London North Eastern Railway is bumping up ticket prices (Picture: Wikicommons/ Walter Baxter)
Privatisation has destroyed Britain’s railway network with delays, cancellations, overcrowding and constant attacks on workers. But the Tories aren’t backing off the private sector track, despite a national dispute to defend jobs and conditions. Transport secretary Mark Harper last week outlined plans that will give train operators larger profits off the back of worsening working conditions and higher fares.
His plan is to “enhance the role of the private sector”, according to the Financial Times newspaper. Train operators will allegedly have more financial risk, allowing them to make greater profits if passenger numbers rise.
A new public sector organisation Great British Railway will be an “arm’s length body” responsible for coordinating services and enhancing the private sector’s role. The railway network has been in a constant crisis since the privatisation and break up of British Railways in 1993. The Tories hoped privatisation would reduce government funding by fragmenting the network and that companies would bid to operate services.
This was a huge failure. State funding rose. And privatisation led to bosses competing to chase profits, and to fare rises, poor running of services and companies going bust. During the Covid pandemic, forced travel restrictions meant passenger numbers dropped by 93 percent.
Suddenly, rail firms decided the state was a good thing as the government stepped in to fund private companies. Public funding of the rail increased by £10.4 billion in 2019-2020 to £16.9 billion the next year. Shareholders still managed to grab around £38 million in dividends.
All franchises were scrapped, and the government assumed all financial risk by putting train companies on fixed management fees. The private investors were able to profit when passenger numbers were high but were protected from losses by state intervention. The no-risk return on investment made rail contracts very attractive, pushing up the overall industry cost as various companies bid for contracts.
But bosses pushed for these contracts to be replaced by a market-oriented model to incentivise the industry to grow passenger numbers—and profits. The new scheme is a part-return to the old model of bidding for franchises. Different contracts will apply for different routes with more commercial freedoms given to inter-city routes. And it will essentially outsource passenger services to private companies.
Harper has announced that London North Eastern Railway (LNER) will extend the trial of selling only single tickets. This could soon be extended to the rest of the network, likely bumping up prices. There is also a trial of demand-based pricing on some LNER services—as seen on commercial flights—which means fares will inflate depending on how many tickets are sold.
RMT union general secretary Mick Lynch said, “Many rail services that are already in meltdown will suffer even more because of plans to cut thousands of rail jobs and jeopardise safety standards but all the government can offer is tinkering around the edges on passenger fares.
“Rail reform and a vision for the industry needs to have public ownership at its core and the goodwill of railway workers to make it happen. But with the government hellbent on rewarding the private sector and attacking the terms and conditions of rail staff, goodwill is in short supply.”
Harper’s changes will see an intensification in the attacks on rail workers. They show that the Tories are bound to privatisation, regardless of how much it affects workers, while claiming it’s to help passengers. It makes the ongoing rail disputes even more important. Profit first, workers and passengers last, must be resisted with an escalated schedule of strikes.
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