Today’s announcement that East Coast Main Line is being handed back to private train companies is the clearest indication you could find that this government’s policy on the railways is determined by its own ideological zeal for privatisation at all costs. And nothing else.
As we reported before, East Coast has been a success story under public ownership. A dramatic contrast from the two previous privatisation disasters on the same line.
Today’s decision shows a flagrant disregard for anything that deviates from the fundamentalist notion of ‘private good, public bad’. There is no rational reason why East Coast should not be retained as a successful in-house model, at the very least as a public sector comparator for the rest of the privatised network (if not as an actual model for further in-sourcing of failed franchises).
As Frances O’Grady, General Secretary of the TUC puts it:
The government is showing that it has an ideological zeal for privatisation for its own sake with no interest in alternative models or any form of evidence-based analysis of what works best for the rail industry, passengers or taxpayers
So, instead of a succesful railway earning money for the taxpayer to be reinvestd in the service, we will now see yet another “thinly capitalised company with few assets and relatively little ability to bear downside risk” (as the Office of Rail Regulation likes to refer to Train Operating Companies) run the service, while hoovering up public subsidy and paying almost every penny of what little operating profit it accumulates to its owning company in the form of shareholder dividends. Don’t expect new investment to go far beyond the advertising budget and change of paint on the side of the trains.
Maria Eagle, shadow transport minister has put it pretty well, so we’ll finish with her:
With the Government’s rail franchising programme in chaos, it is a bizarre and dogmatic decision to prioritise the privatisation of a service that is actually on track. Since running services on a not for private profit basis, the East Coast operator has returned £640million to the taxpayer and invested more than £40million in improvements to the service, achieving some of the best results for passengers since records began.