I tried to stop a rail privatisation

Jonathon Bray, the co-ordinator of the pressure group Save Our Railways, at a London news conference where he announced a legal challenge in a bid to overturn cuts to train services under privatisation.

Since the Williams-Shapps rail plan was published it seems like everybody has been telling their story of rail privatisation. So I’m going to tell mine. I was the Coordinator of the Save our Railways campaign that, in the nineties, tried to stop privatisation. We came close too. Though, as it has turned out, it was rail privatisation’s own inherent contradictions and fault lines that led to its downfall. A downfall that came through a long (and perhaps as yet incomplete) unwinding triggered by a series of nervous breakdowns.

But let’s start with the origin of rail privatisation. Having worked their way through the foothills of other state sell-offs, rail was a true test of the prowess of the masters of the financial universe as well as a way of sorting the true privatisation believers from the milquetoasts. Indeed, it was an act of high and supreme neo-liberalism to turn a boring old integrated rail network into an exciting bazaar where government, passengers, and rail managers could shop around for just what they needed.

The fact that you were making a market of something that was largely a public service and required large amounts of public subsidy to support only added to the stimulation of the challenge. And if more public funding was needed to lubricate the process of meeting that challenge then so be it. For example, in order to create artificially profitable intercity services you had to load lots of the costs they used to bear onto regional rail services – thus increasing the cost to the public sector of regional services.

So far so baroque. But they also took two natural monopolies within the railway – the infrastructure and the existing rolling stock and privatised them as well. Selling-off the infrastructure wasn’t part of the original plan. But hell, why not? Plus, it would make it harder to put it all back together again.

The selling-off of the existing rolling stock was only a disaster in terms of pointlessly handing over Securicor vans full of public money for no benefit whatsoever as the rolling stock monopolies rented out sometimes knackered trains (that they had bought at a giveaway price) for eye watering amounts of money.

Selling off Railtrack was to prove to be a disaster full stop. As a PLC, Railtrack had a sort of duty to invest in preventative maintenance and responsible stewardship of complicated and often ageing safety critical assets. It also had an absolute legal duty to maximise dividends for shareholders. Guess which was given priority?

Meanwhile as the railway fragmented, and then fragmented again, a huge bureaucracy was necessary to service the various interfaces. And so, the contradictions and fault lines embedded themselves. You could paper over the cracks with cash for only so long. 

Could it all have been stopped before it even started? In December 1995, when we were standing on the steps of the Royal Courts of Justice in the Strand, surrounded by camera crews and journalists, having just beaten the government in the Court of Appeal – it looked like it could be.

As Coordinator of Save our Railways, this was the high point. An alliance of the rail unions, local government and rail users, we had been running a take no prisoners campaign modelled on Alistair Campbell’s ‘attack, rebuttal, policy’ mantra. In those days there was no social media (or email!) so warfare was conducted via the press. We worked with transport correspondents and gave them what they wanted – good stories and uncompromising quotes.

Between us and them we gave the privatisation process a right battering. Shuttling from TV studio to the fax machine (that’s how you put out press releases in those days) we were one of the most high-profile campaigns of the day – in particular in London and the South East.

All of this prepared the way for the legal challenges which paid off with the Court of Appeal judgement. We knew that the courts wouldn’t block the use of primary legislation but the court actions were designed to give nervous Tory backbenchers the excuse to deliver the coup de grace. However, a series of unfortunate events for the railways meant that never happened.

The natural leader of a revolt, the rail enthusiast and committed privatisation opponent, Robert Adley MP had died in 1993 of a heart attack. Those Tory backbenchers most concerned about whether privatisation was going too far had already rebelled to halt the privatisation of the post office and were reluctant to inflict any further damage to their own party with the opinion polls looking ominous. If the sequencing of the two privatisations had been different then it may have been the other way round – with the railways remaining in public ownership rather than the post office. Meanwhile the Ulster unionists were squared and, although commuters like a good grumble, they don’t like using up their time away from working and commuting to get involved in organised rebellion about commuting.

One further and major factor was that the furore around rail privatisation had also led to a whole series of concessions being made around minimum service levels and fares protection. This simultaneously reduced the perceived risk of privatisation for Tory backbenchers whilst at the same time somewhat undermining the point of doing it in the first place (as it trampled all over the idea that the railways would be a free market). This helped get rail privatisation over the line but also became another crack in its foundations.

