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

The national bus strategy

The national bus strategy

  1. If deregulation is dead then what is this that is replacing it?

For years we have been arguing that passengers in our areas don’t want on-street competition and private companies determining the key public service that they rely on. Instead they want single, integrated bus networks as part of wider single, integrated public transport networks. The national bus strategy shows that argument has now been won. It’s striking too how few friends bus deregulation has now that nobody seems to have turned up at its funeral yesterday to mourn its passing and to defend Nicholas Ridley’s original vision of a free and competitive market for bus services. But if deregulation as we knew it is dead then what is this that is replacing it?

The National Bus Strategy goes into a remarkable level of detail of what bus networks should look like in the future – from how buses routes should be numbered to how the fares should be structured and charged. In essence it wants the kind of bus network you would get through specification via a franchise or through municipal provision. But though franchising (and perhaps municipal operation in the future) are seen as legitimate ways of achieving these goals by the strategy, in effect bus services in England are being herded to the top of an Enhanced Partnership ski slope and given a hefty push. No Enhanced Partnership by April next year – no money. And whereas the few Enhanced Partnerships that exist have taken years to put in place, the Government wants the whole of England to be papered over with EP agreements (other than those who are on the franchise route) in a years’ time.

In some ways, it makes sense to seek to reduce the wriggle room that could translate into years of endless negotiations between local authorities and bus operators only to arrive at a watered down compromise and yet another bus strategy. But at the same time there has to be a danger that, on these timescales and with local government spending cuts having decimated transport planning capacity in the shires in particular, weak and baggy Enhanced Partnerships will emerge in order to access the cash – whilst the details that matter to passengers are spun out into the future. And Enhanced Partnerships are still a product of negotiation – rather than dictation by local authorities on behalf of national government in pursuit of a precise outcome. They also still operate within a deregulated market which is overseen by the competition authorities. So just how far can we expect the Enhanced Partnership tool to deliver the kind of  fully integrated single network with highly specified outcomes that the Government wants all across the country?

More widely, are we now entering – in theory at least – a strange hybrid model for bus provision where those operating bus services (when the music stopped before the pandemic) get to carry on but under a kind of quasi licence from local government which itself is under a kind of quasi licence from national government? And all within what is still nominally a free market where new entrants could burst upon the scene at any moment. Meanwhile, the bus strategy is in danger of bias against the route one option that could deliver the outcomes it wants – which is to write down precisely what you want and ask companies to bid to provide it. Because if you start an Enhanced Partnership to get the funding how easy, legally and otherwise, would it be to later ride two horses by starting the franchising process? How do you work closely with incumbent operators on an EP and at the same time run a free and fair franchising process where non-incumbents are on level terms? It’s strange too that though the document is keenly aware of the problems with timelines on franchising – and sets an ambitious timeline for Enhanced Partnerships – there is no mention of any reforms of the 2017 legislation which could learn the lessons from the slow take up and implementation of the powers it contains.

2. How much?

The National Bus Strategy is not short on ambition. It wants more services serving more places. It wants cheaper and simpler fares. It wants high spec green buses. It wants extensive bus priority everywhere. All of this will not come cheap when the pre-pandemic base case was that subsidy was well below what was needed to stem decline. Keeping bus services running during the pandemic is also burning through cash at a prodigious rate – and no one knows for sure how long social distancing will remain – or whether a post-summer third wave could mean restrictions are reintroduced. We know we have COVID-19 Bus Services Support Grant for now and we know we have the PM’s £3 billion. But beyond that we don’t know too much. Including what the quantum of overall funding will be available for bus, how it will be distributed or what the total price tag would be for all the goodies the Government wants. This doesn’t make it easy for anyone to plan ahead to deliver on both the ambitions and timescales that Government has set. On the plus side, with the PM right behind a policy which has pledged to transform bus services, however much HMT sucks its teeth about the price tag it will be difficult for them now to undermine the PM by cutting the bus industry off at the knees.

3. Beyond the headlines

There are some pretty hefty aspirations loitering in the odd paragraph here and there (all with their own price tags). Check these out for starters…

  • Five Glider schemes. I’m a big fan of Glider (and also good to see Northern Ireland get some attention for the good stuff it does on bus) but Glider works because it was very well thought through for the specific corridors it operates on and because the money was spent to ensure its quality from start to finish. Gliders in England will need to do the same if they are to work anywhere near as well.
  • A review of the eligibility for free bus travel for disabled people with a view to improving equality of opportunity.
  • Through fares for any journey involving bus, rail and light rail.

4. The dog that didn’t bark

The lack of any reference to addressing the antediluvian oversight and regulation of bus safety outside London is a big hole in the bus strategy. How can it be right that for rail and for buses in London, the analysis and data is there on safety risks and accidents (and is being systematically addressed) but nothing close to this exists for buses outside London? There is a glimmer of hope though in the review of the public service registration standards – which could be used to require reporting and data on accidents and risk.

So to borrow some lines from the late great Eric Morecambe. The national bus strategy has all the right notes, but not necessarily in the right order. But with some positive thinking…

Jonathan Bray is Director at Urban Transport Group

A longer version of this blog appeared in Passenger Transport magazine