Railways in the UK, with one or two minor exceptions, were nationalised in 1947/48 by Clement Atlee’s Labour government and were privatised in a process that was started by Margaret Thatcher in 1994 and completed in 1997 by the John Major government. Because of the personalities involved in both nationalisation and privatisation, it will be clear that political ideology plays a part in the ownership of the railways so why is this question being raised again now?
As ever there is not one simple answer to this question although perhaps the main reason that it is being discussed at the moment is that the Labour Party and, especially, Jeremy Corbyn, are very keen to see the railways pass back into public ownership. There is some support for re-nationalisation from rail users because of a number of issues that have arisen over the past few years. The system in England, Scotland and Wales (NI Railways in Northern Ireland remains publicly owned) is currently operated by 18 franchises which pay the government for the right to operate certain routes – these franchises are known as train operating companies. The train operating companies are not responsible for the track and signalling infrastructure which is controlled by Network Rail – Network Rail is publicly owned.
Since privatisation, the number of rail journeys has increased from 735 million in 1994/95 to 1,7 billion in 2015/16 and the railways enjoy an 81% customer satisfaction rating although that figure is declining. Rail users are, however, not happy with a number of aspects of the rail companies operations which have seen issues with time-tabling, fares which have increased substantially and other operating difficulties although some of these have been caused by strikes especially in the Southern area.
To re-nationalise the railways would be an expensive and time-consuming process. Labour’s preferred option is to wait for the existing franchises to run out and then take lines into public ownership piecemeal although this could take up to ten years to achieve and would still leave the issue of the rolling stock. Most rolling stock – the trains/carriages/locomotives – is owned by separate companies which lease it to the train operating companies and this would give a situation where the government is having to lease rolling stock to operate its nationalised railways. Alternatively, the government could buy the rolling stock although this would be hugely expensive. The government does have a mechanism of taking franchises back into public ownership which happened in 2009 when National Express lost control of the East Coast Main Line and some people suggest that this mechanism could be used to bring all the franchises into state control more quickly however this would doubtless be contested in the courts and leave the government liable to large compensation claims.
Whichever method is put forward if the railways were re-nationalised it would be expensive and would not bring with it any guarantee of the cheaper fares that Jeremy Corbyn is promising nor of improved services – track, rolling stock, staffing, etc would be largely unchanged, certainly in the short term so does this clamour from Labour simply come from the ideology of the party leader as the start of a programme to re-nationalise other “public services”? Historically, however, state ownership led to inefficiencies and lack of investment in certain industries resulting in what was hoped to be a public profit from a public service turning into loses and subsidies from the government and a poorer service for users of that industry. Retaining the status quo does have issues although those of us old enough to remember nationalised railways have no great fondness for those days when trains were dirty, operated on out of date rolling stock and generally provided a considerably worse service than we enjoy today.