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Mick Lynch: Rail Privatisation Has Been 30 Years of Failure

The privatisation of British Rail began this month in 1993. It created a system that prioritises profit above the wellbeing of both workers and passengers — and it's time to bring it to an end, writes RMT general secretary Mick Lynch.

Credit: Chris Jongkind / Getty

On 5 November 1993, John Major’s right-wing Tory government passed the Railways Act. The Act moved ahead with what even Margaret Thatcher had considered a step too far: the privatisation of Britain’s railway. Since then, at least £31 billion has leaked out of the network and into the hands of the private sector, and we — the workers and passengers on Britain’s trains — are living with the dire consequences. 

In the preceding years Margaret Thatcher’s governments had already sold off public assets including energy, water, and buses, but even she believed that the railway was ‘a privatisation too far’. The public agreed. But after the Tories kicked her out like, in Dennis Skinner’s famous words, ‘a dog in the night’, the 1992 Conservative manifesto promised rail privatisation. And with an unexpected election victory on their hands, the Major government went ahead. 

The deregulation of the railways had been initiated by EU Directive 91/440 in 1991 which demanded, among other things, open access operations on EU railway routes by companies other than those that owned the rail infrastructure. The Railways Regulations 1992 was introduced in Britain under Section 2(2) of the European Communities Act 1972 to comply with the EU directive.

However, the passage of the 1993 Railways Act remained controversial, and there was plenty of lobbying against it. The Labour Party opposed it and promised to renationalise the railways when it got back into office. The Conservative chairman of the House of Commons Transport Committee Robert Adley even described the Bill as ‘a poll tax on wheels’, but he died suddenly before the Bill completed its passage through Parliament, and the process begun by the Act was completed by 1997.

The result of the Act was that rail operations were broken up and sold off, with various regulatory functions transferred to the newly created Office of the Rail Regulator. Ownership of rail infrastructure passed to Railtrack, while track maintenance and renewal assets were sold to 13 private companies across the network. Ownership of passenger trains passed to three rolling stock companies (ROSCOs), with the stock leased out to passenger train operating companies (TOCs), which were awarded contracts through a new system of rail franchising. In other words, it was a carve-up.

As a result of this carve-up, tens of billions of pounds have been siphoned out of the industry and into the pockets of the shareholders of the host of companies that feed off what should be a vital public service. A new report by my union, the RMT, Rail Privatisation: 30 Years of Waste and Rising Fares, shows that £1.5 billion or more leaks out of Britain’s railways every year in the form of profits extracted by train operating companies, rolling stock leasing companies, subcontractors, and other costs that arising from fragmentation. 

Of course, passengers have seen little of this money reinvested in the railway. Instead, for passengers, the fragmented system has meant rising costs, timetable chaos, endless different fares, cancellations, service reductions, attempts to cut staff from trains and stations and, most recently, the wildly unpopular and unsuccessful attempt to close all ticket offices in England.

For the travelling public, the cost of rail is now almost eight percent higher in real terms than it was in 1995, before privatisation. This figure has dropped in the last two years only as inflation as risen. Until the cost of living crisis, when fare increases were decoupled from RPI inflation, fares were consistently 15-20 percent higher in real terms than when the rail was publicly owned. There’s no decoupling this fact from rail privatisation: the annual outflow of funds during the years of privatisation could have enabled an average cut of 14 percent in fares — and if the railways were nationalised now, and the flow of funds into the private sector cut off, the money saved would fund a cut of 18 percent in fares.

Under privatisation, the rail system has become a cash cow for the cloud of parasitic private interests that swarm around it — and all passengers have gained is an increasingly expensive, fractured railway, run by people fixated with cutting staff costs. It’s no surprise, then, that public opinion polls consistently show overwhelming public support for the renationalisation of railways. The latest YouGov tracker shows 64 percent in favour of public ownership, and just 11 per cent opposed.

Thirty years have now passed since the Railways Act, and five years since the Williams Review, which was meant to examine the structure of the railway in its entirety. As each year without action passes, money continues to leak out of an incoherent privatised railway network. The current government has failed on rail reform and put into process the most draconian attack on trade union rights in a generation. Ministers have neglected their responsibilities and failed both passengers and railway workers. They continue to prioritise and fixate on bankrolling this profiteering model, which sees vast wealth drained away from a vital public service.

Alongside other groups, the RMT’s campaigning recently helped halt the government’s disastrous plans to close ticket offices en masse. Now, on the anniversary of this Act, the RMT has once again called for an end to the disastrous experiment privatisation has entailed and for the creation of a single, integrated, publicly owned railway company which would save money, cut fares, and encourage more people back onto Britain’s railways — using a public service not for private profit, but for public good.