Thomas the Tank Engine on rail renationalisation
As I sit on this warm and slightly sticky Great Western Railway train on my commute home, I wonder where the hell my £16 goes on today’s trip. As a relatively recent Australian migrant to the UK, running into the privatised and labyrinthine rail system here has been a confusing and honestly convoluted process. That’s on top of the cost (and I'm paying a lot less than others).
Before I left Australia I was given this piece of advice: If you want to compare prices here compared to back home, pretty much double it. When I tell my mates back home that I’m essentially spending $32 a day (thank god for railcards) to go to work and back they straight up don’t believe me.
They tell me it seems criminal to charge that much, especially considering how much I take home in pay. My equivalent commute (in terms of time/distance) to Sydney would cost $16. There are of course a number of different factors that contribute to the end user cost, but the price difference seems a little too much to take at face value.
While my home state’s publicly owned rail network is far from perfect, but the cost/benefit ratio of the UK’s privatised system really appears no better. That’s why John Stittle’s argument for renationalisation in The Conversation caught my eye.
John Major’s argument back in 1995 of “greater responsiveness to the customer, and a higher quality of service and better value for money” by virtue of being a private company is very much an argument we hear from neoliberal politicians even today.
It is often rehashed that large, state-funded services are a burden to the nation due to their expenditure. As the neoliberal theory of economic management goes, if you sell it off the government gets a nice cash injection, and you are no longer burdened by its expenditures, and the market will invariably provide the best, most efficient solution (who for?).
Stittle highlights that privatization has in fact had the reverse effect. On one hand, the franchising system in the UK translates into companies bidding on the amount they will pay the government based on the projected revenue they generate. Where does the revenue come from? Passenger fares. It’s like going to an auction and bidding with someone else’s money.
On the other, Stittle points to the fact that companies are given government subsidies to keep them afloat if their revenues fall below expectations. These subsidies have in fact doubled in real terms since privatisation, begging the question of why sell it in the first place?
These companies appear to be running at the expense of everyone but themselves, and if that’s the case, has it improved the quality of the service? I would ask anyone who has travelled on a Govia Thameslink train to vouch for that.
When discussing a transport privatisation proposal in Australia, Professor David Hayward of RMIT argued “the bottom line is that privatising natural monopolies will almost inevitably result in bad outcomes for consumers. The householder has little choice but to continue as a consumer of the monopoly service.”
Rail is the lifeblood of London, too many people use it for the city to function without it. Instead of a monopoly, we have an oligarchy of private companies that charge people more at the station, with another hand in the government purse; all with seemingly little public good coming from public transport.
At the end of the day, if the privatisation experiment has not delivered better user outcomes AND costs us more to run than what it did before we sold it, it makes economic sense to consider renationalisation of the rail system in some capacity.
Disclaimer: All views expressed on this site are my own and do not represent the opinions of any entity whatsoever with which I have been, am now, or will be affiliated.