Renationalise the railways? That’s the last thing we need

State-owned East Coast train pulling into London King’s Cross. Matt Buck, CC BY-SA

So the mountain has rumbled and given forth its usual platitudinous mouse. Labour leader Ed Miliband’s pronouncements confirmed longstanding speculation that his party has plans for rail. In particular, it proposes to allow partly nationalised and not-for-profit companies to bid for train service franchises in a move that could see swathes of the industry renationalised or with high levels of “not for profit type operations.

So much for the idea that there are not many votes to be gained from railway issues. Health, energy, education all get a relentless high-profile airing while railways have not often been on most politicians’ radars (except for those in the firing line on HS2). The upheavals of the 1990s, when the railways were chaotically and expensively privatised, coinciding with reform measures flowing from Europe and an unfortunate series of accidents, were the last high watermark for mainstream political interest.

The problems with renationalisation

This may now start to change, but there are many reasons to be wary of what is being proposed. For one thing, there are numerous issues that would arise if the public sector extends its rail interests beyond East Coast trains and Network Rail.

It would be vital that publicly operated railways did not have an automatic right to bid for franchises, but competed on merit with other bidders. The model of East Coast trains is not a panacea for replication. It has some serious quality limitations. Its performance is patchy but far from diabolical on the punctuality and cancellation measures used in the industry, but this doesn’t capture the reality of the service.

As a regular train passenger on East Coast and other franchises, I believe that since the days of GNER the product presentation has grown much worse, the trains are over-crowded and the staff sound and behave in a much more authoritarian manner than before. This is a service with more problems than are generally acknowledged.

If Labour’s proposal for allowing such publicly owned operators to bid for any franchise was to be embraced, there would be potential transparency issues over the terms of support any public operator bid may receive, as well as the evaluation process (which is already too complex, time-consuming and badly managed – recall the West Coast rail franchise fiasco of 2012). We would also need to ensure that service and product proposals were not biased and did not limit real innovation or credible product-development initiatives.

Another current Labour idea is to give infrastructure operator Network Rail the responsibility for buying trains. This doesn’t sound like a good idea. They are already involved with certifying them, for one thing. And are they really experts on new vehicle design and product development? No. The franchise operators need to be able to deploy the trains their market positioning and research suggests is needed and not have ill-conceived projects foisted on them by some rivet counter in the DfT.

Don’t throw out the baby…

At the same time, deterring the private franchise operators from bidding is a real risk. A mass exodus of the private operators risks leaving the railways facing another decade of chaos and complex governance border wars. Certainly the current franchise model is not perfect but in the face of massively increased passenger numbers, something must be working. The figures continue to outperform those of the period when rail was not challenged by near-universal car ownership, coach and air competition.

Returning to a British Rail Mk2 may appeal to hardcore Labour supporters and the rail unions but could easily see the return of the inward-looking approach that so sadly constrained rail in the past. Wholesale renationalisation would come at a huge cost of compensation and another bout of endless confusion as this position was re-established.

Any criticism of the current system needs to be realistic about what can be achieved. Rapid growth in passenger traffic and apparent claims on network capacity to accommodate more passenger and freight traffic appear to make it difficult for the government to improve the system without indulging in major infrastructure schemes. The economic vandalism of major route closures in the 1960s and 1970s is likely to come back and haunt governments of any hue, while any new replacement route capacity enhancements (not necessarily all high speed) will not come cheap.

Shoot the messenger

Neither is Labour in the greatest of positions to criticise. It can take the blame for both the ill-conceived programme to build Intercity Express trains to replace the current HST/InterCity 125s, and the confused mess that is HS2 (watch the costs escalate and project ambition fall despite all the weasel words about economic growth, inter-connectivity and re-balancing the economy).

Once the future: InterCity 125s are on the way out. Stephanie Gadsby, CC BY-SA

Labour has also failed to back the coalition government’s announcement of a whole series of investment schemes in rail, such as the plans to create a "northern hub” between the likes of Manchester, Liverpool and Leeds; and create an “electric spine” between Southampton and Yorkshire. This is despite the fact that they promise benefits such as new more attractive and cost-effective services, widespread electrification and passengers switching to rail on merit.

On the whole, Labour’s proposals sound suspiciously like a re-run of their previous attempt to reform the railways in the UK. Labour spent a fortune fiddling endlessly with the governance of the industry and failed to implement any real and lasting measures to unpick what they describe as the “botched privatisation”.

Sensible opposition

Instead, the leadership ought to look at what is happening in freight rail. Its operators are competing without direct subsidy, which has upped their game and kept the dead hands of central government bureaucracy at bay. Admittedly there is still a lot more to be done in terms of consistent and attractive passenger product and service delivery, presentation, pricing and reliability and seemless links to other modes of transport including taxis and car and bike hire. But Labour needs to pay attention to what is being achieved in some franchise areas and also in Europe rather than focusing on more major strategic lurches.

Beyond that, Labour could do worse than setting some ambitious targets on shifting users from other types of transport (such as those in the EU White Paper of 2011). Keeping Network Rail up to scratch with cost-effective (as opposed to gold-plated) infrastructure improvements, maintenance and new-line development could find favour with the Treasury. It would also be useful if there were some further major-gauge enhancements to allow bigger freight trains to operate between the UK and Europe. This would underpin economic growth and secure major environmental, commercial and energy benefits.

There is a real need to stop loading capital investment in the London/M25 ring. The rest of the country could do with more of the investment cake. Metro, tram and light-rail schemes in a significant number of cities could ease traffic congestion, re-invigorate city and town centres and create new jobs in a way that buses cannot. It would also reduce the transport sector’s continuing over-dependence on oil-based fuels.

And if Labour really wanted to impress, it could admit “we backed the wrong horse” on HS2. Much more cost-effective options (eg HSUK) have been developed yielding the capacity, speed, interconnectivity and environmental benefits. Yet Labour, like the other major parties, are solidly and mindlessly supporting the project in a lemming-like belief that it is the only credible option. In reality it is being endlessly revisited and repackaged as a panacea solution to the claimed constraints on rail’s future performance and capabilities. For the £50bn (and rising) price tag, the entire UK railway system could be electrified, lines re-instated and modernised.