The Age of Steam ended decades ago; in the Nineties, privatisation may be threatening the future of rail itself. Ian Jack asks why this exceedingly unpopular sell-off is going ahead. Overleaf, Christian Wolmar on the lunacies BR's breakup has already produced
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The Independent Culture
In the middle of the last century, Britain decided that India should have railways. They would be a great aid to commerce, to the military and to the British idea of civilisation. The trouble was that British capital was reluctant. Railways in 1850 were almost entirely confined to industrial Europe and parts of North America; who could tell if they would work - would pay - in a rambling, dusty, feudal empire in the East? To overcome this feet-dragging on the part of the cautious British entrepreneur, the government decided to provide what these days would be called a sweetener. The dividend on shares in Indian railway companies would be guaranteed at five per cent, which meant that however badly the companies themselves performed - however extravagant their civil engineering contracts, however large the loss - the government would stump up annual pay-outs to the shareholder from other revenues - taxes, rents - that it had accumulated in India. As the shareholder was likely to be British and the taxpayer likely to be Indian this scheme planted the roots of the economic argument for Indian nationalism. The rulers were getting more out of this deal than the ruled. More specifically, the farmer on the stopping train to Baggagepore was subsidising the shareholder c/o the Old Manor, Chipping Sodbury, who, inspecting his dividend cheque over his morning kipper, had absolutely no interest in whether the stopping train several thousand miles to the east of him eventually reached Baggagepore or not.

A hundred years later, after many decades of more orthodox state intervention had eventually provided India with an extensive and well-run railways system, an economic historian called Daniel Thorner devised a phrase for the original scheme. He called it "private enterprise at public risk".

They are words which deserve to be hung round the neck of the present British Government and its mournful succession of Transport Ministers, Rifkind, MacGregor, Young. It has fallen to this government and these men to try to convince us that the privatisation of Britain's railways will benefit the traveller rather than the entrepreneurs, lawyers, accountants and advertising agents who have been wooed with large dollops of public money to make privatisation "work", which in the short term (is there any other term now on the Conservative agenda?) means to make it happen. And so we have a great national asset, Railtrack, sold at a knockdown price with completely spurious first-year dividends, and franchised railway companies that will continue to depend on public subsidy. As a result the railway system becomes more fragmented, more confusing, more difficult to use, and (with the annual public subsidy to Railtrack and the companies which own the rolling stock increased from pounds 1.1bn to pounds 1.8bn) actually more expensive.

Why has it happened? That seems to me one of the central mysteries of the present regime. Governments can become unpopular for many reasons that are often outside their control - unbidden fluxes in trade, technology, society. But here is a wilful measure which has not been prompted by any social or economic pressure. It is certainly not popular (even the Tory press has been at best lukewarm). Privately, many Tory MPs despair of it (though that aurora borealis of politics, the Tory back-bench revolt, never did more than its customary shimmer). The only obvious reasons are the ideological and the stubborn. One last thing to privatise; we said we would privatise it so we shall. And, of course, a quick few billion to the Treasury from the last spoons in the family silver, even though ( a continuing bill in the future) they had to bribe the buyer to take them off their hands.

But there was also, I think, another calculation. The privatisers believe that railways do not matter, that the storm of opposition has been largely sentimental, that Britain could operate as an economy and a society just as well without a single piece of track outside the commuter lines to London. The signallers' strike of 1994, after all, did only small damage even to the suburbs of the South-East. Freight continued to trundle down packed motorways. People made alternative journeys by car, bus and plane, or stayed at home with their modems. There was frustration, aggravation, but no national crisis.

If you believe that the advance of cars, trucks and road is unstoppable - and, more than that, to be encouraged - then railway privatisation makes perfect political sense. Subsidies will be reviewed; costs will be screwed down; shareholders need to be paid. Train by train, line by line, the system will shrink, and the government (any government) will not be to blame. It's not our fault, squire... the franchise operator simply couldn't make a go of it (apart from the stations that he turned into shopping malls)... sorry, but it's entirely a matter for the Railway Regulator.

If you believe, on the other hand, that Britain's railways need a renaissance for all kinds of good reasons - social, environmental, economic - then their hurried, ramshackle privatisation is probably the largest and certainly the most avoidable disaster to be visited on this country during its Major years.