Whilst all this was going on, New Labour stood shoulder to shoulder with the campaign in public whilst staying their hand at key moments as the 1997 election drew close. After the election they continued to huff and puff whilst doing the bare minimum – which was eventually bringing the Strategic Rail Authority into being in 2001. Though since it was led by neo liberal true believers, nothing much of any consequence resulted. An exception being the occasional maverick tendencies of its first chair, Sir Alastair Morton, who started the process of devolving Merseyrail Electrics to the PTE with a long franchise. 

Railtrack went into financial meltdown in the aftermath of the Hatfield crash in October 2000 (and the subsequent nervous breakdown of the rail network) and as the costs of the West Coast Mainline upgrade ran out of control. And so (with great reluctance on the then Government’s part) the unwinding began with the creation of the halfway house of Network Rail. This put the engineers in charge of the infrastructure again. This is good in lots of ways – given we need a safe, reliable railway. Not so good if you want a railway that faces outwards to people and places rather than inwards to incomprehensible GRIP processes.

Meanwhile, the passenger railway was still in the domain of financial engineers. Gaming the system to take the money in the contractual good times and handing back the keys in the bad times. Remarkably, DfT fell for it every time. If a franchise bid looked too good to be true then… they signed on the dotted line. With few exceptions the franchisees left little trace and the public remained largely resentful, distrustful and apathetic about the whole project.

In particular, the privatised railway struggled to define itself in relation to that object of continual fascination, British Rail.  Why do preservationists paint everything that moves in British Railways livery whereas nobody celebrates the first privatised railway operators? Because BR’s replacements just feel too disposable and somehow illegitimate. They didn’t feel part of the lineage because they really weren’t adding very much. Bless them though, they have realised how they are perceived and, having tried every other form of branding, more of them are now seeking to take on the mantle through some kind of Dr Who style regeneration of the pre-nationalisation Big Four.

As important as the periodic nervous breakdowns of the system have been to its very slow-motion implosion, equally significant is the shape shifting of Johnson’s Conservatives. Like bus deregulation, rail privatisation, is no longer a totemic example of the benefits of free market competition which must be maintained and emulated as part of the wider neo-liberal project. Instead, transport is again a means to an end. The ends being what bus and rail can do for the wider economy, for levelling up, for keeping passengers happy. If bus deregulation and rail privatisation don’t do this then they can be unceremoniously thrown in a ditch. 

To this end, the Williams-Shapps review has brought the mother railway back in the form of GBR (sounds better when abbreviated). Though in some ways the mother railway never went away given the continuity of employees (including at the most senior level) and the way in which many of those employees were always trying to circumvent its internal market to just keep the trains running.

The unification of rail planning and rail infrastructure should lead to a less lopsided railway and a railway that is probably back in the same place that BR was. Trying to outwit and play the long game with DfT, the Treasury and Number Ten on behalf of the mother railway. Indeed, how GBR plays its hand – and to what end – will be more
important than a lot of the text of the Williams-Shapps review itself. The danger is that it turns inwards rather than outwards. But the opportunity is there to bring back the Great bits of British Railways, like a single intercity network that can give aviation a run for its money. Whilst at the same time working with the grain of the UK’s nations and regions to prove itself indispensable to their green growth agendas. One has to wonder though if this really is the last unwinding of rail privatisation. Or if the hassle, cost and risk of contracting out services, where operators have so little room for manoeuvre, will be the focus of a future review.

A shorter version of this post appeared in Passenger Transport and a pdf of the article can be downloaded
here
.

Jonathan Bray is Director at Urban Transport Group

What might the Williams-Shapps plan mean for urban public transport?

Here’s a first take:

  1. There are clear tensions between the urgent need to de-clutter and de-layer the railway landscape; the influence of the wider ‘save the union’ project; and the facts on the ground around existing devolution of urban and regional rail (and its clear benefits). One of those devo benefits being the pioneering of the format for contracting services which the DfT has chosen to adopt more widely.

    The plan promises to safeguard existing devolutionary projects (London Overground, Merseyrail Electrics etc) and talks about giving local areas more control. But at the same time the dominant theme is command and control from the centre.

