Labour’s emphasis on “renationalisation” is also misplacedby Christian Wolmar / December 8, 2016 / Leave a comment
The reality of Transport Secretary Chris Grayling’s announcement on Tuesday on the structure of the railways did not justify the headlines suggesting major reform.
Through selected briefing, Grayling cleverly managed to create the impression that the railways were in for the biggest shake-up since privatisation two decades ago. The implication was that this would include a big dose of further privatisation, which so angered the unions that they staged a mini-demonstration outside the Policy Exchange think tank where he gave his much-trailed speech on Tuesday night.
In fact, the changes proposed are pretty minor and, despite Grayling’s emphasis on putting the passenger at the heart of the railway, will have little impact on the commuters and other travellers who have been flocking to Britain’s railways in ever larger numbers. To be fair, Grayling has identified the key mistake of privatisation, which is that the railways was broken up into two main components, operations and infrastructure, a division that is responsible for most of the present-day problems with British rail travel.
When he was shadow minister for transport in the mid-2000s, Grayling floated the idea of re-creating an integrated railway, bringing together Railtrack (or Network Rail as it became after Railtrack’s collapse) and the train operators to form a sole railway entity.
His basic premise was right. This has been the traditional structure of nearly all railways across the world for the past 180 years. Railways function best as an integrated industry because the trains run on tracks that are controlled by signalling, so separation leads to a complex web of contractual arrangements which has proved expensive and inefficient.
The most obvious example of the divergent incentives this creates is that when Network Rail carries out maintenance and closes a line, the operators are compensated for the disruption, massively pushing up the cost of engineering works. This means that the operator is compensated for work carried out to improve its own services—which is patently ridiculous.
The separation was prompted for ideological reasons by Treasury officials in a forlorn and unsuccessful attempt to stimulate on-rail competition. But given the limited number of paths and the desire of passengers not to be restricted to certain trains (as happens in the bus industry outside London, where people…