Leading article: Put the trains back on the rails

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The Independent Online
IT IS now plain that the way the Tories privatised Britain's rail network was scandalous. They conducted a financial exercise: the scheme had minimal regard for the interests of rail passengers and maximal concern for quick profits. Here was short-termism of the very worst kind. Evidence for the charge comes from the National Audit Office. Its figures for the profits garnered by train and franchise buyers who just happened to be in the right place at the right time to take advantage of Tory largesse almost beggar belief. To make a 220-fold gain on the back of public assets has nothing to do with enterprise or imagination. The only market involved was one in assiduity in how best to rip the state off. Rail privatisation, we now can see, was a kind of legalised theft. The scale of windfall gains occludes the moral climate and diminishes the capacity of the state in other contexts to pursue income-tax evaders and social security fraudsters.

And evidence also comes from the markets, from the extraordinary spectacle of the directors of a company - Great Western - standing to make millions after having provided the public with mediocre or downright unreliable service. Meanwhile the Health and Safety Executive has got as far as preparing prosecutions against Railtrack which - simultaneously and with tender regard for the public's well-being - announces it intends cutting the amount it spends on repairs and maintenance by pounds 80m a year. We learnt, months ago, that the Transport Secretary, Gavin Strang, is a cipher. This ball is in the court of the deputy prime minister, John Prescott, and the salient question is not that he should act - he must, if only to reassure the travelling public that they are not going to be either gouged or killed - but how.

There is nothing wrong with the principle of private ownership of infrastructure, provided a regulatory regime is in place to control fares and ensure safety and reliable service. What the Tories bequeathed New Labour was not just a financial catastrophe but regulatory confusion. Why are there separate regulators for track and passenger franchises? Rail regulation ought to be unified, expert, omniscient and passionately devoted to the development of rail transport. Instead it is fragmented, amateur and all too prone to have the wool pulled over its eyes.

Having blocked the sale of Great Western, Mr Prescott must now lean on John Swift, the track regulator and John O'Brien, the man responsible for the passenger franchises. They have to sharpen up. How could FirstGroup, or anyone else, have been allowed to pay a price for Great Western which is inflated by its failure to perform according to contract? The regulator surely must revalue the company at its performance price - a damn sight lower. And the new franchisee has to be told in no uncertain terms that fines and public obloquy will fall swift and fast if service does not improve.

Mr Prescott has two further tasks, one backward-looking and one developmental. The National Audit Office has laid a heavy set of charges at the door both of the Tory Transport Secretary Sir George Young and his officials, none of whom even dreamt of blowing a whistle in the hearing of the Comptroller and Auditor-General. We have, in Britain, a no-fault culture in Whitehall, but can Mr Prescott afford not to ask some searching questions about his civil servants' handling of rail privatisation? As for Sir George Young, if the Public Accounts Committee does not subject him to the fiercest interrogation it will be failing in its duty. The least the Blair government can do is order an immediate moratorium on all those Foreign Office sponsored trips by gurus (and former civil servants) to eastern Europe preaching to them on how to privatise.

But for the future, Mr Prescott has a railway to run and a network to expand. There are alternative regimes for track and passenger service which could ensure more investment and better performance. His saddest inheritance from the Tories is a culture of under-performance among the franchisees and the arrogant way certain companies ignore complaints and, still, prefer excess profit to providing the public with fast and safe trains.