The success of East Coast shows that another model can work on our railways

Parliament will today debate a government proposal to re-privatise the East Coast mainline. Despite the fact that the current not-for-dividend operator will have returned £800 million to the taxpayer by the end of this financial year, the government is keen to return East Coast rail services to private hands as speedily as possible.

Parliament will today debate a government proposal to re-privatise the East Coast mainline.

Despite the fact that the current not-for-dividend operator will have returned £800 million to the taxpayer by the end of this financial year, the government is keen to return East Coast rail services to private hands as speedily as possible.

Former transport secretary Lord Adonis, who set up East Coast in 2009, has come out strongly against the move, saying that East Coast had “established itself as one of the best train operating companies in the country, both operationally and commercially”.

“This has fundamentally changed the situation, and it is right and proper that East Coast should be allowed to continue as a public sector comparator to the existing private franchises,” Lord Adonis said ahead of today’s Commons debate.

The irrationality of putting East Coast back into private hands is summed up succinctly by former minister for transport Sadiq Khan, who has pointed out that, without privatisation, the £800 million profit could be reinvested by East Coast “for the benefit of passengers”.

Since 2009, journey times have also been cut and the company carries a million more passengers than it did three years ago.

Labour’s welcome opposition to the plan is striking because it is refreshingly distinct from the adherence by many of our politicians to rail privatisation. It shows a willingness to look at the rail network with an open mind, if nothing else.

And looking at the evidence rather than simply adopting an ideological stance, there is a strong case for reconsidering the model of railway ownership that prevails in Britain.

Today in Britain some of the highest train fares in Europe co-exist alongside some extremely low rates of electrification and embarrassingly shoddy services. Despite ten years of above-inflation rail price increases, which have left some in the south-east spending 15 per cent of their salary on rail travel, the cost of supporting the rail network is much greater today than it was before the dissolution of British Rail.

In 2010/11, Network Rail was subsidised by the taxpayer to the tune of £3.96 billion. This compares with an average of £1.4billion over the 10 years leading up to privatisation. In light of the recent six per cent increase in fares, 10 per cent of commuters said that they would no longer be able to afford to travel by train when the new prices kicked in.

Looking again at whether we are best served by privately owned railways could also be a vote winner. If recent opinion polls are anything to go by, over half the British public would support full nationalisation of the railways. Even Conservative supporters appear to agree, with a majority saying they would prefer nationalisation to the status quo.

The rail network epitomises the idea of private gain and public loss that only a few years ago left taxpayers picking up the bill after the banks crashed. Just as the government could not let banks that were ‘too big to fail’ go under, so it cannot permit the companies that run our trains to fail because the consequences would be too severe.

For obvious reasons, the rail network cannot be turned off for a few days based on the notion of ‘letting the market run its course’; and so the train companies resemble something like a gambler placing bets with somebody else’s money.

Private profit and socialised losses, in other words.

2 Responses to “The success of East Coast shows that another model can work on our railways”

  1. Kevin Leonard

    Although many politicians will say re-nationalising the Railways should not be a priority I personally believe this could be a major turning point for the Labour party. Should they continue to fight for re-nationalisation they will find a great number of former supporters thinking again about how to cast their votes come 2015.

  2. simon Dent

    For labour renationalising the uk’s railways should be one of its priorities.As east coast has shown state run railways are an asset,Delivering huge benefits for passengers and taxpayers alike.Gone would be huge profits for private companies and subsidies they also receive and in would come further investment for new trains,Stations and more staff to assist passengers.I fully back renationalisation of one of our greatest assets.Labour shadow cabinet please liste,look at what the proposals and benefits are and commit to returning the railways to being state run.

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