It was a lot of hullabaloo about not very much, a three-word rebranding intended to be catchy but more likely to be lampooned, with the big issues dodged, a typical initiative from the Johnson government. The transport secretary, Grant Shapps, unveiled the much trailed railways white paper last week, making permanent the way railways have been run during the Covid crisis, but now under the new name Great British Railways, or GBR.
Rail franchisees will become contractees, managing their part of the system with cost-plus contracts, running no risk but with guaranteed revenue – contracted fees. This was inevitable. Two-thirds of the franchises awarded since 2012 have gone to single bidders. The uncoordinated timetable changes were a disaster. When Covid struck, the government had to underwrite impossible franchise commitments. The system was broken.
What this is not is renationalisation, despite some overexcited reaction on the left. It is much-needed centralisation, setting the seal on what was happening anyway. The Department for Transport will transfer its existing powers to supervise the totality of the system, including Network Rail, to a new quango – Great British Railways.
GBR will direct timetables and fares and rent rolling stock from private sector contractors by paying them fees for contracted use, rather as Transport for London rents overground trains in London. It is a refined form of “rentier capitalism”, the state creating another area of economic activity that offers the private sector guaranteed returns for little risk. It won’t have to worry about revenue, only controlling its costs.
GBR will create an integrated national timetable (the government could do that now) and set fares (as it can now), making up any shortfall in revenue by subventions from the Treasury (as it had to when passenger numbers plummeted during the Covid crisis). It is today’s status quo – an enforced retreat from the botched privatisation of the 1990s – dressed up as a great reform.
Shapps, anxious to avoid any charge that he is a Tory Jeremy Corbyn, insisted that all the contractors would be recruited from the private sector (except if they are foreign – foreign publicly owned bodies are deemed to be private). Chiltern Railways, for example, will continue to be operated by the German Deutsche Bahn but rebranded as GBR.
What will have appealed to the prime minister is doubtless a rebranding of the network as Great British Railways that also stopped short of renationalisation.
But what prompted rail privatisation nearly 30 years ago was the creation of a structure in which the financing of rail investment was withdrawn from the Treasury and placed in the private sector, dictated by need rather than artificial government limits and control. Now, the taxpayer will finance investment in rolling stock and locomotives but will not own them; nor will it determine how much investment is undertaken; neither can it guarantee how well the stock is maintained; nor be able to secure commitments against overcrowding.
The hope is that greater integration will mean less overlap and waste. Possibly. Will fares, some of which have doubled in real terms since privatisation, come down? Almost certainly not, with Shapps setting a hoped-for target for cost reductions that may or may not be hit.
Imaginative reform, aside from the introduction of flexi season tickets, has been absent. One solution would have been for the government to take a foundation share in each rail franchise holder and require them to operate as a company consecrated not to maximising profits but to maximising public benefit. The government could have created a new class of such companies in which pension funds and others invest – companies dedicated to promoting social benefit.
This could have been within the context of a plan to transform the network. It needs to be electrified as part of the drive to net zero carbon emissions. HS2 is to run to Manchester, but the east coast line to Leeds, Newcastle and Edinburgh is being delayed indefinitely. Nor are there plans for a high-speed east-west link across the Pennines. Addressing these issues would be a real rail revolution. Instead, we have a new logo and an enterprise that may quickly lose any sense of being great.
