Train Wreck: the Privatization of British Rail

Faced with an ailing railroad system 50 years ago, Britain’s Labour Party government bit the proverbial bullet and nationalized the country’s rails. It created an integrated passenger rail service called British Rail in 1948 that was affordable and reasonably efficient, if marred by occasional delays. Studies applauded BR’s safety record. The most common complaint was the sandwiches.

BR was viewed as an essential public service, but generations of service cuts starting in the 1960s and accelerating in the ’80s under the Conservative Thatcher government laid the tracks for full privatization.

Between 1993 and 1997, the system was dismantled and sold off, piece by piece. The result was a profit-seeking rail system that, according to the Guardian newspaper, has “punctuality problems, chronic overcrowding, and terrible consumer satisfaction ratings.”

The once-integrated system became a fragmented web of 100 separate profit-taking outfits. There were 25 operating companies, three regional firms that owned the trains, and 13 that maintained the tracks. One big private company, called Railtrack, owned but did not maintain or repair tracks, bridges, and stations. Service and maintenance were separated, with dire consequences.

In the 30 years before privatization British Rail saw only one fatal accident due to track failure. In the five years after privatization, there were five fatal accidents caused by signal failures, troubles with new safety equipment, and track problems. Between 1998 and 2004, 39 track maintenance workers were killed due to lax safety.

The operating companies blamed Railtrack, which contracted repairs to maintenance firms, which subcontracted them to construction companies with no rail expertise. No one took responsibility. In grudging recognition of the need for government involvement, Railtrack was replaced by a public non-profit corporation, which brought some maintenance work “in-house.”

UNFAIR FARES

Fare increases under nationalized British Rail were infrequent and modest, if only because the politicians didn’t want to take the blame. Today, under the privatized system, they are an annual ritual and they are large—6 to 11 percent this year. British passenger fares are on average 50 percent higher than in the rest of Europe. A round-trip day fare costs more than three times that on France’s still-nationalized and highly efficient railroad.

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Under nationalization the whole system issued only seven types of tickets. The privatized setup, in contrast, was an impenetrable jumble of 70 fares, conditioned by 776 qualifications and restrictions.

In response to passenger anger, in 2008 the system was simplified to three types of tickets—but most of the eliminated fares were the discount deals. Rail watchdogs said some fares doubled and even tripled, pushing passengers into carbon-spewing cars and planes.

SUBSIDIES FOR THE PRIVATIZED

No national passenger rail service in the world is profitable. British Rail was government-subsidized, but the funds were put into the system. The companies that bought the pieces of the rail system now pocket portions of that taxpayer money.

Today the government is still subsidizing rail service, to the tune of $5.6 billion a year, about 50 percent of operating costs. This is a far higher level than British Rail ever received. The Labour government wants to reduce subsidies to 25 percent of total costs, which means that the private companies will try to keep profits high by increasing fares and gouging their workers.

At the time of privatization, one railroad manager reported that government ministers “told us in private that they wanted to break up the unions, but of course they did not say so in public.” The largest railroad union, the Rail, Maritime and Transport Workers, struck against privatization, but could not stop it.

Instead of bargaining with one employer, the unions now bargain with scores of different companies that have cut jobs and gone after union contracts.

It has taken years for rank-and-file activists and stewards to rebuild. In 2002 they organized the Campaign for a Fighting and Democratic Union and elected a reform leader, Bob Crow, as general secretary. They set a course for more militant action, including a coordinated strike of 12 of 21 companies over safety issues after a train crash.

They continue to fight for re-nationalization, too. This February, protesting more cutbacks, Crow said, “What is supposed to be a public service has become a crude mechanism for converting huge sums of passengers’ and taxpayers’ money into profits. It is time to bring rail operations back into the public sector where they belong.”