Bob Crow sees only one solution for the troubled railways of Great Britain

Rail privatisation is costing Britain a fortune. For this and many other reasons, bringing the rail network back into the public sector is the only sane option for a modern, environment-friendly transport system.

In the run-up to the general election RMT marchers took that message out into towns and cities in every corner of Great Britain.

A national mobile demonstration under the banner “Rail Against Privatisation” started in Glasgow on April 16, culminating in London two weeks later with a major march and rally just five days before the UK election.

The aim was to put public ownership back on the political agenda. At rallies, meetings and demonstrations on and off the route, marchers asked parliamentary candidates if they agreed with the three quarters of voters who want an end to the privatisation nightmare.

Privatisation has been a major disaster for Britain’s railways. The network has been fragmented and services have deteriorated, yet the private train companies continue to receive billions of pounds in subsidy and to bank billions in profits.

A study by the Catalyst think-tank underlined the campaign by revealing that privatisation has cost taxpayers more than GB£6 billion, “leaked” from the industry by the private sector. According to the report, bringing rail back into the public sector would bring immediate cash savings of GB£500million per year.

The report also showed that the majority of Britain’s passenger railways could be brought back in-house at no cost by 2013.

Spiralling costs

The basic fault-line remains fragmentation. But even as the government ducked that central issue and talked instead about bringing costs under control, the profits of Britain’s train operators soared by 20 per cent last year to nearly £300 million.

The biggest of them, National Express, notched up a staggering increase of 76 per cent in its railway operating profits, from £33.2 million in 2003 to £58.5 million last year, and handed its shareholders an 18 per cent dividend increase.

The three rolling-stock companies – the effective cartel that leases trains to the operators at rates that would make the cosa nostra blush – have extracted £2 billion in profits between them since the ‘96 sell-off.

This is good news for the Royal Bank of Scotland, whose wholly owned subsidiary Angel Trains contributed £86.3 million to the bank’s profits in 2003 – at a return of nearly 32 per cent.

And it is good news for the record-busting HSBC bank, whose train-leasing subsidiary contributed £75.3 million in 2003 (at 30 per cent) to its parent’s superprofits. This parasitic coupon-clipping is rampant on our railways at a time when ancient slam-door rolling stock is still in use, yet train-makers are laying off thousands of skilled workers for want of work.

The crazy thing is that the Labour government has delivered increases in rail spending, but the failure to reverse privatisation has meant spiralling costs and the continued leakage of public money out of the industry.

Deteriorating services

Rail investment is three times as expensive in real terms as it was in the days of British Rail and the private-sector operators receive more subsidies, yet provide worse services than BR’s. The drive for profit means that safety is under constant pressure. All of the eight British rail workers killed last year were working on sites controlled by private-sector contractors, and today the RMT is resisting constant attempts by private operators to undermine the safety role of train guards.

Yet rather than reverse the damage, the failure of the great railway rip-off has been repeated on the London Underground, where the fragmentation and privatisation of infrastructure has resulted in worse services and safety standards.

In March the government’s transport select committee endorsed RMT’s view that Tube privatisation was an expensive scheme for putting guaranteed, risk-free profits of GB£2 million a week into shareholders’ pockets.

With the contracts set to last 30 years, this means the privateers are on target to reap GB£3 billion in profits with no guarantees that the Tube network will be any better at the end of it.

The reality is that there is a huge rail rebate to be had from bringing rail operations back into the public sector, a point already being proved by South Eastern Trains, the one franchise back in public hands, albeit under the threat of re-privatisation.

South Eastern has made quarter-on-quarter improvements in punctuality, ahead of its private-sector comparators, and needs £1 million a month less subsidy than its fat-cat predecessor – despite restoring the staff levels slashed by Connex. That success should become the model for bringing all rail franchises back into the public sector – but instead the government plans to re-privatise it.

Leaving things as they are will mean private-sector costs spiralling further out of control and a bleak future of service cuts, job losses, fare rises and ever-growing congestion and pollution on Britain’s roads.

Public ownership of rail is not simply the best option – it is the only sane option.

Bob Crow is the general secretary of the RMT union, based in London, UK.

If you have an opinion you would like to contribute to TI on the issue of the nationalisation or privatisation of railways, please contact parris_kay@itf.org.uk