Time for bigger thinking on our railways

9th July, 2014 5:37 pm

There is a lively debate across the country about the future of our railways. At the heart of this is a sense – shared amongst the public – that the rail system is not delivering the best deal for us as passengers or taxpayers.

For a start, our railways are far more expensive than in other countries. The botched privatisation of the 1990s created a complex split between train, rolling stock and track which has led to needless costs.

Our rail fares are amongst the most expensive in Europe – and inflation-busting rail hikes of 20% under this government has made this worse.  A minefield of different tickets, rules and routes has left customers feeling like the system is trying to ‘rip them off’.

In the midst of a cost of living crisis – and at a time when there is less money to go around – it’s pretty obvious the status quo is unsustainable and in need of urgent reform.


Labour’s task is to develop a policy response that measures up to the scale of the problem. This goes deeper than whether the railways are in public or private hands. It is about whole-system reform.

Simply accepting the status quo, as the Tories have done, is not an option for Labour. But nor is a throw-back to the days of British Rail. Public ownership did not solve the problem of chronic underinvestment in the railways or the lack of long term planning. We need different solutions that speak to challenges we face today.

There is no ‘guiding mind’ for the railways planning investment to meet the needs of this generation and the next.

We have a monopoly market for rolling stock that has allowed a handful of companies to make huge profits from expensive trains.

And we have a government that has presided over a franchising fiasco, most spectacularly on the West Coast Mainline, which has cost the taxpayer over £50 million.  We need a better system – one that starts from the public interest.

We have a bizarre situation where state railways from other countries can bid to run our rail services yet our own Directly Operated Railway (DOR) is unable to bid even to continue running the line they currently operate, the East Coast Mainline. This doesn’t add up. For the Tories this isn’t about the public interest. Rather than having the best operator for the job – public or private – running the rail service they have put ideology before common sense.

There are big reform questions facing the next government. The Tories clearly have no answers to these. And while the last Labour government turned around investment in our railways our 2010 manifesto, which loosely welcomed co-operatives and mutual to bid for franchises, didn’t provide an answer to the challenges we now face. It didn’t contain a commitment to legislate for the public sector to be able to run routes. Nor did it deal with the wider reforms that are needed for our railways to succeed.

Our 2015 manifesto must do better. It must provide answers to the wider reform challenges we face – and this must go beyond the nostalgic antidote of re-creating British Rail. This means answers to how we plan future rail investment when there is less money around? How we drive value for money and innovation? How we get Network Rail to come together with operators to create a system that works better for travellers and commuters? How we give local areas the power to shape their railways so decisions aren’t made by managers that are miles away? And most important of all, how do we deliver a better deal on fares for hard-pressed commuters?

These are big questions that Labour is seeking to answer as part of its policy review. The country expects us to rise to this challenge. Our task in the coming weeks and months, is to set out serious reforms that stand up to this test.

Jon Cruddas is the Chair of Labour’s Policy Review

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  • David Lindsay

    He’s getting there. Bidding for something that you already own? No, we all know where this line of thinking ends up.

  • Jamie

    Allowing the state to ‘compete’ with private operators to run rail franchises seems like a confused, illogical policy.

    Keeping the costly and inefficient franchising system in place is a curious move, when the benefits of public ownership through reinvestment of fares and greater integration and efficiency are clear to see in other national railway networks.

    By allowed the state to ‘compete’ with the private sector, we would see the ludicrous situation of contracts being awared to the bidding team with the best lawyers, accountants, lobbyists, and PR. Private companies are very good at winning tenders, it’s what they do. They are however somewhat less fantastic at running trains in a natural monopoly.

    Railways are a natural monopoly. They require integration and co-operation to realise efficiencies and bring the best service and value to the passenger. Around 70% of the public want to see the railways back in public hands. Surely now is the time for Labour to define itself on this issue.

    • JoeDM

      It allows the party leadership to spin the buying back of individual franchises, whilst knowing that the reality is that the current system will continue as it did under 13 years of the previous Labour government.

      • treborc1

        Yes it gets the left excited or they hope while saying nothing to annoy the right.

        • i_bid

          I seriously doubt this dog’s dinner of a policy would get any left-winger excited.

    • foto2021

      In the 1990s I asked my MP (Conservative) why the Tories were so keen on privatisation of the railways when it was self-evidently going to cost more. He replied (with unexpected candour) that British Rail did not donate to Conservative Party coffers whereas the privatised rail operators would.

      It is also worth relevant that the New World Order doctrine espoused by the Bilderberg Group and other, even more shadowy organisations requires that governments across the world should work towards the privatisation of ALL public services. Hence the ongoing privatisation of the NHS and Royal Mail …

  • i_bid

    Starting to seem like Cruddas has just been given the task to deliver the typical New Labour inertia simply because he can cloak it somewhat by waffling on like a champion.

