The State must step in to save our railways

THE paradox of modern business is that the more powerful and global it becomes, the more vulnerable it is to what people think. Andersen the auditors lost its reputation the moment it was seen to have shredded Enron documents, and is now collapsing before our eyes. Railtrack lost all hope of salvaging its reputation when the Paddington crash was followed a year later by the disaster at Hatfield.

Now, just as nothing can save Andersen from meltdown, the only remedy for Britain's railways after Potters Bar is a full blooded return to nationalisation of Railtrack. The Government has got to step in and sort out the mess.

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Given that railways find it hard to cope with leaves on the line, it may seem an odd cure for their ills to coat the tracks with politicians, an even more slippery substance. But there is a logic to it. People want to know who is in charge. They want to know the money will be there, and management will have the power to get things fixed. They want to be sure too, if anything else goes wrong, that they will know where to find the culprits. For all these reasons all fingers point to Parliament and Whitehall. From here on they want the buck to stop at the Dispatch Box.

It is not logical, but people are not logical where safety is concerned. Privatisation is seen - wrongly in my view - as putting profit before safety. That is unfair given that the greatest rail disasters of the past 20 years - at Clapham, Hither Green, Lewisham - killed many more people than those of the past three years and happened on the watch of the State-owned British Rail. The State is every bit as prone to safety lapses and cover-ups, as investigations down the years into the leaks at the nuclear plant at Sellafield amply demonstrate.

But all that is beside the point. People believe privatisation is to blame. There is now no confidence left in a rail network which remains in any way in private hands. Voters and commuters have had enough. They want the politicians involved.

IT need not be a hopeless cause because so much of the rail privatisation was - and continues to be - a sham and would benefit from being made transparent. People talk about the profits the train operating companies make and the profit that Railtrack made before it had the plug pulled.

Those profits are a myth. All this money came from the Government. Every year each train operator receives tens of millions of pounds from the Treasury to help it with the cost of its services. These subsidies for the train operating companies have far exceeded the losses the old British Rail was allowed to make, and have allowed Railtrack to charge the operators far more for track access than they could afford to pay from their own resources. Virtually all Railtrack's income and profit is taxpayers' money at one remove, filtered through the train operators to disguise the fact. That was why the Government appointed regulator Tom Winsor was so absurd fining Railtrack all the time for failing to hit his targets. He of all people should have known where the money was coming from.

Transport Secretary Stephen Byers proposes that Railtrack's track and signalling assets should henceforth be run by a company limited by guarantee. That sounded good in this topsy turvy world because it implied no more profit. But it will not solve any problems and will add a few more. The proposed board is far too cumbersome and riddled with special-interest groups who will all argue for their pet projects.

The Rail Regulator, the health and safety executive and the Strategic Rail Authority will still second guess every decision and be second guessed in turn by Stephen Byers or whoever inherits his job. The management will spend so much time looking over its shoulder it won't look where it's going.

Most telling of all, at least half the money for investment is will have to come from the City. Now it would be wrong to say that no banker would lend Byers a used cigarette coupon, because, as the Tube financing has shown, the money can be raised, but because he is seen to be untrustworthy and inept it only comes at a very high price, one which gets higher with each disaster.

It would be much cheaper for the Government to raise the money the railways need by itself - and it would be much easier for us the voters to see what was really being spent. If Tony Blair went for it now, whatever else he fails to do, he could at least say in 10 years' time that he fixed the railways. It would be one achievement to be proud of.

That money could also be made to go further. Though everyone claims private sector companies are more efficient, this has not proved the case with the rail infrastructure - though the train operators are a different matter.

Studies since privatisation have shown that every £100 of investment in the British Rail days delivered almost three times as much improvement as £ 100 invested today. No one is quite sure why, but it has a lot to do with the reliance on contractors and subcontractors. The money which is supposed to go on track improvements gets dissipated in contract squabbles over who did or who did not do what, as seems to be happening following the tragedy at Potters Bar.

The final case for nationalisation is simply that it makes sense. No one driving along the M4 or the M1 says those State-owned arteries should be privatised so shareholders can make a profit from the tolls. They are State built, State owned and State maintained and no one seriously questions it. So why inflict such a structure on the railways?

SIMILARLY, no other country in the world with a decent rail network sees its maintenance and safety as anything other than a job for government. We only privatised for doctrinal and political reasons, not because it made business sense, and whatever one's doctrinal belief there has to come a point where it is admitted that privatisation was the wrong medicine for the railways' ills. But it is a decision which has to be taken now. If three horrible crashes are not proof of that failure, how much more can the Government need?

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