West Coast Main Line row: Should railways be renationalised?

 
A Virgin train passes along the West Coast Main Line route near Abington on 29 August Should Britain's railways be returned to public ownership?

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The collapse of the West Coast Main Line bidding process, after the government found significant flaws, has once again sparked calls in some quarters to renationalise Britain's railways - 17 years after they were privatised.

FirstGroup had been due to take over the running of the line from current operator Virgin Trains in December, but now the competition will have to be re-run after the government scrapped its decision on the franchise.

Here two transport experts argue the case for and against.

AGAINST: Dr Richard Wellings, head of transport, Institute of Economic Affairs

In many ways the railways have been successful over the last 15 years, with significant growth in passenger numbers and freight. Several routes have been upgraded, ageing trains have been replaced and safety has continued to improve.

Dr Richard Wellings, head of transport, Institute of Economic Affairs Dr Richard Wellings says changes are needed but a private rail industry is still the way forward

Taxpayer subsidies have, however, reached unacceptable levels, at around £5bn a year. And costs are much higher than on comparable networks abroad.

In reality, the railways were not privatised properly. Politicians and officials retained tight control. As the current West Coast debacle shows, the government decides who runs the trains. It also decides levels of service, controls prices and determines the priorities for investment.

This is not genuine privatisation. Rail firms are essentially subcontractors for the state. And the high costs of the railways flow directly from these high levels of government involvement.

In particular, the government has imposed a complex artificial structure on the industry. The railways are suffocated by unnecessary bureaucracy. Highly paid lawyers, accountants, consultants and civil servants have benefited at the expense of taxpayers and passengers.

A further shift toward nationalisation would only make this worse. Nationalised industries are hugely inefficient and quickly become a drain on the economy, as we know from bitter experience in the 1960s and 1970s. Politicians would exert even more control over the railways, squandering money to buy off special interests and wasting yet more billions on uneconomic vanity projects.

In the 19th Century private firms built and operated a vast network without massive handouts from taxpayers. A similarly innovative and entrepreneurial private rail industry is the best way to improve outcomes and reduce costs. In particular, the same firms should be free to own the tracks and run the trains, as happened in the past. This is the best way of removing the political interference that is holding the industry back.

FOR: Bob Crow, general secretary, RMT

The sheer scale of the chaos over the botched award of the West Coast Main Line franchise played out in the media must have shocked even those who thought that the insanity of rail privatisation could not plumb any further depths.

RMT leader Bob Crow Bob Crow says now is the time for renationalisation

Some 3,200 workers on the [West Coast] line, and hundreds more on associated fleet and service contracts, have been left hanging by a thread. Many of them live and work in areas with a rich and proud tradition as a cornerstone of the British railway industry. The reputation of Britain as the nation that gave the railways to the world has been dragged through the mud by this unmitigated and costly shambles.

Leave aside for a moment the corporate Punch and Judy show between First Group and Virgin and the Whitehall farce that even a scriptwriter on Yes Minister would have ditched as too ridiculous. This fiasco shines the spotlight on the greed and self-serving that has robbed billions in profits and dividends from our railways since privatisation two decades ago.

Now, at last, the vast majority of people are waking up to that cold, hard fact. Recent polls show 70% now support the RMT call for full renationalisation. Online polls show that figure at closer to 90%. The entire political class, including the Labour Party, need to be dragged out of their stupor on this central issue.

With fares set to rise by up to 11% in January to boost private profits, thousands of jobs at risk from the McNulty rail review cuts and ticket offices and stations being smashed up by the politicians and their business allies, the time for renationalisation is here right now.

With the East Coast run efficiently and safely in public hands, and contributing hundreds of millions back to the Treasury and investing in services rather than private profits, the West Coast should be next with the rest to follow under one, single, publicly owned and integrated umbrella.

Bring back British Rail? As an alternative to the greed and chaos on our railways laid bare over the past week? You bet.

 

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  • rate this
    -2

    Comment number 64.

    57 MXI -- If the private sector can deliver the public services cheaper & /or better & make a profit what is your problem.

  • rate this
    +1

    Comment number 63.

    Whether we opt for privatisation or nationalisation there needs to be a strict ministerial code to avoid corruption like this again. It needs to be written into law that the unfair awarding of contracts is a criminal offence and will result in jail time. BTW - the problems with the railway auction process is a sideshow compared to the problems in the defence department under Labour!

  • rate this
    +5

    Comment number 62.

    I refuse to listen to anything on the railways from a 'Dr Richard', as another one is responsible for the start of their decline in the 1960s!
    If state-run industries are 'hugely inefficient' and a 'drain on the economy', then why are all the world's best railways state-owned (save for Japan)? Privatisation of essential services is the worst of all the Thatcherite deceptions.
    .

  • rate this
    +3

    Comment number 61.

