It’s high time for us Conservatives to proclaim that the model of privatised train operators has delivered where nationalisation had failed. This is not difficult. The number of rail passengers has doubled since privatisation and the day to day running of trains now largely pays for itself. Compare this to British Rail, with its £2 billion taxpayer subsidy and trains which regularly broke down.
Those over the age of 45 remember this well. Those, like me, who have only ever purchased their annual season tickets from private operators need to be reminded that, whilst challenges exist, those operators deliver a service far superior than British Rail. Sure, operators may take £3 from every £100 spent on a season ticket. However, this profit margin is lower than 20 years ago and is the same as that found in the competitive supermarket industry. It is way lower than that levied by leading smartphone producer.
Consider the economy and the environment. The rail industry and its supply chain employs almost 250,000 people, adds over £10 billion to our GVA, helps reduce CO2 by 8.4 million tonnes per year and road congestion costs by £11.8 billion.
Look at how our rail industry compares with our EU neighbours. The European Commission found we have the safest railway in Europe after Ireland, passenger satisfaction ratings which are second only to Finland and operating costs which are lower than the EU average. To top it all, the UK has made the largest financial investment in its railways in recent years. These figures are impressive but, given that the utilisation of our railways is 60 per cent greater than the EU average, they form a persuasive argument that we in the UK are getting the most out of our railways. The Commission judges there are £11 billion of efficiency savings to be made across the railway networks of the other 27 member states, but zero for the UK.
As Conservatives, we should look to deliver even more value than this. UK passengers benefit from the lowest long-distance prices across Europe, but commuting costs are among the highest. Whilst proclaiming the rail success story, we need to produce policies which will bring price rises down. Arguing about whether we should use the usually-lower CPI rate of inflation instead of RPI, when operators pay supply chain and workforce on the latter, is still likely to cost passengers indirectly without reform.
What more can we do to improve performance and commuter prices? Let’s start with Network Rail. This nationalised part of the rail machine is responsible for most delays. This is not to be unfair to their management, but the sheer size of their task is immense. Thanks to this Conservative Government, some £40 billion will be spent on rebuilding tracks, stations and infrastructure over the next control period. This must all be delivered whilst record numbers of passengers continue to travel.
Why, however, do we need a nationalised entity to run rail stations which are now as much a destination for consumer retail and leisure as they are the start or end of a rail journey? We privatised airports and the passenger experience was enhanced. More people travel through London Bridge station than Heathrow airport, so the returns are promising. Symbolically, we could trial this by transferring Gatwick station to the airport operator. Money raised, or saved, could be given as a one-off cost reduction for rail passengers.
As for the management of existing track and signalling, we are now in a stick or twist moment. We would not expect supermarkets to control trolleys, stock and tills whilst a third party runs the shop floor and building. The operational deficiency of having two entities, one public and one private, run track and trains also lacks logic. Better to have the entity responsible for the customer take responsibility for all aspects of delivery. This should increase performance and reduce costs.The slimmed-down nationalised entity can then focus on delivering our new railways and encouraging open access so more than one private operator competes on the same line. Even then, we should do more to use the bait of our ambitious housebuilding programme to encourage the private sector to start reincarnating rail lines closed by Dr Beeching.
On labour costs, the rail industry remains one of the last bastions of union power – at a time when innovation means that new Thameslink trains can run through London without driver control and doors do not need to be operated by a second crew member. There should be no job losses. The rise of the digital railway, where the trains work out their optimal distancing rather than inefficient signal blocks, will allow us to increase capacity by 30 per cent on some lines without any new track being required. More trains mean more jobs but not every train has to be crewed as they were in the days when we needed a driver and fireman.
Privatising train operators has delivered on passenger numbers, safety, reliability, new rolling stock, air quality and taxpayer value for money. Lowering commuters’ fares will further put the Conservative Party on the side of the consumer. It will also identify Labour as being for the few and not the many: in cahoots with the unions whose strike threats have allowed their members to receive inflation-busting pay deals which have to be funded by the same passengers who are unlikely to be in receipt of anything so generous.
Whilst there is more to be done on bringing down fares, we Conservatives also need to be more confident in backing private ownership and innovation. To hear Conservatives doubting rail privatisation is a worrying sign. Why would the public bother backing us on Labour-lite policies when they can get the real thing? Instead, we need to get behind the private commerce which we helped create in the first place, put more of our railway in to private hands and further challenge and support industry to reduce prices. In essence, it puts the Conservative Party as champion of both commerce and consumer and demonstrates that the Labour Party is living in the past.
