Status anxiety

Rail nationalisation: Jeremy Corbyn’s stupid flagship policy

He’d have to stay in power for decades to carry it through – but the very idea is already causing damage

26 September 2015

8:00 AM

26 September 2015

8:00 AM

Amid all the excitement about David Cameron this week, I fear that Jeremy Corbyn’s first major policy announcement may have been overlooked. That would be a shamae because the policy is really, really bad. I’m talking about his proposal to ‘renationalise’ the railways.

Now, I have to confess to not really understanding this policy. Aren’t the railways in England, Scotland and Wales already owned by the state in the form of Network Rail? I know the Department for Transport lets franchises to private providers, such as FirstGroup and Virgin Group, but that doesn’t mean these private companies own the railways — the clue is in the word ‘let’. So how exactly will Corbyn ‘bring back into public ownership’ something that’s already owned by the public?

OK, that’s a minor detail, according to the leader of the Labour party. What he’ll do is wait for the existing leases to run their course and then, when the franchises come up for renewal, not rent them to private providers. Instead, they’ll be operated by a new, government provider — Corbyn Rail. Couple of problems with this.

First of all, only five of Great Britain’s 25 railway franchises are coming up for renewal between 2020 and 2025. If Corbyn is proposing to make the renationalisation of the railways the centrepiece of his first-term legislative programme, it’ll be a bit of a damp squib. By my estimation, he’d have to remain in power until 2036 in order to see this policy through, by which time he’d be 87. Who knows, perhaps he’s been inspired by Fidel Castro.


Second, there’s the small matter of the cost. Not only would the government have to invest many billions into the rail network, as the private providers currently do, but the Office of National Statistics would reclassify the entire stock of railway assets, forcing it back on to the public balance sheet. This would happen even if only a handful of the franchises were operated by the government. At a stroke, the annual deficit would increase by £10 billion or more. I know Corbyn’s shadow chancellor ‘Mad’ John McDonnell thinks it’s ‘barmy’ to eliminate the deficit, but even so.

Perhaps that’s why New Labour made no attempt during its 13 years in office to dismantle the system put in place by John Major’s government. Another reason — just guessing — is that the present system actually works. I don’t want to bore you with statistics, but the numbers speak for themselves. If you compare the figures for 2012/13 with those for 1994, the year in which the new system was put in place, investment in the railways has tripled, from £1.7 billion to £5.1 billion. There are now twice as many rail journeys as there were 21 years ago and rail freight has increased by 60 per cent. Indeed, since the Railways Act was passed, we have the most improved railways in the EU.

Francophile left-wingers often compare Britain’s rail network unfavourably with that of France, but I suspect they’re basing that on how comfortable the TGV is that takes them from the Gare du Nord to Avignon, where they disembark and drive to their second homes. In fact, British trains are more punctual than French trains, have a better safety record and are top of the European league table in customer satisfaction.

Passengers complain about rising fares, but the private providers aren’t allowed to make profits of more than 3 or 4 per cent. What guarantee is there that Corbyn Rail wouldn’t raise fares by more, particularly if the public finances are in disarray? Anyone who travels regularly by train will know how ridiculously crowded they can get, particularly at peak times. That suggests fares are too low, not too high.

No, we currently have the best rail network in Europe and any attempt to ‘renationalise’ it would be a disastrously retrograde step.

You might think that none of this matters. After all, the chances of Corbyn becoming our next prime minister are fairly slim. But his abandonment of the cross-party consensus in this area will inevitably create a climate of uncertainty, deterring private companies from bidding for the franchises and discouraging the present operators from investing in the network. He’s also indicated that Labour would attempt to ‘renationalise’ academies and free schools, which will create similar levels of anxiety in the education sector.

If Corbyn continues in this vein, his leadership victory won’t just be a disaster for the Labour party. It will be a disaster for the whole country.

Got something to add? Join the discussion and comment below.

Toby Young is associate editor of The Spectator.

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Show comments
  • Standish79

    Corbyn has already made it quite clear that he and his team are not interested in boring detail such as whether policies actually work or are a good idea. It’s worthless posturing to his core vote, only a certain proportion of whom are likely to use trains anyway!

