The Department for Transport has been traditionally unhappy about the n-word – nationalisation, that is. But Sim Harris has been wondering whether perhaps it is time for a u-turn.
WHEN the Virgin Trains East Coast franchise collapsed in 2018, it was suggested that the Intercity East Coast operation had been nationalised (or strictly renationalised, as it had been in the possession of the DfT’s Operator of Last Resort between 2009 and 2015). Use of the n-word triggered disapproving intakes of breath among the communication gurus at the DfT, with one press officer telling Railnews sternly that the changeover was not ‘renationalisation’ at all.
Railnews suggested that as the Oxford English Dictionary defines ‘nationalise’ as ‘to convert from private to government ownership’ the n-word seemed appropriate, but the DfT would have none of it, presumably because it was trying to protect and preserve the already flagging franchising system. (It is also true that the rolling stock remained with the private sector leasing companies.)
Now the Office for National Statistics has confirmed that all the British franchises (apart from Transport for Wales, which is not strictly a franchise) have had their debts moved to the public sector. After all, virtually all their commercial freedoms such as they were have been removed, and so they can hardly be expected to continue to accept the liabilities. None of the franchises, for example, may ‘make significant changes to fares or staffing levels without government agreement’, and they are bound to pass all revenue to the government. In return, the DfT pays their costs and also gives them a modest management fee.
The railways were first nationalised on 1 January 1948, when the Labour Prime Minister was Clement Attlee, and slowly privatised again between 1994 and 1997. The franchising system replaced the British Railways Board on the passenger railway in 1996 and 1997.
The old companies, although not insolvent, were looking financially uncertain after World War 2, although they insisted that they could ‘carry on’. In any event their protests were disregarded, and British Railways began what also turned out to be an uncertain existence.
The future of the franchises is looking critically uncertain now. They have already been effectively abolished by Keith Williams, whose review of the railways remains unpublished but who had been dropping plenty of hints.
The Rail Delivery Group, which represents the franchised operators, is refusing to accept defeat. At the end of last week, RDG chief executive Paul Plummer said: ‘This is a temporary accounting change that reflects the extent of government involvement in running trains during a national emergency. The Covid crisis presents a chance to move towards a new way of running the railway where contracts put customers at the centre and the private sector’s track record of attracting people to travel by train in safety is harnessed to boost the economy, the environment and the public finances.’
He could hardly say less, but it is now widely rumoured that the DfT’s Emergency Measures Agreements, introduced in late March and currently due to expire on 20 September, are being discussed behind the scenes with a view to extending them – and the ‘renationalisation’ they represent – for up to two years. It is surely reasonable to suggest that the old franchises would not be able to withstand a return to the previous arrangements as soon as next month in any case.
If there is a major extension of the EMAs into 2021 and 2022, a return to ‘traditional’ franchises looks even less likely. Now that the events of 1996 and 1997 have effectively been reversed, perhaps the shade of Labour Prime Minister Major (later Earl) Attlee is muttering in a dark corner of the afterlife. It is hard to hear his words, but he seems to be saying ‘I told you so’.
The August print edition of Railnews, RN282, was published on 30 July. The new edition and some previous issues can be obtained by calling 01438 281200 from UK numbers or +44 1438 281200 internationally, and selecting Option 2.