Renationalising the railways: Corbyn’s young supporters have a case worth hearing

As Jeremy Corbyn’s general election manifesto is leaked, this blog will be increasingly focused on why his economic policies are so popular with young people and whether they really stack up. In the first of a two part series, Matt Bain (in his debut for Y Money Y) explores why renationalising the railways remains such a hot topic…

UPDATED: 2017

Matt Bain

Since Jeremy Corbyn earmarked renationalisation of the railways as a key policy, the debate has been punctuated by a loud chorus of dismissal from our wise elders. They shake their heads in disbelief at yet another of Corbyn’s potty ideas that will throw us back to the bad old days of the seventies.

“There are many stupid ways to waste public money, but surely none is more stupid than the idea of renationalising the railway”, John McTernan declared in the Telegraph last month. “Renationalising Britain’s railways would be folly”, cried FT View. A large number of young supporters back Corbyn’s call for change, but apparently we don’t know what we’re talking about; after all we’re too young to remember the bleak era of British Rail.

But our voices deserve to be heard because the future of the railways impacts on young people more than any other age group. According to Rail Trends 2013-2014, rail usage is highest among young working age adults. As exemplified by the online campaign ‘Bring Back British Rail’ (www.bringbackbritishrail.org) founded in 2009 by Ellie Harrison and garnering over 40,000 signatures so far, this is an issue that really matters to the young – it affects us the most because, unlike those who are deciding it’s future, we’re the ones who’ll have to use it for the next forty or fifty years.

The problem is felt acutely by the under-40 age group living in and around London (62% of journeys started or ended in London in 2012-2013, according to Rail Trends). At a time when our disposable income is already stretched to the limit due to the soaring cost of rent, we pay wallet-busting fares, the highest in Europe. Young families are being pushed further and further out of London thanks to the housing crisis, then find themselves forking out thousands of pounds for a season ticket to commute into London each year, often on overcrowded trains that seldom run on time. Yet “privatisation has worked. And worked brilliantly” says McTernan, an acolyte of Tony Blair. I wonder if he has to pony up the £3320 cost for a season ticket from Guildford to London each year.

We see companies publicly owned by other European nations, such as Abellio which is owned by the Dutch government, running our networks. Yet an absurd loophole means our only publicly owned company, Directly Operated Railways, was prohibited from retendering for the East Coast franchise earlier this year. These companies receive massive public subsidy and are run primarily to produce profits for their owners. According to a Guardian report last year, three companies that received more than 1 billion pounds each in subsidy (including Virgin) had returned a 10% profit to their owners (£100 million). The Times, in the face of this evidence, claims otherwise: “The idea that customers are being ritually abused to fund bloated profits… is one of two myths that have sustained support for renationalisation in defiance of good sense.” The German government has admitted they are ‘skimming profit’ from their entire Deutche Bahn operation (the company that owns Arriva and operates Cross Country Trains) to reinvest back into the German railway. It seems fundamentally unfair that high fares and high tax subsidies are being used to prop up foreign rail networks, instead of being reinvested back into the system here to, say, push down fares.

Those with vested interests proclaim that the great British public do not understand that this is the way it must be. The argument is that privatisation was the inevitable saviour of a decrepit railway system in permanent decline. A return to some form of British Rail seems to mean we will suddenly find ourselves catapulted back into the world of Life on Mars, sitting on trains so filthy you can’t see out of the window and munching on British Rail’s famous curled cheese sandwiches and concrete pork pies. I admit, I am not old enough to remember British Rail, apart from some rose-tinted memories of early nineties Intercity train journeys to Manchester (though I know these don’t really count – my Mum says trust me, it was hell on wheels).

Privatisation apparently turned that all around and created today’s beacon of success. The main evidence for this given is the doubling in passenger journeys from 750 million in 1995 to nearly 1.6 billion in 2013-2014 (although this is a gross simplification, ignoring a host of other factors influencing this trend). Yet is this ‘inevitability’ view not a product of historical retrospective; that things had to be the way they have been? Could John Major’s government not have simply modernised the railways instead of selling them off? Other European countries have continued to run their own railways; in fact they’ve made such a good job of this that they are running ours now!

British Railways, and other nationalised industries of the seventies and eighties were marred by notoriously bad management and suffered because of chronic underinvestment, down to a lack of entrepreneurship and incentives to perform well. Again, this argument ignores the fact that private industry was not immune to these plagues as well. As young people, it is our prerogative to be optimistic, and many of us hope for a future in which publicly-owned companies run the networks, in which bonuses and other incentives are in place to maintain morale and performance, and in which profits are reinvested back into the railways to keep fares down. Is this so fantastical? After all, until March East Coast was run by Directly Operated Railways for six years. It was run well with good, modern management and innovative marketing, returning more revenue to the government than most private companies (though it might be argued that this was during an era in which no investment in trains and new services was required). Perhaps we’ve moved on from the old schlerotic model of BR management – after all, this is a completely different world. The idea that we don’t trust civil servants to run the railways is a strange notion – given we expect them to run the NHS, the army, and even Transport for London.

Perhaps, rather than contributing to a lack of oversight and wisdom, young people are at an advantage having not lived through British Rail. Our ideas of what a reformed, renationalised railway might look like are not clouded by some fossilised seventies nightmare that many mentally conjure up as the inevitable future if the railways are put back in government hands.

The reality of how Corbyn could actually carry out the policy is another question. The principal issue lies in whether the networks could be seized from companies without compensation or the government would wait until each franchise is put up for tender. This will be explored in our next blog…