    The government does not want to promote public transport as it loses fuel tax that way, that's why we have a poor rail service, a poor bus service and roads that are only bearable by car. Even less enthusiasm will be shown now following yesterdays news of petrol sales declining

  • rate this
    -1

    Comment number 60.

    Why put an incredibly complex industry into the hands of know-nothing politicians and bureaucrats whose only incentive is "How do I get elected another 4 years?" and "How do I get a fatter wage and pension?"

    You'd have to be mad, or a statist (very similar), to think that government knows better how to run entire industries than those who work in and are specialised in running those industries.

  • rate this
    +2

    Comment number 59.

    I remember well British Rail. It was poor. Unreliable, old rolling stock, prone to strike action and the BR sandwiches were an international joke.

    Today, rail travel is expensive. But reliable (yes it is), shiny new trains and not a bad experience.

    End of the day, no government would invest in railways. The taxpayer would not accept paying extra.

  • rate this
    -4

    Comment number 58.

    Rather than renationalise, rail operators should take over the tracks where they are sole ( > 90%) operator.

    Network Rail is inefficient, East Coast cost more now, and delivers less, then when franchised.

  • rate this
    +10

    Comment number 57.

    Public services should not make profit, profit is for manufacturing and services that are not public. To make profit from a basic public service like water utility and transport services is immoral. But dont give them to the unions. You cant concentrate on providing a service while watching, pandering or being a puppet to your share holders or CEO's. I am not a socialist I am a realist.

  • rate this
    +2

    Comment number 56.

    Yes yes a million times yes!

  • rate this
    +7

    Comment number 55.

    Having retired after working for 50 years (in the private sector) the key question is not 'nationalise or not' but 'how do we get the right people into key leadership and management positions' - that includes the private and public sectors, government and the unions. That's where we are failing and failing this country. For example - Take our current choices for PM- Cameron or Milliband.

  • rate this
    +1

    Comment number 54.

    If any one really thinks that complete privatisation would bring the tax payer or traveller benifits they are deluded its all about the gravy train paid for increasingly by the public. 30% cheaper in europe more subsidy than when in public hands rail track went bust when they could sell no more land off the proceeds which should have gone in the public purse.

  • rate this
    +2

    Comment number 53.

    all i care about with the trains is getting value for money,regardless of who owns what.

    why do we offer revenue support?why is the tax payer liable for lining the pockets of managers and shareholders?
    My understanding of business is that if you don't make any money then tough.My firm doesn't ask for help if we have a bad year so why do train companies?

  • rate this
    -1

    Comment number 52.

    NO, NO, and again NO - I remember when we had British Railways running things - train journeys were expensive, too expensive for the likes of me - inefficient and dirty - and that was when they weren't on strike over one thing or another. The unions are behind this call, trying to turn the clock back to the good old days.

  • rate this
    -2

    Comment number 51.

    40Million pounds already down the train line..We all know no one will bid apart from Bermuda Branson...because if he fails he sues all the time..so why not just give it to him...so I can see the waste of money on the west coast line..No improvement here in Wales just extra costs..expensive tickets and slow trains.

  • rate this
    +2

    Comment number 50.

    Absolutely as should be Royal Mail.

  • rate this
    +1

    Comment number 49.

    No ALL nationalised industries are hampered by government ministers interfering for party political reasons rather than economic / efficiency reasons. Franchising doesn't solve rail's problems but it limits political meddling once the franchise is let.
    In principle I'd prefer a nationalised (ie non profit making) system with good management free of political interference but that is unlikely.

  • rate this
    0

    Comment number 48.

    Maybe some people don't remember the railways before privatisation. I do and they were simply awful. Uncomfortable, outdated rolling stock and unreliable. I don't care a bean if it is private or publicly owned, I would just like to have clean, comfortable and reliable trains as they have in France and Germany. Ours aren't up to that standard, but they are an awful lot better than they were.

  • rate this
    -8

    Comment number 47.

    Bob Crowe is right as usual but doesn't go far enough. Not only should the railways be nationalised but also coach companies, airlines, private cars, scooters and bicycles by the same reasoning. The state (and Mr Crowe) can obviously run them all much better and there will be none of that nasty profit.

  • rate this
    -1

    Comment number 46.

    I have travelled (on time) on Italian, German and French railways. This gov ernment (any government, actually) is incapable of actually running anything. I am against foreign ownership for essential services but when the service is apalling, I have to say, give it to the Italians, Germans, French, ANYBODY!

  • rate this
    +1

    Comment number 45.

    I have to wonder if Bob Crowe is willing for his members terms and conditions to return to parity with what they were in the "good old" BR days. Part of the problems and reason why costs are so high is that salaries are so much higher relatively today than they ever were in BR days so if the costs are to be brought under control a reduction of salaries in real terms of over 20% is needed.

 

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