Tony Lodge is a Research Fellow at the Centre for Policy Studies and Vice Chairman of the Conservative Transport Group. He is author of Rail’s Second Chance –putting competition back on track, published this year by the CPS.
Twenty years ago this autumn, the legislation to deliver rail privatisation cleared Parliament. The curtain was brought down on 45 years of the nationalised railway network which had operated since the late 1940s, firstly as British Railways and latterly British Rail. Rail privatisation pitched Tory free market ideology against Labour’s then (and now re-heated) support for state control, but the debate descended into acrimony and political point scoring as the Major Government endured its torrid 1992-97 term.
The 20 years since rail privatisation have often been chaotic, sometimes tragic, certainly expensive and never free from fierce debate. The Southall crash of 1997 was closely followed by the rail accidents at Hatfield and Potters Bar in the early 2000s. These events, particularly Hatfield, helped expose the failure of Railtrack, which had inherited poor quality infrastructure from British Rail.
Critics of privatisation regularly highlight the failures of the past but the policy, which had a difficult start, is fundamentally correct, and with the right tweaks and political support it can now better deliver for the passenger, the industry and the country; but critics appear blinkered to the clear successes that have been delivered.
At the time of privatisation, the railway was expected to fall into decline, having a long history of underinvestment and stop-and-start annual budgets. Since then, we have seen a doubling of passenger journeys to the highest level since the 1920s; 4000 more services a day than in the mid 1990s; a 60 per cent increase in competitive rail freight and the fastest growth of all European railways. The UK railway now carries nearly 20 per cent of the EU’s passenger journeys with record levels of safety. Importantly, the rail subsidy for England and Wales is falling; it fell from £4 billion in 2009-10 to £3.2 billion in 2011-12 and continues to fall.
There has been competition between private companies as they bid to operate franchises, but perhaps one of the most fascinating developments is the emergence of real on-track long distance rail competition between the Government-sponsored franchised companies and private rail operators – though still on far too small a scale. North East and Yorkshire passengers are unique in that they are particularly benefitting from this development as two ‘open access’ rail operators, Grand Central and Hull Trains, connect the county with London and compete with the main line franchise holder, East Coast.
Statistics show that this competition has delivered lower fares, higher revenue, more routes, better station facilities, as well as happier (and more) passengers. Importantly all the companies involved, including East Coast, are benefiting from this new railway landscape. as they seek to strive to win more passengers and deliver better services. This is even resulting in significant private sector improvements in some station facilities which had been allowed to significantly decline. Sadly, though, the Department for Transport continues to refuse to acknowledge the beneficial impact of competition, despite the evidence. A misguided belief still exists in some parts of the Department that competition is not in the interests of taxpayers. Conservatives rightly acknowledged this in Opposition in 2008.
A perhaps unlikely location for this crucible of evidence based rail competition is the West Yorkshire city of Wakefield – a Labour stronghold and represented in the Commons by the new Shadow Transport Secretary, Mary Creagh. The city’s past importance is reflected in it having two large railways stations at Westgate and Kirkgate. While the importance of Kirkgate, completed in 1854, declined in the 1970s, its neighbour at Westgate enjoyed investment and, importantly, served the busy Leeds to London Intercity main line services. Kirkgate’s last and very slow London train departed in 1978; it then suffered semi-abandonment and long term decline, without staff or investment.
It has fallen to private rail operator Grand Central, in its plans, to compete with franchised London trains out of Westgate to help restore Kirkgate to its former glory. Though a listed building, it was the former Labour Transport Secretary, Lord Adonis, who declared the station the “worst in Britain” when visiting four years ago.
Grand Central services have been using Kirkgate since 2010, and thus providing Wakefield passengers with choice ,but the state of that station was understandably deterring would-be passengers even though passenger growth has still been significant. The station had also become a magnet for crime and vandalism. But when the largely privately funded £4.6 million redevelopment of the station is complete next year, it will undoubtedly rival Westgate – which is coincidentally being rebuilt, though with public money.
Importantly, Wakefield’s rail competition has delivered some interesting benefits; Grand Central Kirkgate services compete on journey times with the franchise and their ‘on the day’ and internet fares are cheaper. The company uses previously ignored ‘freight only’ routes to reach the East Coast Main Line; this innovative approach also allows Grand Central to serve new towns and cities and connect them directly with London, such as Halifax and Mirfield where London-bound passengers had to previously change trains.
John MacGregor, the former Conservative Transport Secretary,set out the initial ambitions of rail privatisation in 1992,
“Our objective is to improve the quality of railway services by creating many new opportunities for private sector involvement. This will mean more competition, greater efficiency and a wider choice of services more closely tailored to what customers want”.
Today, arguably 20 years late, the ambitions in the Minister’s quote are upheld in real evidence from places like Wakefield; rail competition is finally delivering for passengers – but on too small a scale, and must now be more widely applied. Other Government-sponsored rail franchises should face competition from open access services in the way that East Coast faces competition at Wakefield and elsewhere. The benefits are clear.
Conservatives can take credit for this slow but popular evolution of competition on the railways and must encourage more as new franchises are awarded. They can effectively oppose Labour’s call for the renationalisation of rail services by supporting more competition of the kind we see successfully working in Yorkshire, even though it is still largely in Labour seats where the results are being most enjoyed.