Rail Fares

Marcus Jones Excerpts

Wednesday 5th September 2012 Commons Chamber

[Caroline Lucas]

I refer the hon. Gentleman to Deutsche Bahn, SNCF and several railways in Europe that run perfectly good public sector railways with much lower fares than ours. I am not necessarily saying that we should go back to British Rail; I am saying that we should learn from that experience. We might in future have much greater democratic control, with passengers involved in the decision making. Far more of running the railways might be delegated to regional level. We do not have to go back to something—we can go forward to something and learn from the best of what is happening in many European countries and in the rest of the world.

The proposal that “Rebuilding Rail” and others are considering is a more or less cost-free process, whereby when the franchises expire or companies fail to meet the criteria, they could be acquired on a case-by-case basis. New rolling stock could be directly procured, making the process far cheaper than the current leasing arrangements, and fair price regulation could be introduced to bring down the cost of leasing existing rolling stock from its private sector owners.

We also need to bring Network Rail’s debt back on to the Government’s balance sheet. I appreciate that the Government will blanche at the very thought, but doing that would reflect the reality of the situation and result in much lower interest payments.

According to calculations from “Rebuilding Rail”, reuniting the railways under public ownership could save more than £1 billion a year of taxpayers’ money. To put that figure in context, the money that we would have saved if rail had not been privatised could have been used to cut fares by up to 18%. The matter needs to be properly examined, and I am deeply upset that the Conservative ideological position means that the proposal is dismissed simply because it contains the words “nationalisation” or “public ownership.”

[Mr Marcus Jones (Nuneaton) (Con)]

I think I am following the hon. Lady’s logic. However, if the perfect answer for the general public is to renationalise the railway, why is there such a large petition about the west coast main line, which supports the continuation of a private company’s running that route?

[Caroline Lucas]

I imagine that that is because there was no properly public option on the ballot paper, as there was with the east coast main line, which was taken back into public ownership. Plenty of polls show massive support for bringing the railway back into public ownership. A majority of people want that. I suggest that the hon. Gentleman consider that.

In Europe, passenger rail services are much cheaper and services are better, and between 80% and 100% of train services are run by publicly owned companies. Those two facts are not unconnected. Despite what some opponents claim, there is no EU requirement for the railways to be privatised. Other European countries have accommodated EU legislation, while largely or entirely retaining public ownership of their railways, by ensuring that there is separation between the body that is responsible for passenger train operations and the subsidiary company that is responsible for capacity allocation and access charges.

The Government should know that there is a problem, since the McNulty review, commissioned by Labour but delivered to the coalition, clearly highlighted excessive costs in the UK rail industry. That report also showed that privatisation’s promise of innovation simply has not materialised. Both McNulty and the Transport Committee noted that, in fact, innovation has been actively discouraged by the disjointed and complex nature of the privatised railways.

Genuine, at-risk private investment, as opposed to private capital expenditure that is underwritten by the Government, makes an insignificant contribution to the railways, representing about 1% of investment. That is substantially less than the additional costs that arise from a privatised structure. Nor has efficiency improved in the hands of the private sector—despite often being cited as another major benefit of selling off public services. In fact, there has been an increased number of administrators and managers, as well as duplication of functions in different private companies, and staff who have to be employed to ensure that everyone talks to one another and knows what is going on. It has been estimated that the cost of those back-room staff has increased by 56% since privatisation, measured per train kilometre—money that would have been better spent keeping rail fares affordable and investing in real improvements.

Britain was once world famous for its trail-blazing and hugely successful railway, but today, privatisation is failing passengers, the economy and the environment. Unless it returns to public ownership, Britain will struggle on with a disjointed, complex and often dysfunctional railway system that regularly makes commuting a miserable experience and puts us to shame internationally.