Even British Rail was better

"Bring back British Rail" is becoming a common cry among beleaguered rail travellers. Given that it is now coming up to five years since the last BR train ran, it is easy to dismiss such notions as nostalgia taking over from common sense.

However, BR was better than the supporters of privatisation would have us believe and there is a strong case for arguing that much of the current chaos is down to the way the organisation was fragmented and sold off in great haste by the Tory government of John Major.

The prime motives for privatisation, it was claimed at the time, were to reduce the evergrowing subsidies, to increase competition and, although it was never said with much conviction, to improve the lot of the passenger. None of this was achieved. Indeed, comparing BR in detail with the current situation provides some surprising answers, most of which show privatisation in a poor light - the tragedy of it is that BR was probably working as well as it had ever done when it was broken up and sold off.

Punctuality

This will come as no surprise to long-term users of the rail network, but the performance of today's train operators is far worse than in BR days. The most vivid example is for InterCity services.

In 1993, BR's last year before it was broken up in preparation for the sell-off, the worst performing line was CrossCountry with just over 15 per cent of trains being delayed for 10 minutes or more. Now, figures for the six months to mid-October 2001 show the best former InterCity service is Anglia, with 23 per cent of services being delayed, and the worst, Virgin Cross Country, recorded a staggering 41 per cent of late trains.

Not all the delays are down to privatisation. For example, much of the recent deterioration is thought by industry insiders to be caused by the defensive driving techniques which have been advocated following the spate of accidents caused by trains passing red lights.

As one senior local manager put it: "If your job is at risk because you go past a red light by a few yards, then you tend to be overcautious and that costs time in the schedule."

However, even given this, the main cause of poor performance seems to be the inability of the various operators and Railtrack to work together effectively to reduce delays.

In a recent lecture given to the Railway Studies Association, Michael Holden, the highly regarded director of Railtrack's Southern Zone, gave a telling explanation. He said that as a result of the complexity of the regime of financial penalties for performance resulting from the split in BR into Railtrack and train operators, "many of the financial incentives across the industry are still misaligned or plain wrong".

Mr Holden has worked for months to try to resolve the problem, but failed. It seems that it is not financially worthwhile for the operators to cooperate with Railtrack. Instead, it is better for each side to do battle, trying to maximise their advantage from the financial penalty system, rather than, as under BR, simply ensuring that as many trains as possible run on time.

Nor have the new privatised operators done much to improve customer service. The last Inter-City survey of passengers found that in 1993, 98 per cent were satisfied with on-board staff, a figure that would not be matched anywhere today.

Subsidy

Here's the real surprise. Far from saving money, the most staggering failure of privatisation is that taxpayers are having to cough up unprecedented amounts of money for a service that is worse.

In the last full year of an integrated BR, 1993, the organisation received £1.35 billion from the government, to support both investment and uneconomic services - around £1.66billion in today's money. Over the next decade, about £35billion of government money was to be spent on the railways, around ? 3.5billion per year, more than double what was a high year historically for BR subsidies.

Network SouthEast, the BR company which used to run London's commuter services, actually broke even in 1988/9, at the height of the Lawson boom. After almost a decade of economic growth, the equivalent train operators will this year receive £200 million in subsidy. Similarly, InterCity used to make around £100 million per year, and now the same lines are subsidised to the tune of £200 million.

Safety

The spate of crashes which have done so much to undermine public confidence in the railways - Southall, Ladbroke Grove and Hatfield - and which will result in much unnecessary spending on safety measures can all be laid at the door of privatisation.

All three were caused by the way the industry was fragmented and safety considerations allowed to fall in the gaps between the new companies created in the railway diaspora.

At Southall, key factors included the botched reorganisation of a maintenance depot and the lack of co-ordination over the reporting of faults - the failed automatic warning system - between Railtrack and Great Western; at Ladbroke Grove, Railtrack's lack of proper procedures to deal with signals repeatedly passed at danger and inadequate driver training by Thames caused the accident; while Hatfield was a result of Railtrack's failure to maintain its assets and a breakdown in communication between itself and its contractor, Balfour Beatty.

Of course there were crashes under BR, but the organisation accepted responsibility and learnt from its mistakes, something which the privatised industry has found difficult to do.

