by Edward Bennett
The Labour government announced on 25th May that South Western Railway (SWR) had been nationalised in what they described as a “new dawn for rail”. But if history is any guide, this is anything but a bright new beginning. Past experiences with nationalisation and government run projects tell a different tale: ballooning costs, chronic delays and worsening inefficiency. Rather than improving services, this move risks adding to Britain’s catastrophic national debt further entrenching the mismanagement and cronyism that plague our infrastructure.
First, let’s consider the history of Britain’s rail network. It was nationalised after the Second World War and later privatised, a move that effectively saved it. Since the 1990s, the performance of our railways has markedly improved. According to the Global Railways Review Britain’s rail network was the most improved in the EU since privatisation began. Passenger satisfaction rose by 83 per cent, and journeys more than doubled by 2019. This transformation stands in stark contrast to the dismal state of British Rail in the 20th century, a bloated, inefficient entity focused on political objectives rather than service delivery. Yet today, the failures of the past are forgotten, romanticised through rose-tinted glasses. The reality is that profit incentives, while often demonised, are what drove increased efficiency, capacity and innovation. The latest nationalisation drive, by contrast, risks dragging the system backwards.
This is already becoming evident under Heidi Alexander’s leadership of SWR. Her justification for nationalisation has been flimsy at best. The central argument for public control of cheaper fares has collapsed, with Alexander herself admitting she’d “ love to be able to do that”, but in truth, running the service already costs taxpayers through government subsidies provided to the operator. In other words, she’s failed on two fronts: first by failing to meet the expectations of taxpayers; and second, by further straining public finances through the takeover of an already heavily subsidised service.
For Britain, the creation and use of quangos for development of infrastructure is our vice that is squeezing the public sector to its breaking point. Trains are slow, and instead of increasing the speed and productivity of already existing networks, the already subsidised rail system’s modernisation will be impeded by rising costs of poorly managed infrastructure projects like HS2. This is seen in the 2023-24 report by the Infrastructure and Project Authority, revealing the increased cost of big spending projects that totaled £386 billion in 2019 to £834 billion within just 5 years. Many of these projects are run by bloated and subsidy hungry quangos. Are we to believe that it will be different this time with the newly created quango Great British Railways (GBR)? Taxpayers will rightly be concerned that the government has ploughed ahead with the creation of yet another quango which can supposedly fix our problems without first learning from any previous failures.
Is there a solution to this groundhog day approach? The first step would be ensuring accurate forecasts for projects so that they can be chosen responsibly. Also, the government should reward successful projects and hold those responsible for unsuccessful projects to account..This will put a stop to quangocrats jumping from failed project to failed project or leaving the civil service with handsome golden goodbyes. With these steps, the government would indicate that they have learnt from past mistakes while showing a reassuring step in the right direction to reduce cronyistic quangos.
Ultimately, government issues are systemic and slowing our trains down, but renationalisation is not the answer to taxpayer concerns. Competition and investment driven business evident in the success of East Coast Main Line (ECML) is. Research by the Adam Smith Institute has proven ECML to be 55 per cent cheaper than where single monopoly franchises operate. Therefore, the best value for taxpayers and passengers is open access for train companies that will create investment appeal for the rail service which they have achieved success in the past.