Who weeps for the railways?: As the strike drags on people are deserting rail travel. They will probably never return, laments Christian Wolmar

THE RAILWAYS are in dire straits and no one, apart from a few railway managers, seems to care. The signal workers' dispute is making passengers leave the network in droves and many will never return. The secret meeting on Tuesday night instigated by Bob Horton, the chairman of Railtrack, with Jimmy Knapp, the signal workers' leader, is a reflection of the desperation felt by Mr Horton's senior staff at the plight of the railways.

While Railtrack's chairman seems powerless to bring about an end to the dispute in the face of intransigence from both the unions and the Government, the losses to the railways are mounting. After 22 strike days, they have lost more than pounds 150m, 5 per cent of annual turnover. Almost all of this money would otherwise have been invested in much-needed improvements to the railway and the track.

More worrying still, the losses are increasing, despite the fact that with each strike day a higher proportion of the network is open. The most recent figures show that over the week that included the recent bank holiday and a 48-hour strike spread over three days, BR's takings were down by 24 per cent compared with last year. Given that fares are around 5 per cent higher, the figures suggest that BR is losing almost a third of its passengers in some weeks. Moreover, anyone travelling on the network on non-strike days will have noticed that there are fewer passengers on the railway.

On the East Coast Main Line, for instance, BR's most modern long-distance route, trains from London to Edinburgh have started running on strike days for the first time in the past two weeks. Yet the line is still losing more passengers each week. A spokesman explains: 'In June, we were only losing about 12 per cent of our revenue, as people were adjusting their travel plans. Now in some weeks the percentage is in the mid-20s.' He reckons that people are just becoming fed up with the railway: 'It is doubtful if many of these passengers will ever come back.'

Other parts of the railway have suffered similar losses. Even the Great Western InterCity services out of Paddington, which have managed to run an almost complete service, are losing pounds 250,000 - half their normal daily revenue - every strike day.

Most people have taken to the road, using either their own cars or sharing with colleagues and relatives. Business travellers have discovered that since the late Eighties air traffic delays have been sharply reduced and internal flights offer a much improved service. Many leisure passengers have discovered that buses now offer videos and a trolley service. Railways find themselves in a more competitive market and have been found wanting. British Midland reports that since the strike began, on its Leeds/ Bradford-Heathrow route, passenger numbers are up 30 per cent and on Teeside-Heathrow 24 per cent up, compared with last year. And the increase has been throughout the week, not only on strike days. Less surprisingly, National Express reports a sharp increase in passenger numbers on strike days.

Yet the scale and implications of the catastrophe for the railways has attracted little attention. British Rail's chief executive, John Welsby, suggests this is a result of the railways' diminished role in society: 'Twenty, or even 10 years ago the economy was much more dependent on the railways. Now it can cope without them, and the extent to which it has been doing that, particularly outside London and the major conurbations, worries me. There's been no enormous outcry about the strike because it's our business only that's been damaged, not the economy. Most people are concerned with their own problems and don't shout about other people's'

This year, the railways are being presented with their best opportunity this century to boost their freight business. The Channel tunnel began to carry freight in May and BR had hoped to be sending 6 million tonnes through it by the end of 1995, three times the amount carried on the existing rail freight boat train. BR has had to delay the expansion of the service because of the strikes, which have dented confidence in the service. As Mr Welsby put it, 'I am going round trying to convince car manufacturers that they should use rail. And they say to me, 'We hear what you are saying, but we would like to see the service run smoothly for a while before we commit ourselves.' '

He is also worried that three-quarters of BR's long-term freight contracts are up for renewal in the next nine months: the strikes are not exactly enhancing rail's prospects of keeping them.

There seems to be no way to break the strike deadlock. As one Railtrack manager put it, 'Where is the next move coming from?'

The Government seems content to let the dispute rumble on for two reasons. First, ministers see any trade union dispute as bad for Labour - although there is considerable evidence to suggest that they have misread the political runes and that the public blames them, rather than the unions or the Labour Party, for the dispute. Second, the strike has become the crucial test of public-sector pay restraint, a policy that is expected to continue for at least another year.

The RMT, in the hands of a left-leaning executive, superficially has little to lose by prolonging the strike, because it disrupts the Government's rail privatisation plans. Jimmy Knapp and other senior RMT officials are desperate for negotiations, but Mr Knapp is unable to break free of the shackles imposed by his executive.

The privatisation plans, which have already caused two years of upheaval, may well have to be postponed. But this would be a Pyrrhic victory for Mr Knapp if the industrial action led to a long-term decline in passenger numbers. Even before preparations for privatisation, the network had endured several years of structural reorganisation. But before the dispute there was still considerable optimism among senior railway staff, who felt there was a lot of potential for the business to grow.

Now morale is at an all-time low. As John Ellis, production director of Railtrack, put it, 'the industry is in mourning.' All there is to show for nearly a decade of reorganisations is a dispute that harks back to the past, when trade unions fought management with the Government interfering from the sidelines. It may be the last such battle: the fragmentation of the railways into a network of 100 companies will, in future, weaken the trade unions' potential for network-wide disruption.

After years of introspection caused by the reorganisations and the battle over privatisation, what rail most needed now was a period of promotion, to sell its case to a public that had already begun to lose faith. The dispute has killed off any hope of such a campaign. Instead, the railways will start from a lower base, having to try to convince those who have left the network to return. Paraxodically, before the strike, passenger numbers were just beginning to show a recovery after last year's fall of 4 per cent. The environmental arguments for investing in the railways will be forgotten as railway's opponents stress that the system absorbs around pounds 1.2bn of public funds annually for precious little return. Thus, the anti-rail lobby, which includes several cabinet ministers, will have been strengthened by the dispute and may well be able to ensure that the network is starved of funds over the next few years.

We will have an indication soon enough about the political ramifications of the dispute. The new Transport Secretary, Brian Mawhinney, has so far been careful to avoid being labelled - as transport secretaries invariably are - as either a 'roads' man or a 'rail' man. The expenditure figures that list the sums earmarked for roads and rail in the November spending plans will show which side he stands on, but British Rail sees few grounds for optimism.

Mr Welsby reckons that it will take two years for the railways to return to the level of passengers they were carrying before the strike. Such a heavy loss in the medium term means rail will be struggling for several years just to regain its share of the market. It might please Mr Knapp in messing up privatisation, but in the wider context of British transport policy it is a tragedy.

(Photographs omitted)