Now Labour's policy on rail is ... er

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The Independent Online
SBC WARBURGS is not a name which often crops up in the annals of Labour policy-making, but this week it will earn its footnote in party history. By Thursday, the merchant bank handling the privatisation of Railtrack will be in possession of Labour's proposals for the rail system.

The statement, to be included in the bank's privatisation prospectus, is supposed to end the embarrassing year-long battle over the opposition's commitment to restore the rail network to public ownership. Alas, it is likely to disappoint.

Labour will commit itself to a publicly-owned and accountable rail system, but will not spell out how it intends to get there and what money, if any, it would spend. In short, the fine print will be only marginally clearer than before.

Labour's odyssey around rail leads through an extended policy wrangle, several personal rivalries and a committee which never actually met. As one Labour source put it last week: "We have rowed back and rowed forward on this now so often that the public might be forgiven for concluding that we have no idea where to drop anchor."

The committee to look at rail re-nationalisation was set up by Tony Blair at the beginning of last year. It was to be chaired by the deputy leader John Prescott, and include Michael Meacher, the shadow transport secretary. As one source put it: "It was a sensible political device. It allowed us to tell people that all this was under consideration."

But the committee never met, and Mr Blair was disinclined to listen to Mr Meacher - an old Labour survivor of the Callaghan government. "If Michael proposed something," one source said, "Tony's instinct would be to do the opposite". It was already clear that Mr Blair would not commit himself to re-nationalising Railtrack if the Tories sold off 100 per cent, for the money would simply not be available.

In the summer Mr Prescott produced a paper listing options but came to no conclusion. At the Labour Party conference last autumn, the RMT union and its left-wing executive forced a tougher motion on rail than Mr Blair wanted.

Shortly after the conference, Mr Meacher, who had backed the RMT position, was replaced by Clare Short - a forthright figure from the left, but one with whom Mr Blair felt he could do business. In December, Labour set itself a deadline by agreeing to submit a statement to SBC Warburg's prospectus.

This proved a mistake because it exposed splits in the Labour team. Ms Short wanted to switch the pounds 2bn state subsidies from the train operating companies to Railtrack, so allowing greater Government control. Her deputy, Brian Wilson, a Scot with a passionate commitment to the railway network, favoured a transfer of voting rights (but not the shares themselves) from private investors to the Government. This would allow Labour to assert public control without spending money.

Mr Wilson forged an alliance with Mr Prescott. Mr Blair's office, however, said that the scheme would look irresponsible in the City (by going back on a deal done by a previous government) and allow the Tories to paint Labour as the re-nationalisation party. One newspaper report suggested that the Prescott/Wilson view had prevailed; another contradicted it. All this did little for relations in the shadow transport team.

Last week, Mr Blair finally agreed a compromise. Mr Prescott won a firm commitment to a publicly-owned railway (whatever that means), Ms Short to her scheme to switch the subsidies. Mr Blair and Gordon Brown, the Shadow Chancellor, ensured that there was no price tag and that the detail and timescale were too opaque for the Tories to attack with effect.

Labour may live to regret this fruitless wrangle. As one source put it: "Both Blair and Prescott are angry at how this has gone. It has not been a good advertisement for what would happen under a Labour government."