Who wants the railways to be privatised?
Sunday 24 January 1993
The views we publish on this page on the privatisation of British Rail come from a wide section of opinion - expert and political, foreign and domestic. None of it comes from the most obvious antagonists of the Government's proposals, the Labour Party, and yet none of it offers more than the faintest support for government intentions.
Why, then, are John Major and John MacGregor, the Secretary of State for Transport, so determined to press ahead? The core of the Government's reasoning was set out in a letter from Mr MacGregor to newspaper editors when the railways Bill was published last week. Of British Rail, Mr MacGregor wrote: 'The existing culture is more about keeping the trains running than the market- oriented thrust of identifying what the customer wants and then being flexible enough to deliver it.' This market-speak of thrust and flexibility will, we are promised, deliver 'a better railway service' and 'greater value for public money' and take us grandly into 'the 21st century'.
Most people would prefer a closer and more certain destination: East Grinstead or Glasgow, say, in frequent, clean and comfortable trains that keep to time. A culture committed to keeping the trains running, backed by the kind of substantial investment enjoyed by other European countries, has been proved throughout the world to be the best method of getting there.
Train travel in this country threatens under privatisation to become a public curiosity, rather as it started. In London in 1808 (left), Richard Trevithick built a circular track surrounded by a high fence, and the curious paid to see a little engine going nowhere but round and round.
'I do not believe it is possible to privatise the railways. . . . Last year the railways lost pounds 763m, of which the London area accounted for pounds 182m. No one would want to take on a loss of that size . . . unlike roads, rail tracks go from A to B and you cannot change the routes. Further, each train is tailor-made to its track. You cannot change the nature, speed and method of traction. . . .' Lord Ridley, former Secretary of State for Trade and Industry. (Evening Standard, 30 Nov 1992)
'I begin to wonder if we aren't trying to privatise some things which basically can't or shouldn't be privatised . . . whether we should be thinking about privatising coal or the railways.' Lord Young of Graffham, former Secretary of State for Trade and Industry. (Jan 1993)
'Am I absolutely sure it will be a success? No, I'm not.' Lord Whitelaw, former Home Secretary. (Panorama, 14 Dec 1992)
'The Government should . . . return privatisation to the drawing board.' Daily Telegraph. (Leading article, 4 Dec 1992)
'All businesses are better run as profit-making private companies than huge state monoliths. But Mr MacGregor has made it clear that his slow train to privatisation will require ribbons of red tape. The list of quangos he proposes to create could have been drawn up by a Labour government in the 1960s . . . the Government . . . would be wise to rethink this risky undertaking.' Daily Express. (Leading article, 23 Jan 1993)
'Do you think services would improve or get worse if British Rail were privatised or would services not be affected?'
Get worse 40 per cent; improve 33 per cent; not be affected 15 per cent; don't know 11 per cent. NOP opinion poll. (October 1992)
'Leaving network benefits to the market will not work in passengers' interests, and could lead to back-door fare increases: where a passenger travels out by one operator's service on a reduced fare and wishes to return by another's, there is every prospect that the difference in fare . . . may be levied . . . it will be passengers who pay the price as operators seek to maximise profits.' Central Transport Consultative Committee, the statutory 'watchdog' representing rail users. (22 Oct 1992)
'If a licence fee is to be charged to operators on a flat-rate basis, as with road vehicles, there seems to be little point in taking the track into private ownership . . . Conversely, if the charges are to be variable . . . Railtrack will have to charge far more heavily for rural lines than for urban or main line ones . . . As long as road pricing is not generally applicable, track charges would seem to be discriminatory.' National Consumer Council. (11 Nov 1992)
'I think we have had one letter; one.' Mike Patterson, Secretary, Central Transport Consultative Committee, asked how many letters had backed BR privatisation. (Select Committee on Transport hearing, 11 Nov 1992)
'Our witnesses - including financiers, lawyers, leasing companies, prospective franchisees and respected transport professionals - have frequently been sympathetic to the concept of greater private-sector involvement in the provision of railway services. However, few . . . endorsed the Government's specific proposals.' Select Committee on Transport. (Interim report, 13 Jan 1993)
'Would you agree or disagree with the following contentious statement . . . that the Government could be accused of having starved the railways of investment for some years, failed to produce a long-term plan or the necessary funds to implement it and, by cutting . . . grant over a period of years, increased the number of complaints and, as a result of the increase in the number of complaints, have produced a proposal which might be considered more dogmatic than pragmatic? . . . I am a Conservative Member of Parliament, so it could not possibly be my views, I am just trying to draw you out, you understand.' Robert Adley, chairman of the Transport Committee.