    • Ian Beale Steeplecoque

      Those of us who use trains know he is right.

      • KingEric

        I use the trains to commute 5 days a week and I think Corbyn has got it all wrong. I remember how out of date and useless the nationalised days were and never want to see them return. They were truly terrible.

        • pobjoy

          They were not terrible when there were Labour Governments.

          • KingEric

            That’s not my memory at all. They were equally bad whichever party was in government. There might have been more strikes when the tories were in but other than that, indestinguishable.

          • pobjoy

            When Thatcher got in, services began to decline. Under Labour, week-end travel was fine, even quite late on a Sunday evening. There was over-crowding, and the rolling stock deteriorated. So, by the time came for privatisation, any sort of investment was welcomed. But investment has not been anything like enough. There is no acceptable reason for refusing to restore the railway to its natural utility. Those who impede will not be forgiven.

  • Ken

    “Fares are too low, not too high”…. Try telling that to commuters paying the highest fares in Europe – being milked by train companies. Low fares are available out of peak times and fine for leisure travellers but London commuters pay up to £5K a year for the privilege of standing all the way from Reading or Woking to London. And that on trains in some cases 40 years old, some of the oldest still running in western Europe. I don’t think we can now go back on privatisation – and some of the companies are doing a good job – but it doesn’t mean the present arrangements are perfect. The great mistake was separating track from trains – it would have been better to bring the old pre-war companies in some form. Sadly for Corbyn, Network Rail, a state concern, has proved costly and incompetent – the Great Western electrification is costing 4X as much as that for the East Coast main line in the 80s, and that for a far shorter route…..

    • Clive

      The great mistake was separating track from trains

      EU directive. For which reason it’s hard to see how Corbyn could achieve nationalisation inside the EU.

      https://en.wikipedia.org/wiki/First_Railway_Directive
      The aims of the directive are to create a more efficient rail network by creating greater competition. To achieve this aim member states are required to ensure that organisations operating the infrastructure (track, signalling etc.), and those operating services (trains) are separate and run on a commercial basis.[note 4]Additionally railway companies from all member states are allowed to run services on any other member states rail infrastructure, both for passenger transport and goods. The free competition provided by the mandate is optional for regional and urban passenger trains.

    • Ian Beale Steeplecoque

      Bristol to London last week at 7.30 am returning at 5.30 PM £212 standards class. £1 per mile.

    • Mary Ann

      Most European railways are more heavily subsidised than British railways.

  • Jeremy Putyn

    Its an insane policy most of his teenage supporters have never seen or travelled on the old BR -what a nightmare it was. All the Tories need to do is renegotiate new longer franchises early and he won’t ever be able to do it. Why not renationalise BT we can all wait 3 months for a phone line again then or the banks and wait again 6 months for a mortgage – in fact why not nationalise everything……..

    • Ian Beale Steeplecoque

      BR was infinitely better than today? I gave up using trains daily in 2002 as they got so bad. I look back fondly on the relatively good system we had as recently as 1990. I could then do Bristol to Paddington in 88 minutes, now it takes 108 minutes, 25 years later, progress eh?

      • peter_dtm

        Having been out of the UK from 1982 to 1999; I was amazed on my return to discover that I actually had to arrive at the station on time; to catch a train.
        My fond memories/nightmares of Manchester Picadilly to Euston; getting on the train at 10past 10 and remembering to check if it was the 09:10 service; as my day return ticket would be invalid if it was. Basically you got to the station (Picadilly) an hour late; and arrived in Euston 2 hours late.
        I supose at rush hour being on a service that was an hour late didn’t make that much diference – unless it was the 1st train of the day; but it did play havoc with the non peak hours ticketing

      • Mary Ann

        Are, but now they have to compensate everyone if they run late, make the running time longer and it becomes a lot easier to run on time. It’s certainly what they did on South West Trains.

  • Clive

    Depends on how ruthless Jeremy Corbyn wants to be – and so far he looks quite ruthless in pursuit of his policy goals.

