For rail passengers using London’s Waterloo station, the country’s busiest, the next three weeks promise to be frustrating. A major programme to increase capacity, including extending platforms, will mean a big reduction in services. Rail users have been advised to work at home or take a holiday. Nor is Waterloo, although perhaps the most dramatic example, alone in this.
In the coming weeks rail passengers using Euston, London Bridge and Charing Cross will also experience periods of closure or disruption. Trains from London Paddington to Wales face what the rail firm GWR describes as amended and extended journey times — and replacement buses — because of upgrade work. Elsewhere, August is the default time for rail engineering work and disruption.
Upgrades and essential engineering work are part and parcel of any railway system. But they add to the impression that the railways are not working as well as they should be. Govia Thameslink Railway, operator of the Southern franchise, has just been fined £13.4m by the Department for Transport for poor performance that the government-commissioned Gibb report said went beyond the strike action that the company is experiencing.
Chris Grayling, the transport secretary, provoked anger last month by scrapping plans for the electrification of the line between Cardiff and Swansea and the Midland mainline. Transpennine electrification, once seen as essential for the success of the northern powerhouse, has been paused and may remain so. In the 20 years since privatisation, passenger numbers have doubled, although the annual taxpayer subsidy to the industry, just under £5bn, has also soared and is double the level of the mid-1980s in real terms.
To the public, meanwhile, rail privatisation is not seen as a success. Our own detailed work on train punctuality, based on tougher, minute-by-minute standards than the train operating companies apply, shows that 36% of trains run late, compared with the officially admitted figure of 10%, and that five train operators run more late trains than punctual ones.
Advertisement
It is small wonder, perhaps, that renationalising the railways proved to be one of Jeremy Corbyn’s more popular policies in June’s general election. YouGov polling shows 60% support for renationalisation. Voters who do not remember the damage wrought by Labour’s left-wing economic policies in the 1970s have a limited recollection, if any, of the miseries of British Rail.
Nor does it end there. Centrica, the parent company of British Gas, has just announced a 12.5% increase in electricity prices, despite its chief executive Iain Conn admitting that the firm’s wholesale costs have fallen since 2014. He blamed “transmission and distribution of electricity to the home and government policy costs”. As with the railways, a majority supports renationalisation of energy. Privatisation, a great British success story, has acquired a bad name.
Some of this, in the case of the railways, reflects the choice of the wrong privatisation model. The division of the railways into track and stations (now back in public ownership as Network Rail), train operating companies and owners of the rolling stock was unnecessarily complex and created tensions from the start.
The model can and should be reformed. Fully integrated regional train companies, such as those that existed before the Attlee government nationalised the railways, offer a more logical model than the current separation. The balance between the level of subsidy and rail fares may also need to be rethought. A rail industry that survives only on high levels of subsidy is not the best advertisement for the private sector.
For the railways, and for energy companies, regulation is also central. There is at least some truth in Centrica’s claim that customers are paying for the costs imposed by government, just as the rail companies are suffering from operating in what the Institute of Economic Affairs has described as a “public-private hybrid”.
Advertisement
This does not mean, by any stretch, that renationalisation is the answer. The greater the freedoms under which private firms operate and the more limited the degree of political interference, the more the scope for both weaning the railways off public support and improving customer service.
As passengers deal with this month’s disruption, that is the real lesson from the railways.