Last week, the government’s secret bailout talks were finally forced out into the open. Parliamentary questions revealed that at least £3.5 billion has been spent on ‘Emergency Measures Agreements’ since the beginning of the lockdown in mid-March.
It is now common knowledge that train companies are demanding a 12-18 month extension to the £900 million per month bailout. If the government signs up, this will lock passengers and taxpayers into the dysfunctional franchise system for the long-term.
Transport Secretary Grant Shapps is due to face the Transport Select Committee on Wednesday, so these discussions are about to become extremely high profile. A decision is expected at the end of this month.
Around 75% of the public supports renationalisation, yet they’ve been excluded from discussions like this for years. That’s why Grant Shapps and Chancellor Rishi Sunak are now being flooded with thousands of emails, demanding they act decisively and bring the railway into public ownership instead.
Public Ownership is the only way forward
The ‘Operator of Last Resort’ is ready to go
The government has already prepared sufficient back up operators to take over every franchise in the country. They spent at least £20 million on the ‘Operator of Last Resort’ last year, and used it to renationalise Northern back in March. Directly before the lockdown, several other franchises were also on the verge of financial collapse, including South Western Railway, Transpennine Express, West Midlands Trains and Greater Anglia. The OLR had been ready to step in on these franchises too, which means it is currently better resourced than it has been in years.
Experts are now saying that most franchises would go bust on even 80% of the passenger numbers they had before the lockdown. So, extending the EMAs would lock us into a fragmented, wasteful and inefficient system for the long-term, with train companies demanding that the taxpayer guarantees their profits until passenger numbers become profitable again.
Public ownership via the Operator of Last Resort would immediately allow the flexibility and innovation needed to adjust services in response to the needs of public health and a sustainable economic recovery. Then, the long-overdue work of building an integrated, efficient and accountable railway could finally begin.
The Williams Review has failed
The Williams Rail Review was supposed to fix the fragmentation that led to the chaos of the 2018 timetable collapse. However, despite 20 months work, it has failed to reach a conclusion. Disagreement between the Treasury and Department for Transport had reached a stalemate even before the lockdown. And since the EMAs came in, the Railway Gazette has reported there are fears that its recommendations would breach competition law. Earlier this month, the government stated that they are holding the Williams Rail Review back for ‘further work’.
It’s clear the government has been unable to find any acceptable commercial and legal model for the reform of privatised rail, and it’s now possible that the Williams Review will never be released at all. So, extending the EMAs for 12-18 months means the government will be treading water, with no idea what to do. It would lock us in to a dysfunctional and unworkable system for the long-term, delaying the systemic change that was urgently needed even before the corona pandemic.
On both sides of the argument, most agree that the railway needs to be ‘vertically integrated’ under a single, publicly accountable body at arms-length from government. However, the only successful attempt to theorise this has been under a public ownership model – see this Opposition White Paper on Rail published by the Labour party in April.
Passenger trust has never been so important
We are facing the biggest public health and economic crisis in a generation and the railways are undoubtedly an essential public service, now fully funded by the taxpayer. The government has no choice but to properly fund public transport if they want the economy to recover, and supporting rail services over the next 12-18 months will cost billions. It is vital that every penny of this is spent efficiently, with clear lines of accountability to ensure public health and sustainable economic recovery every step of the way.
Making the government fully responsible for the railway would immediately end the blame-shifting and contractual squabbling that have held back the railway for years. This bureacuracy, dysfunction and fragmentation would only get worse under an indefinite extension to the EMAs, or a system of management contracts.
Instead, the government should grasp this opportunity to act decisively and take the railway back into public ownership. The social, economic and climate challenges ahead require a properly integrated, accountable and cost-efficient system, run in the interests of the public, not profit.
CLICK HERE to support the email campaign for public ownership.
Supported by: Bring Back British Rail, We Own It, Association of British Commuters, Northern Resist and Norfolk for the Renationalisation of Rail.