    He can nationalise the franchises with compensation or even without, he does not have to wait for them to be up for negotiation. Of course it might lead to legal problems but with a majority in Parliament, they can be overriden in the UK.

    Not in the EU where he would be up against the ‘First Railway Directive’ which actually sounds just like the USSR. He is too late to find a derogation, I believe – although he might try to negotiate some kind of opt-out. It will depend on what the atmosphere in the EU and attitude to Britain is like after Britain’s referendum.

    This is just one of many ways that Jeremy Corbyn wants to extend public sector employment. That is the real cancer in his strategy.

    He is not, as frequently suggested, just in favour of more public services. He wants more public sector employment. That is because it gives the government direct control over the unionisation of employees which he wants.

    It also has a more sinister purpose in giving the state power over the lives of many more individuals. They would at best be clients of the state – as in Greece – and at worst tools for state actions – as in totalitarian regimes.

    • njt55

      Great post, Clive, especially the second half of it.

    • ohforheavensake

      In what bizarre version of reality does nationalising the railways lead to totalitarianism?

      • Caractacus

        Part of the tube is going on a 48 hour strike based on the vote of just 3 employees. That’s totalitarianism.

        • Noa

          Erm, totalitarianism would be arresting the strikers and shooting the ringleaders to ensure the trains run on time. Come to think of it that would also be communism.
          Whereas liberal democracy is complaining about the strike to your disinterested MP; which is also modern conservatism.

          • pobjoy

            Come to think of it that would also be communism.

            If you did a teensy bit of thinking, Noa, you would shut up.

            Unless you are lying, in which case, nothing in the world can stop you.

        • Ian Beale Steeplecoque

          The railways have been run into the ground by idiot dogma.

        • Mary Ann

          Only if you believe the Wail’s account, according to the union they had 100% support. Somebody is telling an untruth.

          • KingEric

            100% support….for anything? What la-la land do you live in?

      • Ian Beale Steeplecoque

        France , Spain, Italy, have state railways. All cheap, quick and not crowded.

        • 1h45h

          “Cheap” out of pocket perhaps, but don’t forget to count what you pay in taxes.

          • pobjoy

            If what you pay in taxes has a return (which is the theory of subsidy), there’s no reason for concern. ‘Cheap’ it is.

          • 1h45h

            Problem is you’re not allowed to make the judgement if the return is fair or not because you’re forced to pay taxes. The decision is made for you.

          • pobjoy

            But we’re allowed to vote. We are allowed to vote against our own best interests.

          • 1h45h

            Voting doesn’t give you full choice if you happen to be in the minority.

          • pobjoy

            I very much agree. But life is not perfect.

          • 1h45h

            Agree.

      • Clive

        Famously, the excuse for fascism in Italy was that ‘Mussolini made the trains run on time’. It was actually a myth as this piece explains http://www.independent.co.uk/voices/rear-window-making-italy-work-did-mussolini-really-get-the-trains-running-on-time-1367688.html

        …but it’s an important myth because as the piece says:
        …The notion that the trains were running on time was none the less vigorously put about by the Fascist propaganda machine. ‘Official press agents and official philosophers . . . explained to the world that the running of trains was the symbol of the restoration of law and order,’ wrote Seldes. It helped that foreign correspondents in Rome were very carefully controlled and that the reporting of all railway accidents or delays was banned…

        There is a fine line between beneficent government control and the exercise of power at a detailed level.

  • ohforheavensake

    Toby- you do know that a) railway networks in the rest of the world are frequently owned by the state: and b) that this policy is extremely popular?

  • Noa

    It’s a national tragedy that the debate has been carefully framed in the context of re-nationalising the railways in the tired cliches of marxism versus capitalism, rather than re-unifying the railway system from the extortionately subsidised, de-nationalised mess that the Conservative governments of Margaret Thatcher and John Major created.

    • LoveMeIamALiberal

      Major, not Thatcher. Maggie rejected plans for rail privatisation because she thought them impractical. This fact causes much embarrassment to Tories and lefties alike.

