The success of East Coast shows that another model can work. And that’s why it terrifies the government

The government has pressed ahead with privatisation of the East Coast Mainline precisely because of its success.

The government has pressed ahead with privatisation of the East Coast Mainline precisely because of its success

It should be obvious by now that privatisation has become an end in itself for this government. This was demonstrated last year by the rushed privatisation of Royal Mail, sold at a fraction of its worth despite bringing in a significant profit to the taxpayer as a state-owned company.

We are told that we live in straightened times where government money is hard to come by; and yet state-owned companies that are making not insignificant sums for the exchequer are hastily being taken off the books and handed to the private sector. In these supposedly non-ideological times ideology is regularly trumping pragmatism.

The latest example of ideologically-driven stupidity is the flogging off of the successful East Coast Mainline to a consortium made up of Virgin and Stagecoach. Despite the not-for-dividend operator returning some £800 million to the taxpayer in the last financial year, the government has been seeking to return East Coast to private hands as speedily as possible. Today they’ve finally done it.

The absurdity of selling off East Coast was summed up last year by former minister for transport Sadiq Khan, who pointed out that, without privatisation, the money made from line could be reinvested ‘for the benefit of passengers’ – as opposed to shareholders of course.

And at a time of poor train services and huge subsidies for private rail providers, since the East Coast Mainline was taken into government hands not only has it returned the service to profit but it has simultaneously delivered a high level of customer satisfaction, as these excellent graphs from Ripped-Off Britain demonstrate:

East Coast

East Coast1

East Coast 3

The scale of East Coast’s success is all the more impressive considering the service was previously abandoned by a failing private sector – first by GNER in 2007 and then by National Express in 2009. Just as the government cannot allow banks that are ‘too big to fail’ to sink without trace, so it could not permit the companies that run our trains to fail – the consequences would be just too severe. As should be obvious to even the most fanatical libertarian, the railways can’t be turned off for a week on the ideological basis of ‘letting the market run its course’.

Along with it’s other achievements, the success of the East Coast Mainline has also rubbished the idea popularised by big business that success requires eye-watering rewards. According to their annual report, East Coast’s CEO earned £224.8k in 2013. If this sounds a lot, consider that the average pay of a FTSE 250 CEO stands at £1.3 million – and that’s before bonuses kick in.

This helps to explain why wrestling the railways out of private hands is a vote winner. According to recent opinion polls, over half the British public support full nationalisation of the railways. Even Conservative supporters want to bring the railways back into public ownership, with a majority saying that they would prefer nationalisation to the status quo.

Yet despite all of this the government has decided to press ahead with the sell-off of the line. Although I suspect it’s more revealing to interpret this in another way: the government is pressing ahead with privatisation precisely because of the success of the East Coast Mainline.

Is there anything, after all, that’s more damaging to the Conservative privatisation agenda than an example of a people before profit service that actually works?

James Bloodworth is the editor of Left Foot Forward. Follow him on Twitter

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39 Responses to “The success of East Coast shows that another model can work. And that’s why it terrifies the government”

  1. swat

    The irony of State owned French-German-Spanish company(s) running our trains absolutely appalls me. Next they’ll be insisting we all speak French German or Spanish before boarding their trains. No more curled up cheese sandwichs but caulslaw wursts and paela served on our trains.

  2. blarg1987

    I think we should watch this very carefully, get the names of the individuals and ministers who have said that the service would be better etc under private ownership.

    Following this, we should keep an eye on this and also executive appointments / minister / civil servant departures.

    If they end up on the board and we do and FOi that proves East Coast is not better in private hands, then there would be a very strong case to take legal action against the DfT or those individuals for corruption and fraud.

    Is LFF / anyone planning on setting up a fighting fund so we can proceed to that stage otherwise this will carry on. Until people are going to be prosecuted or actually locked up for shafting the tax payer, nothing will change. this will require an organisation to be set up to take the fight where it is not taken at the moment.

  3. robertcp

    A fanatical belief in privatisation has been a feature of British politics for at least twenty years. Brown’s reluctance to nationalise Northern Rock in 2007 was pathetic.

  4. Leon Wolfeson

    …You’d sue the minister, right?

    Which is problematical, legally, to put it mildly.

  5. Nick London

    You an expert in that too gooby? Your talents know no limits….

Comments are closed.