The Case for Railway Renationalisation: What are we waiting for?

We are often told by staunch advocates of privatisation that it unleashes the dynamism, efficiency, and low-cost value which nationalised products can rarely match. Sometimes, this is true. But in the case of Britain’s railways, it most certainly is not.

Putting aside the damning testimonies of numerous everyday passengers, famous or otherwise, the overall state of privatised rail is nothing less than a disgrace. Let’s start with ticket prices. After the astonishing increases last January, British commuters now spend around six times more of their salaries on rail fares than their European counterparts. If you’re commuting to London on an average wage, you’ll pay 11% more of your salary than Italians commuting the same distance to Rome. If you’re on the £357.90 monthly season ticket from, for example, Chelmsford to London, you’d be better off moving elsewhere: the equivalent distance would cost £37 in Rome, £56 in Barcelona, £95 in Berlin, and £234 in Paris. Needless to say, all these rail networks are over 80% publically owned, and consistently outperform our fractured, rip-off system.

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British Rail was broken up in 1996. Photograph: Chitrapa via Wikimedia Commons

Perhaps British commuters could stomach these fares if the quality of service was suitably better. Again, it isn’t. On the morning train services into London, 1 in 3 passengers have to stand due to overcrowding; a problem that is getting increasingly worse on British trains in general. The government-commissioned McNulty report highlighted a 40% ‘efficiency gap’ between the rail system here in the UK and those in mainland Europe; findings backed by independent reports in both 2010 and 2012.

So with a low-quality service, but high-cost tickets, where does all that money go?

It may surprise some to hear that Britain’s privatised rail is excessively bureaucratic. Our fractured and atomised rail system, with its complex web of contractors and sub-contractors, is administered by around 23 different train operators, whereas Germany, for example, has just one publically-owned operator. In addition, a recent report found that approximately 90% of profits accumulated by private rail companies were paid as dividends to their shareholders, rather than reinvested in the creaking railway infrastructure.

Once again, the taxpayer has to pick up the loose ends while companies enjoy the profit; with public subsidies billions more now than in the days of the publically-operated system under British Rail. After inflation, public spending on the railways was six times higher in 2013 than pre-privatisation in 1996.

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Overcrowding has become a significant problem, particularly in London and Manchester. Photograph: David Iliff, License: CC-BY-SA 3.0

And if the more efficient, better quality, publically-owned services in Europe aren’t enough to convince you of its merits; just take a look at the brief period in which the East Coast franchise was brought under public ownership from 2009 to 2015. It required less public subsidies than any other rail franchise, returned profits of £1 billion back into the public purse, and had the highest satisfaction rate of any long-distance rail franchise.

It is therefore not the least surprising that public opinion overwhelmingly supports railway renationalisation. A 2014 YouGov poll found a majority of UKIP, Labour, and Liberal Democrat voters support the idea, while Conservative voters are actually split down the middle.

In truth, we have trialled privatisation in our railways, and it has failed on most counts. The system simply does not produce an efficient, cost-effective, and quality service, and it must now face up to reality. The railways are a shining success story of public ownership, and the time for renationalisation has now come.


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