A Botched Privatisation

Half an hour after the second aircraft struck the World Trade Centre; the email was winging its way to Stephen Byers, Whitehall Minister. The email said, "Its now a very good day to get out anything we want to bury. Councillors expenses?" The next day as the media feasts on the tragedy of 11th September, a largely ignored press release on proposals for cutting local government expenses is unveiled. The job is done and a controversial piece of politics is buried under the rubble of the twin towers along with the countless bodies.

The email sender? Jo Moore, part-time advisor to Stephen Byers, living up to the image of the amoral world of the spinmeister. Little did she know that she had copied the email to someone who had recently been sacked. Revenge is indeed a dish best served cold.

Naturally, we wish to see her head roll for such a piece of crass insensitivity. Naturally, we wish to see all such deceptive pandering to Statism pursued as hotly as the U.S.A. is in the chase for Bin Laden.

Pleased with this piece of one-upmanship, the next big item of news was left until the day that the newsstands were buzzing once again with the news of the first strikes against Afghan targets. I refer to the re-nationalisation of Railtrack when it was put into receivership on 7th October with debts of several billion pounds.

When the British railways system was privatised in 1996, I applauded this wise move towards free market, customer driven services. What I was not so sure about was the decision to sell off the management of the entire track and signalling system under the banner of one company. This stock flotation earned nearly 2 billion for the government but had transformed a socialist monopoly into a pseudo-capitalist monopoly.

I say "capitalist" but the truth was that the government rail watchdogs never ceased to interfere and make their influence felt. Add to this the State subsidies and rescue packages amounting to over a promised 1.5 billion and we can see that this was more like a quasi-socialist organisation in the making.

The downfall for Railtrack was ultimately the diktats of the government concerning the chronology of recent rail disasters such as the Paddington rail crash in October 1999, which left 35 people dead. The public concern fuelled by media hype given to these events ensured that Railtrack would be "persuaded" by the government to embark on a multi-billion upgrade program they could ill afford and which the quality of service did not require.

How short peoples' memories are — especially those who are convinced of the dogma of public services. Looking at a chronology of rail deaths in the 5 years after rail privatisation in 1996 and the years before it is revealing.

In the seven years between 1988 and 1995 (the first year of privatisation), 55 people died in rail crashes. Since privatisation six years ago, the number is 53 people. The numbers are roughly the same and if you discount the most recent disaster in Selby, which killed 10 people, then less people have died per year since privatisation. I discount the tragedy of Selby because it involved a car falling off a bridge onto a railway track into the path of an oncoming train. There is nothing any rail company could reasonably do to prevent such an event.

Two other things also have to be noted. Firstly, thanks to free enterprise, passenger numbers have increased significantly since privatisation and this has an effect on average casualty figures. Secondly, there is the unsurprising revelation that when privatisation was announced, British Rail significantly cut down on rail track and signalling budgets. The obvious intention was to let the privatised companies bear the cost — a cost which proved to be too much.

The media have played a large part in this saga and their obsession with rail disasters is uncalled for when it is realised that far fewer people lose their lives in train accidents than in car accidents. Over three thousand people die in road accidents annually; the figure is in single digits for trains. Indeed, when the statistical analysis of deaths per kilometre of track versus kilometre of road is properly done, then rail travel still comes out far safer.

So, we conclude that rail travel is perfectly safe and the mass media hysteria which surrounds them should be ignored by both politicians and corporate executives.

In the light of all this, what should have been done prior to privatisation? Certainly, an enforced monopoly living off political subsidies was not the solution. The best solution would appear to have been to let those rail franchise operators who actually share tracks pay for the maintenance of them in a proportionate manner.

After all, they are the ones who have the primary interest in the resource and would have the greatest concern as to its state. This was amply demonstrated in the aftermath of the Hatfield disaster of October 2000, which led to Railtrack forcibly closing moneymaking tracks to perform emergency repairs on known, fractured lines.

No tracks means no trains means no passengers means no revenues mean no profits. I think the rail operators have a definite interest in contributing to well-maintained tracks.

As it happens, this competitive, free market solution is politically non-expedient. The government has proposed that a non-profit making organisation be set up to take over the track management. This is obviously a sop to the "people-before-profits" brigade who have been howling dogmatically since the last fatalities.

Unfortunately, forcing the rail operators to maintain the tracks is currently not on since their franchise agreements do not legally bind them. We are stuck with a state-subsidised monopoly for the time being and I can only hope sense prevails when the franchises come up for renewal in the years ahead.

October 13, 2001

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