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Nationalisation isn’t the solution to fixing Britain’s railways

2 January 2019

4:48 PM

2 January 2019

4:48 PM

It’s the New Year, which must mean that railway fares are up again – this time by an average of 3.1 per cent. Jeremy Corbyn has said the latest price hike is a ‘disgrace’, and commuters forced to shell out more for their journeys are likely to agree.

No one – not even Chris Grayling – is pretending that Britain’s railways are perfect, or that the system that they operate under does either. The Transport Secretary has in fact explicitly stated this week that ‘the franchising model cannot be the path for the future’. But at the same time, there’s something that’s not said often enough, or even at all: Britain’s rail network is actually not that bad.

As a new briefing by one of my colleagues at the Centre for Policy Studies points out, customer satisfaction ratings in Britain are consistently higher than all other big European rail networks. User numbers have doubled since privatisation; and railway has almost doubled its share of passenger journeys in recent years.

Yes, punctuality is a problem: Britain was ranked 20th in an EU survey in 2016. But much of that is because we use our track more effectively and intensively than pretty much any other country. Pushing through more trains means less slack in the system when things go wrong. And while this year’s timetable fiasco – as well as bad weather earlier in the year – meant punctuality dropped in 2018, things are still much better than in the dog days of Railtrack.

When it comes to reliability, frequency of trains and quality of stations, Britain thumps the French and Germans on satisfaction ratings (even if the UK does fall down the rankings when it comes to getting a seat). In fact, the EU, pre-Brexit, was sending delegations over here to learn from us how to run better railways for less subsidy than the rest of its members are managing.

And yes, prices are high and getting higher. That’s painful for commuters. But it’s also partly a result of a decision to make them pay the price of their own journey, rather than have it subsidised by the general taxpayer. This is why saying ‘we’ve got the highest prices in Europe’ is misleading: in Europe people are mostly paying for trains through taxes, not tickets. In UK, it’s the reverse. Given that commuters tend to be richer than the rest, it’s not entirely obvious that asking others to pay more to make their fares cheaper is the solution.

Another point that needs to be made, given Jeremy Corbyn’s passion for renationalisation, is that bringing the rail network back under public control is a slogan rather than a solution.

For all the talk about evil franchise operators draining money out, the contracts they’re under mean they’re often acting more as contractors than actual operators. They are effectively being paid a management fee for running railways according to government prescription. The 3.1 per cent fare hike today, for example, is happening because government says that’s the figure. And it’s calculated based on RPI (a bad, high measure of inflation) because that’s the measure government likes. (It’s also the measure in all the contracts running throughout the rail system.)

Labour’s shadow transport minister Andy McDonald is right that raising fares by CPI, rather than RPI, is a way to reduce ticket prices for consumers. But there is another way that ticket prices might be reduced that I would bet Labour is less keen on. The RMT and other unions say they want to end the great rail rip-off. If so, will these unions moderate their own wage demands, which are a significant part of rising costs – including their demand that the RPI link be retained when it comes to their own increases? I’m not holding my breath.

Jeremy Corbyn was today pictured standing at King’s Cross alongside banner-waving RMT activists, calling for lower fares. But again, it’s not entirely obvious that giving the unions more control over the rail network – even if you strip out the nasty, evil privatised train operating companies – will result in lower costs for commuters.

Things are far from perfect on Britain’s railways. But they are better than we think – and better, too, than most of our European rivals. There is very definitely a conversation to be had about how we can improve things. But “Nationalise Now!” is not a very useful starting point for it.


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