4 days ago
We don't need to nationalise our railways to fix them
One of the new Labour Government's first acts was to hand a big wedge of taxpayer cash to already well-paid train drivers, along with a promise of more as rolling rail renationalisation steadily tightens its grip over the next few years. But it hasn't worked. Train strikes have carried on regardless, and now The Telegraph reports there are calls for even more taxpayer subsidies too. It's a grim comment on how bad our railways have become that going back to the 1970s now seems like a good idea.
It doesn't have to be this way. There's a proven alternative that passengers are already using, and which they prefer to the big and increasingly state-run monopoly services which let them down so often. Open Access operators like Lumo, Grand Central and Hull Trains are hugely popular and successful because they're cheaper, more reliable and have happier staff with fewer strikes than their government-mandated rivals. The same is true for rail freight too, which has thrived and prospered under an entirely Open Access regime for years.
Rather than renationalising, we should boost Open Access services by allowing them to take on more and more of the timetable, and to add new services as well. The state monopolies would be left running a steadily-shrinking rump of services which Open Access providers hadn't yet replaced with something passengers liked better. Even loss-making services could be covered if Open Access firms bid to run them for a lower subsidy than before.
This new approach would transform Britain's railways. Rival rail firms would compete for passengers on each route, offering a variety of different prices, quality and styles of service. This would be driven by the knowledge their customers could switch to a rival's service at any time if it was better.
The new world would be more resilient too, because when things went wrong with one provider's services other firms would keep operating. And it would be more future-proof with fewer quangos and less red tape as well, because firms could launch new services quickly, at their own risk, without having to wait and see if officials or politicians would approve.
Most fundamentally, it would turn Network Rail from a loss-making, subsidy-hungry public bureaucracy into an efficient, commercially-successful and valuable business, because they'd earn their living from rail firms paying a fair price to use the tracks.
Suddenly, Network Rail staff would have strong incentives to boost revenues by using safer new technologies to run more services than today, and to cut bloated costs so they could maintain, improve and expand the network far more efficiently in the future as well.
Last but certainly not least: the Chancellor of the Exchequer would like it too. Rail subsidies have mushroomed since the pandemic, creating major headaches for a Labour Government that's facing mounting tax and spending pressures almost everywhere they look, with a particularly vicious public spending settlement due in the next few weeks.
But switching to Open Access would cut subsidies for the first time in years, creating much-needed headroom in the Treasury's figures.
In spite of all this, Labour won't do it. Partly because they're ideologically wedded to renationalisation anyway, but partly because the last Conservative Government allowed nationalisation to become politically entrenched as the only alternative to the timetable meltdowns and strikes that destroyed the old rail franchises.
That was a huge mistake, particularly when Open Access was – and still is – a proven, popular alternative that's standing at the platform and ready to depart. It's an argument which we made repeatedly in the dog days of the last Conservative Government, but failed to prod our successors into action.
If we'd successfully established Open Access as the practical, growing alternative to renationalisation, Labour's prejudices might have had closer scrutiny. We would no longer have been offering electors a ghastly choice between dreadful 1970s British Rail or failed noughties franchising.
Instead the question would have been: 'do you want our railways to move forward or back?' For anyone who's travelled on an Open Access train, or is just plain fed up with having no alternative when their local service lets them down, the answer is easy. Let's hope we will be brave enough to ask it clearly whenever the next election comes around.