      • Mary Ann

        Never thought I would agree with Thatcher.

  • Caractacus

    I 100% disagree with nationalising the railways…but this:

    That suggests fares are too low, not too high.

    and this

    we currently have the best rail network in Europe and any attempt to ‘renationalise’ it would be a disastrously retrograde step.

    Are patent nonsense.

    • CouchSlob

      > That suggests fares are too low, not too high.

      It really is laughably ignorant nonsense. Toby appears to not understand that train is the only practical way these crowded commuters can actually get to work. I can only imagine he was out of ideas and bumping up the word count.

  • paul

    Toby Young you are The Stupid One this policy is backed by 75% of the UK Public because they are fed up of the privatised Rail Companies ripping them off and renationalisation does work as highlighted by the very successful East Coast Railway which thrived under Public Ownership until it was recently sold off to the vultures in the Private Sector.

    • Ian Beale Steeplecoque

      Nationalise the Utilities too. Rip off merchants to a man.

  • Sten vs Bren

    “Anyone who travels regularly by train will know how ridiculously crowded they can get, particularly at peak times. That suggests fares are too low”

    No, that suggests that there is insufficient capacity, you nutter. Hopeless!

    • Ian Beale Steeplecoque

      Correct . Toby seems to insist on revealing how I’ll informed he is. Everything has tripled since 1994. In fact house prices and petrol have quadrupled. Investment in rail has trebled, government subsidy had doubled, fares have quintupled, delays have sextupled, overcrowding is beyond belief .
      The Rail system is a disaster. Under BR it was poor, now it is unfit for purpose.

      • aspeckofboggart

        On his return from short study program, my nephew thought it’s probably the only mass transit system where commuters regularly faint and the trains get so stuffy while commuters wait for evacuation.

  • Bonkim

    Bonkers

  • Random Punter

    Will we get the old compartment carriages back? Hang the rest of this railway nonsense, I want them back.

    On a more serious note, it has to be said that this is one place where Corbyn actually has some sense… although his means of doing it are somewhat suspect. The fact is that either we return to the pre-war days of having private companies actually responsible for maintaining their own locomotives and track or we do something to change from the current model of letting companies have a share of the profit for painting the locomotives a different livery.

    • Sue Smith

      Speaking of your username –

      Why not bring back horses? Less harmful to the global environment and much quieter. Speeding, price of fuel and hoons doing burnouts no longer an issue. People would find more work available; vets, blacksmithing, cleaning the streets, grooming and feeding horses. The pace of life would be better. I’m sure Corbyn will eventually seize the idea and claim it as his own.

      You know it makes sense.

  • grimm

    The main problem with Britain’s railways IS the very high cost of traveling on them.

    Toby Young manages to make a remarkably stupid observation in this piece:
    “Anyone who travels regularly by train will know how ridiculously crowded
    they can get, particularly at peak times. That suggests fares are too
    low, not too high.”

    No, no , no! It does not suggest that at all. Any rail commuter will tell you that they are not taking advantage of low cost travel – quite the opposite. The cause of the overcrowding “particularly at peak times” is that they have no other choice.

    • peter_dtm

      well actually they do have other choices

      Drive

      Taxi

      Cycle

      Walk

      Bus/tram/tube

      Some of those options may require you to move.

      BUT I hear you say I can’t afford to buy a house in London (walk/cycle).

      But I hear you say it takes too long to Drive (and it costs too much to own a car).

      But I hear you say it takes too long and is too expensive to use a Taxi (and it takes to long because the roads are overcrowded; even worse then the railways).

      But I hear you say the buses don’t go anywhere near where I want them to; and anyway they are expensive for what they are; and they are overcrowded; horribly overcrowded; even worse than the trains.

      Therefore the railway is the CHEAPEST option (in time and cost); therefore its fares ARE low. That’s basic market economy; charge more – less demand; less overcrowding; charge too much and the trains are empty (that is why you have PEAK hour travel costs).

