taxpayers, in sticking with the current flawed model. The first of our three major parties which changes tack and makes a firm commitment to renationalise our railways would not only be doing the right thing, it would reap the electoral benefit from a public fed up with being ripped off when they go to buy a railway ticket.
It has been calculated that the savings made from bringing the railways back into public ownership would enable an 18 per cent cut in fares. Now wouldn’t that be a much better New Year present for long-suffering rail commuters than yet another round of fare increases?” (http://www.express.co.uk/comment/expresscomment/452104/Rail-against-privatisation)