Tuesday, 19 August 2014

Labour Must Make a Commitment to Taking National Rail Back into Public Ownership

Back in 1993 John Major's Tory government committed one of the most flagrant acts of mugging ever. They smashed our rail system into almost one hundred parts and sold them off to franchisee’s, many of whom became millionaires; and to their friends in the business world, who again became very rich almost immediately after the sales.

The myth perpetrated, one that Thatcher popularised, was the old chestnut that insisted that all our industries, utilities and services would be better managed, cheaper to run and more profitable in the hands of the private sector.

Chart 1: rail subsidy (2011/12 prices)

Yet 21 years on from the second great train robbery we can see from the chart above that far from being cheaper to run the public subsidy going to this privately run service is greater today than it has ever been. So I suppose the system is more profitable in that shareholders and the people at the top of the rail companies are raking in fortunes from a repeatedly mugged public.

One could be forgiven for thinking: OK the subsidy is very high, but aren’t passengers getting value for their money with cheaper fares. The answer is: no we aren’t!

This chart shows the year by year upward rise in rail fares in the UK

Fares are set to rise by 3.5% in January 2015, that’s 2.5% RPI and the 1% rail franchisees are permitted to levy. That’s a staggering 24.7% rise since the ConDems came to power in 2010. Many of these rises are hitting working people who have not seen a pay rise for several years; so unless they get a decent pay rise this or next year the rise in their season tickets will in effect act as a further pay cut.

Back in 1993 it was argued that British Rail was a moribund service whose only hope of rejuvenation was selling it off to the private sector. Of course British Rail was a failing system. Decades of disinvestment into infrastructure and rolling stock had set BR up to fail. Add to this the right wing press and political spin that vilified and mocked everything about the system. Then you are presented with a fruit ready to be plucked from a very low branch – the way the NHS is being fitted-up is parallel to just how easy it is to off load a service if its deemed to be failing.

Labour must as a matter of urgency take the national railways back into the public sector and give rail travellers back a service that they can afford to use; and give tax payers a holiday from coughing up exorbitant subsidies that go into the coffers of private companies and into the back pockets of a few profiteers at the top. 

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