Is profit being put before safety?
Is profit being put before safety?
Not directly. Accidents are bad for business and railway managers know this. The disruption caused to the system causes delays and can have a knock-on effect throughout much of the network. Moreover, in public relations terms, these recent rail accidents have been appalling for the rail industry as a whole.
However, the search for profit can definitely have an indirect effect on safety as managers try to cut corners and reduce costs, possibly without proper consideration for the safety implications. Moreover, the very structure of the industry created by privatisation - in which the relationships between various firms are governed by financially based contracts - can increase risks.
For example, Railtrack is only allowed a limited number of line closures each year. Any additional ones will result in compensation claims by the operators. Therefore, there is a disincentive for Railtrack to carry out necessary repair work, and its managers are under pressure to make do and mend until the next time the track becomes available for major repairs. Under BR, there was no such financial pressure.
In the wake of Paddington and Hatfield there have been several calls to renationalise the railways. Is that feasible?
There are many obstacles to it. First, the political will is simply not there. In one of his strangest pre-election pronouncements, Tony Blair promised there would be a publicly owned and publicly accountable railway. But once he was in office, he and John Prescott, the Deputy Prime Minister, made it clear that they had no intention of renationalising the railways.
Secondly, nationalisation is well out of fashion in the European Union, and it is difficult to see the European Commission agreeing to a govern- ment takeover of the industry. It would be seen as a market distortion - the current obsession in Brussels - and that would pose a considerable obstacle. Finally, there is the issue of money.
Ultimately, however, if there were strong political will allied to public support, some form of part-nationalisation, at least of Railtrack, might be feasible. Indeed, Gerald Corbett, Railtrack's chief executive, suggested this to ministers earlier this year, but they rejected the idea, largely because they do not want the Government to be involved too closely in the railways as they feel this would be a vote-loser.
At the very least, there should be a debate about what sort of structure is needed for the rail industry, something the Government has been reluctant to embark upon.
Gerald Corbett's resignation as the chief executive of Railtrack was not accepted by the board. Should it have been?
Unequivocally, no. His resignation came out of a genuine feeling that as chief executive of Railtrack he was responsible for the Hatfield disaster. However, while the accident is a result of failings by Railtrack, the precise roles of the company and of its contractor, Balfour Beatty, will only come to light when the inquiry report is published next year. Therefore, Corbett's resignation did not entirely make sense.
Moreover, Corbett is paying the price for Railtrack's failings in the early years of privatisation when it did not invest sufficiently, and for decades of underinvestment by successive governments stretching right back to the First World War.
The Hatfield accident was caused by a new type of metal fatigue which has only begun to be found in the past couple of years, in Britain and in Europe, on high-speed lines. Corbett cannot properly be held responsible for this. His record in the three years since he took over the job has been a good one. He has eschewed Railtrack's parsimonious attitude, when it seemed interested only in maximising profits for shareholders. Instead he has recognised that as the owner of a national asset the company has social duties to provide a good railway. If he had resigned in the middle of this important period, it would have left a gap at the heart of the industry. Finding a replacement for a job which, while well-remunerated, inevitably attracts tabloid opprobrium would have been difficult.
Corbett says that the industry was privatised in order to maximise proceeds for the Treasury and that there are too many companies in the structure. Is he right?
Absolutely. The Treasury instigated the sale of the railways early in the 1990s and designed much of the structure that emerged in 1996-97. The railways were thought to be a dying industry and a burden on the taxpayer. The main impetus was to reduce the level of subsidies. So a system was designed to attract firms to bid to run the railways for set amounts of subsidy which declined year on year, forcing them to increase revenues. So while the initial pay-out by the Treasury was a large increase, by year four the companies would be getting less than that given to BR. The Labour government has reversed that trend and has promised extra money to the railways.
And, yes, there are far too many companies involved. The Tories wanted to encourage competition (a rather ludicrous concept on the railway given that everyone has to use the same track), and split the network into 25 different operators with eight different owners. Moreover, there are some 50 or 60 other companies split off from British Rail that make up the industry. These include the infrastructure companies, such as Balfour Beatty, and the three rolling-stock companies.
Privatisation has had a bad press, but are there benefits?
The one big claim for privatisation is that it has taken away responsibility for investment in the railways away from government. The supporters of privatisation always argued that this was the main objective of the sale. Certainly they were correct in pointing out that governments had always blown hot and cold over investment in the railways, seeing it as one of the first targets for cuts during periods of belt-tightening. And, overall, governments had consistently underinvested in the railways.
But the relationship between government and BR was determined by Treasury rules that do not apply in other countries. If BR had been given permission to raise finance through borrowing or issuing bonds, outside the public sector borrowing requirement, then more investment could have been made on the railways. Moreover, these days, with the widespread use of the private finance initiative, it is possible to raise capital for public projects without it counting as government spending.
The other claimed benefit for privatisation is that private firms would routinely provide a better service to passengers, in terms of being more customer-focused. This was a complete myth, as most rail passengers know. The customer service of the private companies has been very patchy and, at times, much worse than in the days of BR.
Are things rosier abroad?
Yes and no. Parts of the continental network are wonderful. The high-speed trains on dedicated tracks in France, Spain and Germany, for example, provide an incomparably better service than those of British train companies. On the whole fares are also much cheaper because they are more heavily subsidised. And as state-owned companies' manning levels tend to be higher, service to the customers is often more pleasant, and there are more staffed stations.
Many of the minor services in Europe, however, are not so good, particularly in France. Moreover, British timetabling tends to be better, with regular services scheduled to run at the same minutes past each hour.
Finally, can you sum up in five points where we go from here to get it right?
Things are moving in the right direction. The Government's massive 10-year investment programme promises £60bn of investment, half-private half-public, into the industry. To ensure that we see improvements on the railway and that this investment is worthwhile, there is a need to:
* Move away from the antagonistic, tightly defined legalistic structure towards co-operative ways of working.
* Reduce the number of companies involved in the railway, and force them to create partnerships.
* Ensure there is government representation on the board of Railtrack and adopt Corbett's idea of part-renationalisation.
* Channel investment towards softer areas such as having more staff on platforms and more of a service culture rather than spending it all on trains, safety and track.
* Hurry up and spend the money, but do it wisely.Reuse content