State already owns or subsidises lion's share of rail network

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The Independent Online

Much of the rail network is now state-owned or state-backed. The notion that the rail industry - which was sold off to the private sector in 1996 - is still in business hands is considered to be something of a fiction.

One of the first signs that the network was being slowly taken back in-house by the Government was when Stephen Byers, then the Secretary of state for Transport, forced Railtrack into liquidation. That followed a series of disasters, including the Paddington accident in 1999, in which 30 people died.

Gordon Brown, the Chancellor of the Exchequer, insisted that Network Rail, the state-backed phoenix which rose from the ashes of Railtrack, would simply be business as usual.

But if Railtrack's successor encounters serious financial difficulties, taxpayers will foot the bill. To all intents and purposes it is a nationalised company, according to the Government's critics.

Questions have also been raised about the private sector status of the 25 train operating companies which deliver passenger services throughout Britain.

About half of these operators are receiving state subsidies considerable in advance of those initially envisaged and about a quarter of them are effectively run by the Government's Strategic Rail Authority (SRA). Senior managers at train operating companies argue that they can make few decisions without the authorisation of the SRA.

Since the problems encountered by Railtrack, few people are still arguing that the system is still fully privatised. Only the companies which lease rolling stock to the train operators are truly in the private sector. Critics believe that the rail network has tested privatisation to the limit and found it wanting.

Bob Crow, General Secretary of the RMT rail union, believes the Government's writ is about to be extended.

A team appointed by the SRA is about to take over the Connex franchise in south- eastern England following a decision that the operator was incapable of operating efficiently. Mr Crow believes that the SRA team in charge of Connex could well be forced to pioneer a new regime in which the state is running train services.