Time to replace the failed model of rail privatisation with an integrated, publicly accountable structure

by Jordan Hall

The unexpected jump in the RPI rate of inflation will be grim news for rail passengers. UK commuters who already pay the highest fares in Europe, face further increases of at least 6% from next January.

The coalition has insisted that above inflation fare rises will end when the costs of the rail industry are brought down. However this argument doesn’t stand up when Network Rail has already slashed running costs over a 5 year period.

Rail reform could be the key to winning over swing voters in the marginal commuter constituencies that Labour will need to win to form a majority in 2015.

Back in June shadow transport secretary, Maria Eagle, welcomed the Rebuilding Rail report by Transport for Quality of Life as a consideration in the policy review.

The report presented the case for reintegrating the operations and infrastructure arms, phasing out franchising and giving passengers, the workforce and elected local and regional authorities a greater say in the industry.

The current system guarantees private rail operators taxpayer funds if their profits fall below a fixed level. It is estimated that £1.2bn of public money has been lost each year as a direct result of the fragmented system. This money could have reduced current fares by as much as 18%.

Taxpayers already subsidise the rail industry to the tune of £4bn a year – an industry characterised by mini-monopolies charging UK passengers high fares and siphoning off the profits to continental parent companies.

Scrapping the current model and adopting a system along the lines of the Rebuilding Rail report would secure value for money for the taxpayer and put an end to above inflation fare rises. Such a policy would be a welcome reprieve for squeezed commuters hit by higher and higher rail fares.

Ed has consistently put fairness at the heart of his leadership. On energy markets and challenging the rip-off culture, he has set the agenda whilst coalition policies such as the VAT rise compound the pressures on working families. A programme of rail reform that delivered savings for the taxpayer and lower fares for squeezed commuters could be a vote winner.

Jordan Hall is a Labour activist

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5 Responses to “Time to replace the failed model of rail privatisation with an integrated, publicly accountable structure”

  1. david patterson says:

    The Labour party should get back to its roots and call for all industry to be government run. The removal of clause 4 was the end of the real Labour party

  2. SW2 says:

    I enjoyed the Rebuilding Rail report thoroughly as it included a lot of sensible structural suggestions but in policy terms the Labour movement still has a lot of thinking to do on the railways to arrive at something you can present to a very sceptical electorate. Take the curent Virgin on the ridiculous West Coast story.

    Over the last 15 years since British Rail was minced by John Motorway Cones Hotline Major, the winning franchise bidder has indeed subsequently failed to last the course on a couple of occasions.

    In percentage terms however those failures are simply not statistically significant and do not provide proper evidence that Branson or anyone else can use to claim that the actual franchise bid selection process is flawed.

    Whether franchising itself is flawed is the much more important and significant question and for its part the coalition government actually believe in privatised railways and in the franchise process, therefore it should stand its ground and appoint the winning bidder to the Wets Coast franchise.

    At the moment it is not really clear what Labour party policy is on railways. We have had a re-nationalisation hint ( hurrah!!) but also hints that HS2 may be a bad idea
    ( boo hiss!!) despite the last Labour Secretary of State moving mountains to get it into forward gear just five minutes ago. Since policy development in general has recently been overhauled it may be fair to wait and see before we sulk.

    On the specific Branson/West Coast issue Labour is presently just aping the Branson press and publicity monster by calling the West Coast franchise award flawed without pointing a finger at the system that requires it, and that is frankly, a bit of cheap, nasty and superficial headline politics and is this solely to be seen on the side of Bran Il Soon the would be Dear Leader of British capitalism?. God I hope not!

    The journey times on the West Coast have indeed improved a great deal since late 2008. However it was Network Rail, the not for profit owner of the rails and sleepers, signals and electrification masts, bridges and tunnels, etc, who did the job by spending loads of public money to achieve that end. Bran Il Soon was simply the monopoly operator (at least from Liverpool, and from Manchester to London) who simply picked up the benefit, like a lost fiver on the floor. The return of passengers is an overall consequence of those quicker journeys and the fact that West Coast is invariably now open at weekends and therefore now a seven day railway again after many years.

    We know that Richard ( I am going to scream until I’m sick! and I can you know!) Branson, hasn’t stopped spouting, about West Coast even before he found out he had lost it. What about the First Group plans for West Coast however. At least something worth having for passengers is the First proposal to reduce Anytime singles and returns by 15%, but there is more, read for yourselves.


    The longer term improvement of the railway may lie in a different direction. Independent railway industry expert opinion often shows that a modern state railway network with public and private partners offer much better value for money than our present British muddle.

    If Britain really does want a railway that charges lower fares and carries more people it is inescapable that this means more money going in from general taxation (that’s from you by the way). Maybe if we stopped pretending to be a world-wide military power (Austria and Germany have both managed it, albeit for different reasons, and in different times) we might then be able to spend more in Britain and around the world on better things and to all our advantage. But that means a really big piece of policy work for political parties and a proverbially grand seismic shift in the Daily Mail mindset lurking out their in their marginal constituency supermarket car parks at the wheel of motors.

  3. john reid says:

    and after clause 4 labour got more than 40% of the vote twice, for the first time since 1966

  4. Vern says:

    To the untrained eye, the rail service in the UK is efficient, yet expensive. I think you should worry about matters which are more important to the electorate.
    Suggesting it might be better run with increased interference from government is a non-starter.

  5. Rob the cripple says:

    Railways are terrible, run poorly profits are high prices out of my pocket anyway.

    Yes to the the public sector taking over, but not as it was during the 1970’s right now if the Public sector owned it I could see massive cuts, not massive spending.

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