Rail nationalisation? It's time Britain got on with a real privatisation instead

Oliver Gill
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End of the line: Virgin Trains East Coast is 90 per cent owned by Stagecoach and 10 per cent owned by Virgin (Source: Getty)

Returning the east coast mainline to public ownership yesterday prompted the inevitable calls for full renationalisation of Britain’s rail network.

As transport secretary Chris Grayling demanded Stagecoach hand back the keys, trainspotters purred at the prospect of the resurrection of the London and Northern Eastern Railway (LNER) livery. Meanwhile, the unions hailed the removal of a dastardly bastion of capitalism – the Virgin brand – which has adorned trains between London and Edinburgh.

“Rail privatisation has been an expensive and ideologically-driven failure that has been a constant drain on the taxpayer’s pocket,” said Unite’s rail head Hugh Roberts.

This tired and familiar chant is misguided on two counts.

First, Britain’s railways have not been fully privatised. The stations, tracks and pretty much all of the infrastructure are owned by government-backed Network Rail. Tightly-controlled franchises are handed out to train operating companies, which run them for only a handful of years.

Then there is the cost to the taxpayer. In its final years, British Rail cost £2bn a year to run just the trains – operating the infrastructure was on top of this. Nowadays, according to the Rail Delivery Group, such a burden has been transformed into a £200m a year boost to the Treasury’s coffers.

British businessman Richard Branson pose
Virgin Trains East Coast will halt running the Flying Scotsman on 24 June (Source: Getty)

Read more: Government strips Stagecoach of Virgin East Coast franchise


But nationalised railways work on the continent, don’t they? It appears not. France – often championed as an example of how a nationalised railway can be successful – is moving towards private ownership. Weary of a costly service that is regularly held at gunpoint by a militant workforce, President Macron is doggedly planning to drag the network away from state control.

The number of passengers using Britain’s railways has doubled since privatisation. But the number of services operators can fit onto the tracks is up by just over a quarter (28 per cent). The reason supply cannot keep up with demand is not because of privatisation; it is because Network Rail stands as a gatekeeper for infrastructure investment.

Tory MP John Penrose yesterday hit the nail on the head when he said: “Nationalisation would take us back to the bad old days [but] franchising is too brittle and keeps falling over.”

The general public continues to view British Rail through rose-tinted glasses, but times have moved on. Ministers should use the demise of the east coast franchise as a springboard to open up Britain’s railways to more, not less, private investment.

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