Labour shies from renationalising rail
Saturday 30 March 1996
In a long-awaited speech, Clare Short, Labour's transport spokeswoman, finally set out the party's policy, which was presented by senior party sources as "realistic and achievable".
However, the policy falls well short of a firm commitment to renationalise Railtrack quickly, as was being demanded by the unions and the Left. Ms Short, speaking in Swindon, Berkshire, said that Railtrack would only be renationalised depending "on the availability of resources, and as priorities allow". She also failed to specify what percentage of Railtrack would be bought back - and the Government has yet to announce how much is to be sold, although it will be at least 51 per cent.
Gordon Brown, the shadow Chancellor, has clearly won the argument in preventing any firm commitment to renationalise, even though many Labour MPs argued that the party should not allow the shareholders of a privatised Railtrack to make profits out of public money. Currently, 94 per cent of Railtrack's pounds 2bn-per-year income comes from track access charges, which are paid by the train-operating companies who receive pounds 1.8bn a year in subsidy.
Despite Mr Brown's victory, the Tories seized on the speech, saying that it was a return to old-style Labour pro-nationalisation values. Brian Mawhinney, the Conservative Party chairman said: "This is just nationalisation; `New Labour' 50 years old - driven by trade unions and John Prescott [deputy leader] to nationalise."
However, Michael Heseltine, the Deputy Prime Minister, took a different tack as he said the plans were "vacuous" and proved that Labour was not fit to govern because they failed to answer key questions about the future of the industry.
It is clear from Ms Short's speech that Labour in government would do little to change the complex structure of privatisation set out by the Railways Act 1993. However, she said that Labour intends, by legislation, to give enhanced powers to the Rail Regulator to control the industry and get value from the industry's pounds 2bn-worth of public subsidy.
In a mischievous part of the Act, presumably aimed at future Labour administrations, the Government specified that from the beginning of 1997 the regulator would no longer be subject to guidance from ministers and Ms Short has clearly committed Labour to ensuring that the regulator would have enhanced powers.
Ms Short wants the regulator to impose "fair access charges", and this may result in a reduction of Railtrack's profitability. While this increases somewhat the political risk and may deter some individual investors from buying Railtrack shares which go on sale in early May, the City appears satisfied that Railtrack will be a good investment. One City source said: "Most people were worried that Labour's statement would have been something more material."
The City was particularly pleased that Ms Short said: "there is no question of existing contacts being cancelled against the wishes of the parties to them".
One firm commitment is that Labour will rein back on the profits which Railtrack can make from property development. Currently, Railtrack can keep 75 per cent of the profits, but Labour intends that all proceeds should be used to keep fares down.
- 1 Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
- 3 World learns of app that shows you who unfriended you on Facebook, app promptly crashes
- 4 Chris Moyles reportedly set to make radio comeback with new breakfast show on XFM
- 5 The Greece debt crisis explained in less than 100 words
Florida man sentenced to two-and-a-half years for having sex on the beach in front of a child
Autistic teenager beaten up by bullies makes them watch 20-minute video about autism
Tube strike July 2015: Is it still on? Everything you need to know about the industrial action
Eiji Tsuburaya: Godzilla co-creator honoured in today's interactive Google Doodle
Florida teacher sentenced to 22 years in prison for sexually abusing three pupils
More Britons believe that multiculturalism makes the country worse - not better, says poll
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
Sickness and disability benefits could be reduced by £30 a week as part of £12bn welfare cuts
£23000 - £27000 per annum: Recruitment Genius: A Business Analyst is required ...
£16000 - £23000 per annum: Recruitment Genius: To succeed, you will need to ha...
£8 per hour: Recruitment Genius: This is an opportunity to join an award winni...
£7 - £9 per hour: Recruitment Genius: Are you outgoing? Do you want to work in...