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Rail should be taken into public ownership and run for the public good

THE decision of the transport committee of MPs to investigate the latest East Coast Mainline (ECML) rail franchise fiasco should only receive a conditional welcome.

If the inquisitors intend to go no further than the usual platitudes about “learning the lessons,” “fixing a broken market,” “making bids more transparent” and “making sure nothing like this ever happens again,” they may as well write their report now and spare themselves any further effort.

We’ve heard all the excuses for the repeated failures of rail privatisation before. We’ve even heard them in relation to the ECML franchise itself — twice.

In 2006, the Labour government tore up the £1.3 billion contract with GNER, which had just beaten off other bidders including Virgin to retain the franchise.

One of the few pledges kept by the company had been to boost fares. Meanwhile, its parent, the US-owned but Bermuda-registered Sea Containers Ltd, was heading for bankruptcy.

In 2007, a fresh contract was handed to National Express, which ended up paying £1.4bn in the expectation of making huge profits from the lucrative London-Edinburgh line.

Commentators warned at the time that these hopes might be misplaced, especially when high fares and complex ticketing arrangements act as a disincentive for many “second-class” travellers.

Sure enough, within two years National Express handed back the keys and — like GNER — was allowed to escape the financial obligations embedded in its contract.

Then began a “golden age” for the ECML.

A public-sector train operating company was set up to run the service. So-called Directly Operated Railways (DOR) became one of Britain’s most efficient and popular railway enterprises, handing a surplus of £1bn to the Treasury over the following five years.

That was clearly unacceptable to the Tories and their coalition little helpers, the Lib Dems. If there’s money to be made out of a public service, they believed, it must go to their sponsors in the private sector.

With DOR banned from tendering and then disbanded, a new franchise was awarded to a partnership between SNP paymaster Brian Souter’s Stagecoach group and Virgin, the business empire run by one of the Tories’ favourite privateers, Richard Branson, from his own privatised island in the Caribbean.

Once more, there were warnings that their £3.3bn bid was unrealistically high. Sure enough, despite further hikes in ticket prices, the franchise has now hit the buffers.

Yet again, too, the railway pirates are being allowed to escape the contractual consequences of their greed, as Transport Secretary Chris Grayling desperately hunts around for a new franchise holder.
But the real problem is not that he is having difficulty finding an operator in the private sector.

It is that privatisation has turned Britain’s railway system into a complex, expensive, underinvested and inefficient mess.

On the ECML alone, seven other companies operate passenger services on parts of the line, together with four different freight companies.

Will the four Tories and the single SNP and DUP members of the transport committee reach the obvious conclusion, namely, that such a vital public service should be taken into public ownership and run for the public good?

That is Labour’s policy and another good reason to win a left-led Labour government as soon as possible.

It is also an excellent reason to ensure that such a government is not enmeshed in the EU Commission’s Fourth Railway Package, which seeks to create a “single European railway area” based largely on Britain’s fragmented and privatised model.

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