  • IWillmore

    The analysis in this article is correct: the privatisation of the railways created a system which is complex and inefficient, and therefore wastes a large share of the public money it still requires. But the conclusion seems to have been typed by a comatose, if not actually dead, hand. The railways work best as a vertically integrated public service. Since the next Labour government will be short of money, it follows that the best way to achieve this is to take franchises back into public hands as contracts expire. Refusing to acknowledge this has nothing to do with transport policy and everything to do with wanting to look harmless to business leaders and the City. Just as it did when Blair and Brown blocked taking the railways back into public ownership when Labour was last in Opposition. So we have learned nothing and forgotten nothing since. Sigh.

  • treborc1

    Lets not forget the last Labour Government of which you were part did sod all to sort out the mess your now blaming the Tories for accepting, lets not forget that you have three terms to do something.

    This is a mess and your simply playing politics, and the public are not that stupid, you have a choice you can leave it as it is and tinker with it, or you can dam well bring in back in to the public sector and then sort out the price of tickets and how to run a railway..

    But what your offering now is as bad as we already have and the game is to get those on the left to try and vote for the bed room tax the offer of electricity and gas yet that is still up in the air without any more details and then the offer was should we bring the railways back into the public sector, I bet progress had to go home and change their knickers at that, Miliband phone must have been red hot and now this is your fix from Progress forget it.

    This looks like Miliband has been told by his masters and you your self have been told forget it now tell this this bloody mix match of rubbish tell you what leave it as it is.

    Labour always has the answers when in opposition, once in power they simple forget what the question was.

    • PoundInYourPocket

      For me this is a definning point. If Labour don’t state clearly at some point that where there’s a natural monopoly there should be public ownership, whatever creative form that takes, then the Labour party has given up on socialism. And I need to hear it on the NHS as well and teaching. Even if they can’t fully achieve it they should state it’s advantages and aim towards it. Otherwise the differences between Labour and the Tories are on personal taste rather than policy.

  • Daniel Speight

    So Jon tell us about the dead hand of Ed Balls. Britain’s basic infrastructure does need a different method of ownership. This doesn’t mean a return to some of the mistakes made by the 1945 government in how it nationalized. (It should be remembered with railways and coal that nationalization of some sort was really the only sensible answer after the war.) We can look at ways of bringing all involved including government, workers and customers into the decision making. Why we haven’t learned anything from the German experience I cannot fathom.

    But if all Labour is offering is a cosmetic fig leaf then it does not deserve to be elected. Jon you do need to bring out into the open the conservative forces you are facing inside the party. Remember that daylight is, as they say, the best disinfectant. A bit of courage now will help in the long term.

  • Addy

    And when we talk about overall rail policy in general terms we do not mention HS2? Wow!

    So, we live in ”a time when there is less money to go around” but we can incur a debt of many billions to build one single line – and not mention it when we discuss rail policy! Amazing.

  • John Ruddy

    If there is less money to go around, why should we pay up to £10m per franchise to bid for something that the state may not “win”? It makes no sense.

  • Ben Gardner

    Surely Cruddas can’t actually think that allowing state operators to bid for franchises is the solution to the significant problems with the rail network? How do auctions for short term individual franchises resolve any of the issues he highlights? How does in encourage investment, long term planning, lower ticket costs?

    We don’t need to reinvent the wheel here – just look at the other national rail system Cruddas mentions and copy their set up. if that means public ownership than so be it – if a Labour politician can not accept that in some cases in makes sense to run things collectively then why is he even in the party?

  • foto2021

    The annual subsidy to British Rail in its last full year was £728 million. The annual subsidy to the privatised railway currently exceeds £6 BILLION, so the privatised railway costs taxpayers eight times more.

    At the same time, fares have skyrocketed. A standard open return from London to Manchester cost £85 with British Rail. Now Virgin Trains charges a whopping £321 for the same journey.

    That’s a rise of 277%, or in other words the ticket costs more than 3.7 times what it did with British Rail. If the ticket price had risen only with inflation, it would have cost £135 rather than £321. So both taxpayers and fare-paying passengers are getting a spectacularly bad deal.

    British Rail was not without its problems, but it was exceptional when it came to making taxpayers’ and fare paying passengers’ money go further.

    Another problem is debt. British Rail had to live within its means and could not borrow money to fund purchase of rolling stock, nor infrastructure improvements. Everything had to be accounted for within its strictly limited budget.

    Network Rail, on the other hand, has borrowed extensively and current plans show accumulated debt extending beyond £30 billion. This debt, and the interest on it, will all have to be repaid by taxpayers.

  • Redshift1

    Wanky rubbish. Stop this nonsense triangulation and nationalise the bloody thing. It’s overwhelmingly popular with the public so really – why not?

  • RussellAlbert

    This also fails to identify the extent to which ridiculous Trade Union power hinders so much change. I know a couple of people that work for Network Rail and the stranglehold the Unions have is absolutely absurd.

    The pattern of Union power is my only concern about going back into Public hands as in general I think it could work as long as we don’t add layers of management and workers with no incentive to allow change.

  • The reference to ‘operators’ and the need for network rail to work with them suggests that Jon Cruddas has already decided that the basic structure of the railways will remain as it is, with the proviso that public companies can compete for the franchises. There are alternatives to a fully top down nationally organised form of public ownership which would still assure social ownership and control but the leadership of the LP seems frightened of the very idea.

  • Pingback: Tories put ideology before common sense | rail replacement service()


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