Should the British government renationalise the railways?
With National Express being unable to keep up it's payments the government has decided to nationalise services on the East Coast. But isn't it time to do the same for all of the railways
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A lot of the railways are in public hands anyway
Writing in the Guardian last year, Christian Wolmar noted that Network Rail (the company responsible for main infrastructure of the railways) has a massive amount of government debt and gets a lot of public grants anyway and has no share holders. Effectively it is a state owned company in all but in name. Given that this is the case shouldn't it be time to do the same thing with all of the railways [[ Wolmar Christian "A good time to renationalise the railways" Guardian Online http://www.guardian.co.uk/commentisfree/2008/oct/13/transport-railtravel%5D%5D
Railways across the EU are moving towards privatisation despite the British example being less than stellar. The European Commission in particular is pushing for liberalisation of railways, and have even threatened to sue Britain for not liberalising fast enough in the freight market.[[Clayton Hirst, Brussels ready to sue uk over failure to liberalise rail freight, The Independent, 20th July 2003, http://www.independent.co.uk/news/business/news/brussels-ready-to-sue-uk-over-failure-to-liberalise-rail-freight-587418.html%5D%5D This moves along with EU standardising measures so that trains can run across the EU, allowing the previously nationalised rail companies to compete in each other’s markets. This slow liberalisation is leading towards privatisation across Europe, with Deutsche Bahn among the first to privatise by selling a 25% stake,[[German Rail Privatisation Agreed, BBC News, 30th May 2008, http://news.bbc.co.uk/1/hi/business/7427471.stm%5D%5D although this has recently run into the buffers due to the recession.
Increased chance of accidents
When the railways were taken into private ownership there was a number of high profile crashes amongst others that showed the problems. For example the Ladbroke Grove train crash which caused the deaths of 31 people including drivers and around 500 injuries was caused by a poorly trained driver of a regional train operating without Automatic Train Protection passing a red light or Signal Passed at Danger and smashing into an Intercity 125 . The crash was reported to be the result of a culture of cost cutting and casualness about safety that had become "endemic" only four years after privatisation had occurred. [[Alex Gordon "The privatisation and a series of rail crashes" Rail4all.org Accessed http://rail4all.org/content/privatisation-british-rail-and-series-rail-crashes 1.07.06]]
Crashes will always happen, there were crashes before privatisation such as at Clapham Junction and after railtrack was nationalised (became network rail) such as Potters Bar. The systems that control health and safety are not necessarily much different with a nationalised railway as a private railway. After network rail took over in the wake of the Hatfield crash they continued to use contractors to do the maintainance and it was only in the wake of the Potters Bar rail crash, when poor maintainance of the track was the sole cause of the crash[[ Potters Bar points ‘poorly maintained’, BBC news, 29th May 2003, http://news.bbc.co.uk/1/hi/england/beds/bucks/herts/2945582.stm%5D%5D that they reviewed this. The problem with Railtrack was not that it was private but that it was a private monopoly (without any sort of franchise system) there was therefore little incentive to spend money on maintaining the track when the trains would be forced to use the same lines anyway.
Who are the companies working for
Currently the railways are run for the private interest. Railtrack which has now thankfully been turned into a not for profit company made massive profits without delivering as much investment as they should have done into keeping the tracks safe. The same applies for the other companies made hay in delivering dividends while the sun shined but now we're going through rainy days. These companies aren't running for the public they're running for the purposes of shareholders. Small wonder why National Express decided to ditch East Coast services. It's shares are half of what they were at their highest this year. [[ "National Express Group PLC- Share Prices Accessed 3.07.09 http://www.nationalexpressgroup.com/nx1/investor/share_price/%5D%5D
Too expensive to take back
Taking the railways back would be far too costly for the taxpayer
Currently there are 18 different train operating companies (and that's counting the ones held by First as one group ) owned by a number of a operators. [[http://en.wikipedia.org/wiki/List_of_companies_operating_trains_in_the_United_Kingdom]].There are also a number of Open Access operators such as Grand Central Railway and Wrexham and Shropshire line coming into play so renationalising the railways could cause a lot of problems in terms of compensating companies and buying back railways.[[ Anon "Grand Northern Trains " Wikipedia.org.uk http://en.wikipedia.org/wiki/Grand_Northern_Trains%5D%5D. Also Taking National Rail back in to state hands caused a lengthy court battle cost the government and by extension the taxpayer around. Already National Express are threatening to go to court over any attempt to go for the other companies that it runs and a similar response would be made more likely than not by any of the other companies such as Arriva. [["Business East Cost rail to be state run"BBC News: http://news.bbc.co.uk/1/hi/business/8127851.stm%5D%5D.
A full nationalisation would be very expensive however it can be done bit by bit as franchises come to the end of the franchise period.
The main problem would then be that it would be the government that has to invest in the railways not the private sector, this could be done as is shown by railways in France. It would also not mean getting rid of open access to railways as this is mandated by the European Union, so the little railways that have been set up would not suffer.
Improvements in standards of service
The new Javelin or class 395 trains that rolled out of London St Pancras are a good example of why the investment works: efficient,comfortable high speed trains that have been paid for out of companies own pocket which will extend working a viable service that reduces journey times for customers. This is one of the benefits of privtisation[[http://www.southeasternrailway.co.uk/index.php/highspeed]] . Also some stations that would have not normally received attention have actually been extensively refurbished for example Warrington's three stations which dropped off in quality under British Rail ownership [[UK Youth Parliament "Renationalise the Railways- Page 2" http://www.ukypforums.org.uk/showthread.php?s=80ef6c31f6eac4288eff7be8d43609a3&t=166&page=2 Accessed 01.07.09]]. This is because private companies have more interest than public ones in maintaining standards of comfort. If they don't then people can use their own cars or the planes.
The new Javelin trains are only effective because the government helped pay for the high speed line on which the trains will travel. It is still up to the government to make the big investment decisions to create new railways because companies cant pay off building a new railway in the short time that they get from a franchise. As such there is very little new construction of railways, perhaps if the government nationalised the lot they would feel responsible enough to invest in the infrastructure!
More accountability under privatisation than nationalisation
Under privatisation there is currently more accountability than there would be under a re-nationalised system. Firstly under British law companies can get sued for criminal negligence or breaking safety rules amongst other offences and there has been cases under privatisation where companies and individuals concerned have been made to pay out. Take for example the Hatfield Rail Crash which resulted in the deaths of five people. Firstly Balfour Beatty which was responsible for the maintenance of the railways was fined £10 million although admittedly this was later reduced to 7.5 million. Railtrack which was later turned into what is now National Rail was fined 3.5 million. [[http://news.bbc.co.uk/1/hi/uk/5149732.stm]]. Both are significant fines and meant that there was at least some compensation for the people that died and were injured. Also people have been sent to prison for their own actions as demonstrated by when Mark Conolly and Roy Kennett were sent to prison for the manslaughter of four people in 2004. [[http://news.bbc.co.uk/1/hi/england/4816206.stm]] Under a renationalised system people wouldn't be as easily held to government
Also it isn't just criminal or civil prosecutions that companies have to be afraid of for. The Train Operating Companies can lose their franchises if they are found that they are not fulfilling their obligations under the terms of their agreements with the government's watch dog (the Strategic Rail Authority). This is something that has happened to companies in the past such as Connex which was responsible for running rail services in the South East losing it's franchise for poor financial management. [[http://news.bbc.co.uk/1/hi/england/3037816.stm]]. Under nationalisation the government didn't invest a lot in the areas despite pressure to do so.
What do you think?