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The Weekly paper of the New Communist Party of Britain

On the Rails

by New Worker correspondent

ON MONDAY the Government’s Department for Transport’s (DfT) boss Grant Shapps denounced the present rail franchising system, saying: “The model of privatisation adopted 25 years ago has seen significant rises in passenger numbers, but this pandemic has proven that it is no longer working.” Something that was clear 24 years ago and was made only even more blindingly obvious months ago.

He said a “simpler and more effective structure” is to be introduced but details are vague about what the plans are. But nationalisation was clearly ruled out when he said that the “new deal” will “keep the best elements of the private sector, including competition and investment, that have helped to drive growth – but deliver strategic direction, leadership and accountability”.

Under a continuation of present emergency measures (for up to 18 months) to use public money to subsidise private owners, the DfT will continue to waive Train Operating Companies’ (TOC) revenue, cost and contingent capital risk, and will pay a fixed management fee with the potential for an additional performance-based fee based on measures including punctuality, passenger satisfaction and financial performance, according to the Railway Gazette. In plain English, the taxpayer still foots the bill. The DfT claimed its fees would be lower than before and depend on performance delivery, but we have heard that before. Train Operating Companies have to be really dire before they lose contracts.

Although the rail companies made some grumbles about the announcement, none actually threatened to walk away from the contracts as if they were a bad deal for the private companies. The TOC’s cartel, the Rail Delivery Group, said: “We welcome the ongoing support to keep trains running for passengers and the government’s confirmation of an end to the franchise system, which we have long been calling for.”

Huw Merriman, the Tory Chair of the Commons Transport Committee, cautiously said: “In the absence of any detailed reforms, today’s announcement means we are simply replacing one set of interim contracts with another set of interim contracts. The government now needs to set down some detail about what it intends to do next.”

On the other hand, Tan Dhesi, Labour’s Shadow Rail Minister, welcomed “the government admitting privatisation hasn’t worked and bringing in greater public sector involvement in managing the railways’, and added a call for full public ownership, saying the new present rules merely “paper over the cracks of a broken rail system”.

robust line

The RMT transport union took a more robust line, demanding that the Government “cut out the middleman and bring all UK rail franchises into public ownership once and for all”, saying the management contract model used for London Overground services would mean “profits and dividends will continue to flow out of UK railways into the pockets of train operating companies and shareholders”.

Mick Cash, RMT General Secretary, added: “The government must now ditch its obsession with the free market and call to a halt any attempts to reanimate the corpse of rail privatisation. COVID-19 has proved that the private rail companies are a waste of time and a waste of money and have no place in a railway that’s fit for the future. It’s time to cut out the middleman and the priority now has to be protecting services and the staff who run them and not private profits.”

Unite the union also called for nationalisation, with its national officer for rail Harish Patel saying: “Franchising has been broken beyond repair for years but the COVID-19 pandemic has finally forced the government to accept the inevitable.”

Transport Salaried Staff Association (TSSA) General Secretary Manuel Cortes said: “The government is once again kicking into the long grass what to do with our railways and instead of grasping the nettle is opting for transitional measures which prop up the status quo. The system was broken well before coronavirus arrived, but the pandemic has completely exposed its many weaknesses.

“Heads or tails the privateers always win. There have been payments to private rail company shareholders of £100 million since the Emergency Measures Agreements came in, even though passenger numbers have plummeted. Frankly, it’s a national scandal that our money – taxpayers’ hard-earned cash – has been stuffed into the mouths of greedy rail shareholders at a time of a national health emergency.”

The train drivers’ union ASLEF added to the chorus saying the announcement was very far from “nationalisation by the back door” but took a softer line, saying: “We don’t want cliff-edge changes during a pandemic. We want to make sure our members continue to get paid for doing their jobs. Public ownership of Britain’s railway is a long-term strategic goal but, for now, during this coronavirus crisis, the extension of the emergency measures is a pragmatic solution to the industry’s problems.”