The New Year has begun with the announcement by Britain’s railway companies of average increases of 2.7 per cent in rail fares, affecting both season ticket-holders as well as those only making infrequent journeys. These hikes in fares have predictably led to the usual chorus of protests from the travelling public and provoked demonstrations at railway stations, where passengers and campaigners have been joined by rail workers. This comes as a further blow to already stressed train passengers, particularly those who have to commute regularly to their places of work, and provides a justification for the major overhaul of a system in which fares have continued to rise year-on-year at above-inflation rates, despite frequently late and overcrowded trains.
It is worth going back to the very beginning in order to better understand what is happening today. Britain’s once-great railway system was a major by-product of the Industrial Revolution. The world’s first regular passenger service from Canterbury to Whitstable in Kent, and the Liverpool and Manchester Railway, the first modern passenger railroad, both date back to 1830. Following these initial successes, unregulated and overzealous private enterprise, especially during periods of so-called railway ‘mania’, led to the development of a high-density railway network in Victorian Britain, which vastly increased the transportation by rail of both people and freight throughout the country. This unprecedented growth in rail transport was facilitated by the adoption of a standard gauge for rail tracks in 1844.
By 1923, the number of British railway companies had expanded to 123, close to the number today!. That year, these companies were merged to form the “Big Four”: the Great Western Railway, the London Midland and Scottish Railway, the London and North Eastern Railway, and the Southern Railway. These railways came under government control, for the duration of the war, in 1939. After the war ended, the Transport Act 1947 paved the way for nationalisation of the railways, which became effective on January 1 1948, when British Railways was formed from the pre-existing “Big Four” railway companies. Thereafter, a process of modernisation gradually transformed the rail landscape in Britain. Steam locomotives were replaced by diesel, and then electric, trains. Tracks were reconstructed, new signalling systems were developed, and a computerised freight service was introduced in 1975. High-Speed Trains, in the form of InterCity 125 services, commenced operation in 1976.
In the meantime, the British Railways Board saw the need to lower operating costs. This was achieved by closing a number of loss-making branch lines and depots, while improving inter-city services. The Reshaping of British Railways, a 1963 report by Richard Beeching, led to the eventual closure of a third of all passenger services and more than 4,000 of the 7,000 railway stations of the time in what was to be termed the “Beeching Axe”.
The privatisation of the railway network was backed by right-wing free-market think tanks, such as the Adam Smith Institute and the Centre for Policy Studies, in the late 1980s. British Rail, as it was then widely known, was seen to have become too expensive to run at it was, as well as being inefficient. Despite these beliefs, and the fact that a number of related functions and support services, such as hotels, sea ferries, catering and engineering had already been privatised, Margaret Thatcher remained reticent about privatising the railway network.
The ideologically-driven privatisation of British Rail, mentioned in the 1992 Conservative general election manifesto, was eventually implemented through the Railways Act 1993, under Prime Minister John Major. The operational structure created by privatisation came into effect on April 1 1994, and the process was completed by 1997. This was the last major privatisation to be undertaken by a Conservative government.
Privatisation proved to be a complex process, leading to substantial fragmentation of the rail network. The iconic British Rail brand, which had hitherto encouraged mixed emotions, was thereby effectively dismantled for good. Passenger traffic was divided up between 25 train-operating companies, while freight traffic was broken up into six freight-operating companies. These companies were then franchised to private sector providers, with individual contracts lasting for seven to ten years. The ownership of passenger locomotives passed to three rolling stock companies that leased out their stock to those train-operating companies that had been awarded contracts. A new state-owned company, Railtrack, was formed on April 1 1994 to own, manage and invest in the tracks and other railway infrastructure (land, stations, and signals). This company was privatised in 1996, but went into administration in October 2001, in the aftermath of a derailment caused by a cracked track at Hatfield, north of London, a year earlier. Railtrack’s business was then taken over by a new not-for-profit company, Network Rail, in 2002.
The administrative complexity of negotiating and monitoring contracts involving around a hundred different companies, including many European rail firms, has proved to be an expensive undertaking. Privatisation was meant to encourage competition between potential franchisees, thereby lowering fares and improving services through innovation and better management. With a few exceptions, such as Chiltern Railways, this has failed to happen. Of particular concern is the lack of clearly defined lines of responsibility for passenger safety. Not only are private franchisees being handed out generous government subsidies, but many have actually had to be bailed out by the government using public funds. This has further enraged many people, as these companies have often continued to pay out substantial dividends to policy holders despite underperforming and making losses. It doesn’t help that industrial disputes have further compromised performance at this time.
Given the many concerns with the privatised British rail network, it is not surprising that there is growing public support for renationalising the railways, with the examples of the French and Swiss national rail networks often being cited in support. Indeed, in 2018 the British government was forced to renationalise the InterCity East Coast franchise after the withdrawal of the existing franchisee-Virgin Trains East Coast. The franchise was taken over the Operator of Last Resort (OLR), which is part of the Department of Transport. Privatisation, however, is not incompatible with efficiency and profitability, as demonstrated by the example of Japan. A lot actually depends on the structure of the railway system in question and its operating framework. In Britain, the fragmented and chaotic railway system most certainly needs to be dismantled and simplified, possibly with subsequent reorganisation on a regional basis. A demonstrable commitment to improving what is after all an environmentally friendly form of transport should be a priority for British policy makers.
Ashis Banerjee (I try to avoid train travel whenever possible)