Jeremy Corbyn is on the right track

We need a pragmatic approach that focuses on what makes the difference – leadership and a strong public-service ethos

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The Independent Online

The new leader of the Labour Party has had a rough first week, but this weekend he has shown signs of regaining the initiative. His plan for a “People’s Railway”, disclosed exclusively to this newspaper, is a welcome injection of new thinking into the public policy debate.

Far from adding to the evidence that Jeremy Corbyn is a wide-eyed anti-capitalist, his new policy suggests an open-minded pragmatist bent on gradual reform. Indeed, for some, his plan to take rail franchises into public ownership as contracts expire might seem too timid, as it means accepting a mixed economy in the railways. 

However, only the most committed ideologues at either end of the spectrum should object. It is worth remembering that Sir Nicholas Ridley, the arch-privatiser of Margaret Thatcher’s government, was strongly opposed to selling off the railways.

Anyone coming to the subject without ideological preconceptions would recognise the problems that privatisation has failed to solve, such as the inefficiency of the railways compared with continental systems, and those that it has made worse, such as the fragmentation, the confused ticketing and excess profits in train leasing. But equally, such a person should recognise that privatisation has also allowed innovation, as well as better punctuality and safety standards.

Certainly, the overriding lesson of the past few decades of British railway history is that neither public nor private ownership is, by itself, the answer to the industry’s problems. As Mr Corbyn points out, when the East Coast main line was taken into public ownership between 2009 and 2015, it achieved high levels of passenger satisfaction. He could also note the excellence of the new publicly owned Overground lines in suburban London.

Hence the wisdom of a pragmatic approach that goes beyond the public-private divide to focus on what really makes the difference to the quality of public services – leadership and a strong public-service ethos.

If we have a reservation about Mr Corbyn’s new direction, it would be that he seems to be insisting that ownership can go only one way. Surely if a private contractor is doing a good job – although that raises the question of how service quality should be measured – it should be allowed to continue. Not least because, if franchises are certain to revert to the public sector, existing franchisees would have little incentive to maintain service quality and investment.

We welcome new thinking, but worry that Mr Corbyn would replace one kind of rigid thinking with another.

Many of the same arguments apply to other utilities. The energy companies are likely to be the next in Mr Corbyn’s sights. They too are unpopular, and his predecessor struggled to achieve clarity, having gained a temporary advantage by promising a price freeze accompanied by vague talk of “resetting” the market. Here, public ownership is less attractive because it means buying out private shareholders. The Labour leader’s idea of printing money to pay for capital investment is one thing: compensating shareholders is another matter.

The problem in all these sectors is that renationalisation seems to promise a dramatic change for the better. The reality is likely to be, as Viktor Chernomyrdin, Russia’s first post-Cold War prime minister, said: “We tried to do better, but everything turned out as usual.”

It may be that Mr Corbyn feels he can take the risk of raising expectations of change beyond what can be delivered. That would be a mistake. As Labour conference approaches, let us enjoy the breath of fresh air, but let us also look forward to thought-through policy substance.