    It will also be interesting to see the role that the new ‘regional railways’ function will play. Will this be an instrument for extending the benefits of rail devolution to more places and passengers or a ‘big railway’ takeover – but with the odd tea and biscuits sessions with local stakeholders thrown in? Or something in between?

    Expect a lot of wrangles too about train liveries and signage. Will the railway look like it is part of a wider project to put the ‘Great’ into Great Britain? Will it reflect the corporations that operate it? Or will it look like it is playing its part in more local public transport networks and identities?

  2. There’s an early focus on ticketing. In relation to this, city regions already have smart and multi-modal ticketing products which are being developed further. The problem is the price differential with the ticketing products of individual modes (and operators) and the need to accelerate what they can offer (including capping).

    The story of how, as a nation, we got to where we are on ticketing is a tortured tale of silo thinking, missed opportunities and false starts. The logic and the lesson is to build outwards from the places where multi-modal travel is most extensive and most needed – the city regions.

    Get those islands in place and then fill in the gaps. We don’t need to wander off down any more modal or operator cul-de-sacs or to throw ourselves again at grand ticketing projects at a scale which fail to deliver products and which users weren’t necessarily asking for in the first place.

  3. Now, more than ever, we need a railway that faces outwards to the people and places it serves. But there’s a danger that the railway turns inward on itself as the ‘big railway’ reasserts itself and everything else is restructured around it.

    At the same time, the railways are subject to the consequences of a ‘forever war’ between HMT wanting to slash costs and other parts of Government that understand that we need an expanding rail network to support a green and robust recovery from COVID-19.

  4. Good to see that the railways are being told to go up a gear on climate resilience and their own environmental policies.

    Railways powered by the turbines you can see out of the train window, the greening of the rail estate and greater resilience to the more extreme weather conditions that are already with us will give the railway something it can shout about as well as form part of the wider cross-sector thinking that will be essential if we are to have a hope of meeting ambitious carbon reduction targets (P.S. you can read about what Swiss and Netherlands railways have been doing to get their own house in order on the environment here).

  5. Delayed gratification? In a former life I led the Save our Railways campaign against rail privatisation – where, among other things, we argued that the structure proposed was way too fragmented and ultimately wouldn’t work.

    The original concept of rail privatisation – as a free market with a regulator to ensure fair competition – has been little more than a very expensive pretence for some time. The pre-COVID timetabling nervous breakdowns of the system, and the massive scale of Government support during COVID, has finished it off.

    What comes next should be better. But how rapid the transition will be, and how much better it will be, is still very much up for grabs.

Jonathan Bray is Director at Urban Transport Group

Fighting smart to get passengers back on public transport

In some ways, getting the funding to keep public transport going during the pandemic was the easy bit. During the pandemic it was important for Government to keep the public transport show on the road (and the companies that provide it) to prevent a wider sense of societal and economic breakdown. As a result, the wheels kept turning and nobody went out of business. No passengers, no problem. Government filled the funding gap.

But if – and it’s a big if – we are now moving beyond the pandemic’s ability to trigger another set of significant restrictions on movement – then the existential threat is no longer there. And then what happens to funding? June 21st is in Whitehall’s mind the point at which we transition from emergency funding to what comes next. And what comes next is very much up for grabs.

One thing for sure is that there will still be a funding gap to fill after June 21st. The best guess being that patronage will be significantly below what it was before the pandemic (which was shrinking anyway for bus). This is based on the assumption that there will be more people working from home and even greater antipathy to use of public transport from those that weren’t pre-disposed to it before.

Let’s look at the positives first for funding post June 21. For those who like their glass half full we now have a bus strategy – with a Prime Ministerial foreword – which wants more, better and cheaper buses. And it wants them everywhere. The pro-bus message was also part of the wider Conservative pitch to towns, like Hartlepool, which felt keenly that they had lost out as both the public and private sector shrank bank from post-industrial towns in recent decades. Backing that up is the largely unspent £3 billion transformational funding for bus – as well as other funding streams (like the intra-city fund) which buses could benefit from.