Investment

On the face of it, investment is increasing rapidly. Railtrack, for example, spent £2.5 billion in 2000/1 compared with £740 million five years previously. But on the ground, there seems little to show for it.

The explanation is that under privatisation, investment is much more expensive.

Railtrack, and all its contractors, all need to make a profit and, moreover, compensation has to be paid to train operators for disruption while work on the line is carried out. In an analysis of large scale projects, Roger Ford, of industry journal Modern Railways, has calculated that it would take £2.5 billion now to provide the same sort of level of investment that would have cost £1 billion under BR.

Moreover, the investment is much less coherently targeted. Under BR, Chiltern Line was completely revamped under a scheme called Total Route Modernisation. It is now London's fastest growing line.

Had BR survived, other lines would have received the same overhaul. Schemes such as Liverpool Street's modernisation and Thameslink were realised much more quickly than equivalent big schemes today.

Moreover, we now have the ridiculous situation in the South-East where new trains cannot run on the network because the power supply is inadequate. This is a result of the fragmentation of BR which resulted in the planning process, that would have ensured that such investment would have been co-ordinated, being simply forgotten.

Industrial relations

This is one where, until recently, the privatised system seemed unequivocally better. BR suffered from regular major strikes, often leading to the whole system being halted. With 25 train operating companies, each negotiating separately with the unions, it is no longer possible for drivers or conductors to cause a total stoppage, although the signallers, who are all employed by Railtrack and did strike in 1996, still have that power.

However, the recent spate of strikes shows that the unions are beginning to realise they still have considerable muscle. Train operators, who run on very tight margins, have increasingly given way to their demands and, moreover, made a bad mistake in the first couple of years of privatisation by allowing generous redundancy deals. Now there is a shortage of drivers and their union has been able to bid up their wages by playing off the companies against each other. As the operators have done little to foster long-term good industrial relations, further trouble could be on the way. The driver situation has been made worse by the fact that operators have been unable to agree on a no-poaching agreement.

Certainly privatisation has delivered more trains, an increase of 20 per cent overall. This has been good news for people on well-used routes, such as St Pancras to Leicester and Waterloo to

Services

Southampton, which have seen marked rises, but according to timetable expert Barry Doe: "What you have is some corridors like these with 100 per cent increases added to the rest with no rise." Therefore, most travellers will have experienced little improvement.

In a way, these findings are skewed against BR. For example, BR would undoubtedly have increased services on some busy routes. As one old BR sweat put it: "The real comparison should not be between the situation now and BR back a decade ago when the privatisation process started and threw its managers into a state of gloom, but with what BR would have evolved into because of changes in technology and the sort of improvements it was making anyway."

He points out, for example, that parts of BR would have undoubtedly-been privatised by now: "They would not have put out the whole maintenance programme, as happened with such disastrous consequences, but they would certainly have done some market testing to ensure there was a comparison between the costs of inhouse and contracted-out work."

That sort of organic development of privatisation was put forward by the second Sir Bob Reid, BR's chairman during the privatisation process, but was rejected out of hand by Tory ministers intent on flogging off the whole network as fast as possible.

In fact, these findings which show BR in a good light are not that unexpected because of the way that privatisation was conceived and carried out. The problem, as I state in my recent book*, is that " privatisation was not carried out for the benefit of the railway and its users. It was undertaken for ideological and financial reasons".

So should we simply recreate British Rail? Interestingly, some commentators and railway insiders feel that this is the only longterm solution. They point to Holland where a recent experiment to break up the railways into separate components has recently been abandoned as it proved unworkable.

Roger Ford has proposed the recreation of regional railway companies with one organisation responsible for maintaining the track and running the trains. However he now reckons that "the shortage of suitable partners for such joint ventures makes the recreation of a single national railway increasingly attractive".

Of course, BR was not perfect and it was always constrained by a Treasury that was deeply suspicious of any spending on the railways and which, consequently, forced the organisation into lots of shortsighted cost-reduction measures like cutting ticket collection staff at many big stations. However, given events in the past five years since privatisation, there are precious few passengers who would not wish for BR's return compared with the current state of anarchy and chaos.

*The second edition of Christian Wolmar's book, Broken Rails, was published last month by Aurum Press, £9.99