'I would agree.' Bernard North, Institution of Civil Engineers.
'I would agree.' Tony Young, Institution of Civil Engineers. (Committee hearing, 11 Nov 1992)
'The economics of railways may not attract private-sector investment.' David Clark, head of privatisation unit, Barclays De Zoete Wedd. (25 Nov 1992)
'Several European railways have followed in principle British Rail's lead in internal creation of individual profit-centred businesses, and subordination to them of the production functions. Britain's Transport Minister appears to anticipate the same Continental respect for his privatisation scheme. It will be astonishing, however, if any Continental European government, let alone its railway, views this as better than a dogma-driven exercise, utterly irrelevant to national need.' Jane's World Railways. (August 1992)
'Uncertainty over privatisation is affecting rail investment, especially for companies concerned with track and signalling . . . if the industry is forced to cut capacity because of these short-term problems, any future new orders will have to go overseas.' Steer Davies and Gleave, independent transport analysts. (27 Oct 1992)
'If you take the Clapham train crash, which was caused by signals failure . . . it would be impossible . . . for the traveller to know whether to sue the train operator, Railtrack, who run the signals, or the owner of a sold-off Clapham station.' Theodore Goddard, solicitors. (22 Jan 1993)
'Government plans . . . ignore the need for investment, exacerbate the growing imbalance between road and rail funding and lack a coherent strategic plan for their integration within Britain's transport system.' Royal Institution of
Chartered Surveyors. (22 Jan 1993)
THE RAIL BOSSES?
'My view is that a railway should meet the social needs of the country as well as the economic needs. There is plenty of opportunity for the private sector to come in and assist that process, but whether the best way of doing that is by breaking up the railway I have doubts. You could mould it and bend it; but if you restructure it, the chances are that you could break it . . . it will take a long time to put it together again.' Sir Bob Reid, BR chairman. (The World This Weekend, BBC Radio 4, 20 Dec 1992)
'Logic has been abandoned a long time ago. . . . In my opinion there is no way that private operators will make money out of operating trains. . . . The Civil Service has always wanted to close lines to save money, as Beeching did in the closure programme of the 1960s. But some of the lines closed were essential feeder lines to other lines. Without them, the lines identified as profitable suddenly became underused and unprofitable. . . . Why are we doing this?' Lord Marsh, former Minister of Transport, former BR chairman. (Transport committee hearing, 9 Dec 1992)
'You cannot do business on an old railway if there are new roads and airports. You must first invest, then you can privatise. I don't see any commitment in your Government's proposal to modernising the railway network.' Anders Lundberg, Swedish State Railways. (Transport committee hearing, 9 Dec 1992)
'There will be a daunting array of regulators involved in the running of the railways. Far from encouraging private-sector interest, there is a real danger that privatisation will be a blueprint for bureaucracy. We urge the Government to think hard before going ahead with this legislation.' Howard Davies, director general, CBI. (21 Oct 1992)
'There is nothing that will adjust the cost structure or improve the flexibility of rail services to make it more competitive with road transport.' Freight Transport Association. (18 Nov 1992)
'We are deeply sceptical about the proposals. . . . The Government should look at what services the railways should provide in 10, 20 or 30 years' time and then decide on what parts of the railway should be publicly or privately owned. Investors will be deterred by the clapped-out services; they will cherry-pick the lines that have seen investment.' Sir Alastair Morton, chief executive, Eurotunnel. (Transport Committee hearing, 2 Dec 1992)
THE PRIVATE OPERATORS?
'We would want control of the track bed. We don't want the track authority running it because it would then control departure time and speed, on which our competitiveness would depend.' David Benson, vice-president, Sea Containers. (Nov 1992)
'At the moment we are not in a position to say if we will proceed.' Bob Tebb, development manager of Yorkshire Rider, a company named by the Department of Transport as interested in operating private services. (Nov 1992)
'I frequently ask myself who these 50 companies (named by Department of Transport as potential private operators) are. I haven't been able to find them.' Michael Roberts, CBI policy adviser. (Nov 1992)
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