More widely, the consensus around backing public transport has never been stronger. You will struggle to find many politicians of any stripe who aren’t in favour. And now more politicians are evangelists for it too. Just as Johnson’s London experience, and ‘red wall’ ambitions have convinced him that buses are good politics for the Conservatives, for Labour, Andy Burnham’s decision to go all out for franchising has cut through perhaps more than any other single non-London mayoral initiative has ever done. It’s the only big Mayoral policy that most national journalists can name. Taking back control of the buses in Greater Manchester spoke to the conurbation’s sense of self like little else could. 

Meanwhile, as the pandemic becomes less dominant in lives and headlines, it creates a space for attention to return to the climate again. A transport decarbonisation strategy should drop soon which will set the terms of engagement over the level of the UK’s ambition on transport in the run up to COP26 in Glasgow. Importantly too, the environment is no longer seen as separate from, and indeed a drag on, the economy. Decarbonisation of key sectors of the economy has now scaled up sufficiently for the ‘green economy’ to become one of the drivers of the national economy. Green buses being one part of this.

So that’s the half full glass – but what is there for the pessimistic among us who suspect the glass is half empty? Whitehall is conflicted. Despite the big ambitions of the bus strategy, and on climate, there is the instinct to go back to ‘normal’ both on funding levels and on returning local public transport to a ‘commercial’ basis. This instinct is strongest at HMT which is in full on bean counting mode. Meanwhile the trajectory of recent spending reviews has been to screw down non-protected Departments’ core funding (including both for DfT and MHCLG). A lot of the DfT’s budget is also already spoken for on HS2, national rail and the national roads programme. All of which squeezes out support for local transport. And all of this is set against a backdrop whereby year on year use of local public transport gets more expensive when compared with car use. As long as this is the case, then you have to pour more and more money into public transport to have a hope of keeping it in the game.

So, which of these factors will prevail when it comes to funding from June 21st and beyond? It’s all to play for but the bus strategy feels like the strongest card we have. After all, what sense would it make to take decisions on funding post June 21st which will lead to fares hikes and service cuts on public transport when we have a PM-backed bus strategy which promises the exact opposite? As far as kryptonite to use on the Treasury goes – it’s the best we’ve got. But even so, a strong case will need to be made both in the run up to June 21st and to the multi-year spending review due in the Autumn. A case that brings to life the key role the sector has played both during the pandemic and will play in building back better afterwards. A case that needs to be part of a wider and smart fight back. What might the other elements of such a smart fight back be?

Evening up the comparative cost and ease of using local public transport compared with driving is never easy. Especially given the culture war dimension. But the Super Thursday elections give some hope. The anti-Low Traffic Neighbourhoods movement made no headway in the London elections (indeed, in general, the Mayoral candidates with progressive agendas and/or strong delivery records on transport, did well). The Welsh Government also now has a mandate to pursue its commitment in its transport strategy to ‘develop a fair and equitable road-user charging in Wales and explore other disincentives to car use…’. Alongside that there are cities that will now be pushing ahead with further measures to improve air quality which will also bring dividends for public transport.

As well as supporting and nurturing these kinds of initiatives, a smart fight back should also involve picking a few fights where money on transport is being spent on what can no longer be justified in a warming world. Good on the Rail Delivery Group for showing how it is done by fronting up in the media on making the case for Air Passenger Duty not to be cut. The absurd scale and costs of the zombie national roads programme is there for the taking. 

Alongside these efforts to level the playing field we also need to find other ways of getting people and politicians excited about public transport. Free fares certainly does this when it’s been introduced in some smaller cities and towns in Europe – but less attention has been given in the UK to the big European cities that are now seeking to emulate Vienna’s 365 Euro a year travel pass (one Euro a day). It’s striking, it’s simple, it’s cheap to use – whilst still raising some revenue. Meanwhile, in Scotland, the age groups that pay to use public transport is shrinking. If you are under 22 you now get free bus travel.

So, what does a smart fight back look like in summary? Find ways of getting people (and politicians) excited about public transport. Nurture every brave initiative that emerges to even up the score between the cost of using cars and the cost of using public transport – whilst picking some strategic fights with expensive and regressive transport policies that are obviously past their sell by date. Keep your eyes on the decarbonisation prize – all rails and bus lanes lead to Glasgow. Think about fares when seeking to win back as much of what we had – and in growing new markets where we can’t. Fight smart – because the tough bit is about to start.

Jonathan Bray is Director at Urban Transport Group

This blog first appeared in Passenger Transport Magazine