Leading Article: Neither elegant nor coherent

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The Independent Online
The pressure on the Government to rethink its plans for the privatisation of British Rail is mounting. The Commons select committee on transport, a Conservative-dominated body, is, we report today, preparing to attack the scheme, which was announced by John MacGregor, the Secretary of State for Transport, within three months of taking office. The committee's chairman, Robert Adley, has warned Mr MacGregor that the scheme's central feature, the attempt to create two bodies, one responsible for track and one for operations, is 'untried' and 'very unwise'.

Sir Bob Reid, chairman of BR, who was brought in from Shell to oversee the exercise, has now come close to saying that he has no confidence in the Government's complex plan. The idea is gradually to franchise the entire passenger network as 30 or 40 packages of routes, minimum services and quality standards, for which private companies would bid. (The state would, for the present, continue to own track and infrastructure.)

BR's chairman told the BBC that he saw the likelihood of disruption and closures in the coming years but little benefit to customers or the nation. Without a change of policy, it is hard to believe that Sir Bob would wish to remain at his post for any length of time - or that a more confident prime minister would allow him to do so.

When Mr MacGregor published his White Paper in July, we commented that it was fiendishly complicated but neither intellectually elegant nor administratively coherent. While continuing to pay lip service to the concept of 'open access' - the idea that any number of operators should have access to particular routes - ministers have failed to demonstrate how this can be reconciled with the sale of franchises whose value would lie in their exclusivity. The concept of 'competition across time' - the belief that franchise holders would be forced to act efficiently because their franchises come up for periodic renewal - is equally hard to sustain. Franchises, to be made attractive, would have to be sold for, say, 20 years, rather than two or three.

There is no sign that the MacGregor plan has generated much enthusiasm among potential investors or passengers. This gives Mr MacGregor an opportunity. He should postpone the privatisation Bill due early next year and look again at alternative models. In Sweden, for example, recent reforms have created a state-owned and subsidised track authority that private operators are encouraged to use. This is similar to the way in which Britain's roads are funded and used.

Mr Adley favours the creation of privatised regional companies similar to those that existed before nationalisation. They would both own track and operate services but be forced to permit open access. In the meantime, Mr MacGregor should encourage BR to seek further ways of involving private capital and attempt to do away with the Treasury's restrictions on leasing rolling stock. In any case, he should ensure that orders for new rolling stock are sufficient to sustain the viability of the industry.

The crucial thing for Mr MacGregor to bear in mind is that the main concern of passengers, many of whom are Conservative voters, is for a better and more reliable service. They are not interested in the realisation of ideology-driven experiments.