      And the overcrowding is a problem not of the railways making; but of the number of people living on this little island; agrevated by most people starting work at the same time. I understand train density is at maximum safe levels; and longer trains leave people without platforms to entrain/detrain. So Network Rail (a state ‘owned’ company) should just build longer platforms ? So either you rob the tax payer to pay for that; or put the fares up. Not to mention the cost of painting all those new coaches bought by the train OWNING companies in pretty colours (note the train franchisees lease their train sets from the train OWNING companies).

      The franchisees are limited to 4% profit — most companies in the engineering industry I work in won’t get out of bed for less than 40% margin; why would any sane person invest in a business that only returns 4% ? And since the industry I work in affects every manufactured good; you are paying for that margin every time you buy something from a wharehouse or factory; every time you use water; every time you turn on the gas or electricity. Strange I never hear people complaining about the cost of factories (well apart from accountants trying to get equipment in for cheap).

      Any road comuter travelling at peak times will tell you they have no other choice; except those lucky few who live in walking/cycling distance of work. The cause of the overcrowding of the roads “particularly at peak times” is that they have no other choice.

  • Sue Smith

    All this nonsense only goes to show the kind of policies you get when you enfranchise 16 year olds! The human brain isn’t fully developed until the early-mid 20’s so why would you give voting rights to teenagers who’ve only recently voted for the school captain? Corbyn’s existence is living proof of the stupidity of the teenage vote.

    I’ll bet it was the Labor party which brought in voting for 16-18 year olds, knowing they would surely support infantile policies.

    And, please, don’t use the old chestnut of “old enough to fight” because you have to be 21 to buy liquor in the USA and they sure have 18 y/o on the ‘front’!!

  • Pacificweather

    Toby Young thinks private providers have Invested “many billions in the network”. Too lazy even to pull an investment report from the web. Why does the Spectator pay this man to write this trash? Is writing trash now its USP?

    • pobjoy

      Is writing trash now its USP?

      Come on, the Telegraph competes.

      • Pacificweather

        I stand corrected. Its a NUSP these days.

        • pobjoy

          🙂

  • pobjoy

    the present system actually works

    Oddly, six out of ten disagree.

    Anyone who travels regularly by train will know how ridiculously crowded they can get, particularly at peak times.

    And there’s the reason. Under-investment in rolling stock. Stealing, Toby. You pay for a seat, Toby. Or is capitalism an economic system that treats humans like livestock? Still?

    Privatisation has failed, because ‘risk-takers’ won’t take risks.

  • boultonzz .

    I am not for one second a left/Labour/Corbyn man. Indeed I am a UKIP/Tory man.
    However, living in the SE of England the trains are not fit for purpose. Regularly late, always overcrowded, impossible to get a refund and you can expect without fail in January the price will go up. Indeed on my lines, Southeastern and City Thameslink, we have the lowest customer satisfaction bar one or two in the country.
    Now I agree, that immigration has played its part in over crowding services, but the train companies, despite record investment, or so they tell us, are still the same rigidity 8 carriages they’ve always been, sometimes you get the delight of four carriages – where is the investment? It has been this way for at least 15 years.
    I believe the franchises haven’t worked, especially when compared to other nations. I believe this, renationalising the trains and rent controls are something the right should adopt. I appreciate these are not free market directives, but when it comes to something so important as a roof over your head and transport, the Govt should play a vital role in regulating/ controlling, as I don’t think the free market can be trusted. Evidence, the banks, car companies, drug companies, and I sure the list goes on and on of market manipulation.

  • davidshort10

    I presume TY has travelled on every railway in Europe for him to justify the claim that ‘we have the best rail network in Europe’. People would say we had the best television in the world as if they’d spent evenings across the globe glued to a set. The rail system is absolute crap here, which is why there are 30 million cars on the road. Try travelling by rail at the weekend. You’ll likely end up on a bus. Only an idiot would try to travel long-distance on a train on a Sunday. Andrew Neil once did, by his own admission, so you can see the truth of my contention. Last Easter I flew from London to Newcastle and back to spend Easter Sunday with some of my family. This would have been impossible by train (bus – engineering, you know) and silly by car. And it was cheaper than the train (bus).

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