Back on track

At our best when at our boldest," Tony Blair proclaimed to delegates at the Labour party conference two years ago, describing the need for yet more reform.

Since then, our railways have seen huge changes - mostly for the better. We’ve seen Railtrack turned into the not-for-profit Network Rail, thousands of engineering workers transferred in-house to Network Rail from private firms and a government white paper restructuring the railway.

At conference today in Brighton, delegates will have the chance to adopt an even bolder policy - but one our railways desperately need.

The Transport Salaried Staffs’ Association (TSSA), the largest rail union affiliated to Labour, is moving an amendment to a policy document calling for an "integrated, accountable and publicly owned railway". It’s been our policy since 1910, so at least we’re being consistent. But our real motivation for taking this stance is an understanding, drawn from the frustrations of working in a privatised industry, of the shortcomings of the present structure.

It is not our intention to have a cheap shot at the government. Labour must be commended for the record levels of investment it has ploughed into rail since coming to office, and for undertaking a fundamental review of the industry, which led to the white paper in July.

Sadly, these plans don’t go far enough. At the heart of the problem lie the private train operating companies, which rely on government subsidy. Together, the 28 franchises received more than £2bn from the public purse last year. Only seven contributed anything back to the exchequer - a paltry £117m in total. This means the government makes a 95% loss on letting private firms run passenger services.

The reality is that many franchise holders take little or no financial risk. Some operate on a "cost-plus" basis, whereby the operator receives a fixed margin above its costs to run services. They are effectively paid a profit to run the trains on behalf of the government.

Further, as a result of a complicated money-go-round, operators make money from the bureaucratic system of penalty payments for delays. For some, this was more money than they made from running trains.

So what’s the point of having private firms run our trains ? They don’t take great financial risk, they don’t make money for the public purse and there certainly isn’t any real competition between operators on a day-to-day basis.

Even British Rail was better value for money. Today’s subsidy to South West Trains comfortably outstrips the amount paid to British Rail to run the whole of Network South East a decade ago.

Why does the government think this situation is better than running train services in the public sector ? The question is especially pertinent as we know that the public sector can run trains just as well as the private sector, because it’s already happening.

Since Connex was dumped from its franchise last year, having received £500m in taxpayers’ money and in return given commuters nothing but headaches, the service has been run in the public sector by the Strategic Rail Authority, as South Eastern Trains.

Passengers roundly welcomed the decision to dump Connex. Now, the service isn’t perfect, but the latest independent figures show that it is performing as well in the public sector as it did in the private sector, and compares well with other private operators on the network.

Public ownership would give better value for the taxpayers’ money that is being spent on running services. And taking the other franchises back into the public sector as they expire won’t cost the Treasury a penny in compensation. Those reasons alone should make Labour embrace the policy. But if a deal-clincher was needed, here it is : it’s a popular policy.

Don’t take our word for it. Last Wednesday, the Guardian reported that its own pollsters, ICM, had found that two-thirds of all voters, and 72% of Labour voters, back public ownership. Our own independent research has revealed that only one in 10 of the public thinks that passenger services should be run by the private sector as they are now.

From stockbroker-belt commuters in middle England to Labour’s traditional heartlands which were built around the railway, this is a policy that resonates with the electorate. Facing the strong probability of a general election next year, Labour needs bold policies to secure its core support and demonstrate to floating voters that it isn’t afraid to take radical decisions on public services. TSSA wants to make sure that Labour wins a historic third term - and we want it to have the best policies to sell on the doorstep. Public ownership is the right track for our railway.