Rail privatisation has delivered improvements through accountability and autonomy

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Both the leading candidates for the leadership of Britain’s opposition Labour party have now committed themselves to renationalising the country’s railways. The words from Jeremy Corbyn and Andy Burnham are no surprise — rail renationalisation sounds leftwing but commands broad popular support, even many Conservative voters favour it.

The unpopularity of rail privatisation is an odd phenomenon. British Rail, the monolithic state-owned operation that preceded privatisation, was one of the country’s most reviled institutions. And what people do seems at variance with what they say. The story of rail usage under British Rail was one of inexorable decline. Between 1960 and 1995, passenger numbers fell by about a third. Since 1995, they have more than doubled. The dramatic trend reversal coincides exactly with privatisation.

Britain’s railways generate a wealth of data — every journey is reported and the results aggregated. Huge demand-forecasting exercises are undertaken by the train operators collectively in conjunction with the Department for Transport. Still, we have little understanding of this shift in public preferences.

Similar trends can be seen elsewhere in Europe, although the growth of demand for rail in Britain is exceptional. From the 1960s car ownership became the norm. Households embraced the sense of personal freedom it offered, and in later decades access to a car was a means by which young people could assert their independence.

But the golden age of the car ended in the 1990s. As the environmental movement grew powerful, road building ceased to keep pace with car use, and the dream of the open road was replaced by the reality of urban congestion. If greater personal mobility was the life-changing technology of the 1960s, mobile communications have fulfilled that role in the past two decades.

That shift is relevant to how we travel. You can use your phone or laptop on a train — and every train is full of people who do. You can use your phone in a car, but not comfortably or most important legally. For journeys such as trips from London to Scotland, the increasing hassle of air travel favours the train. But such changes have happened far beyond the UK. We need a British account of increases in rail usage.

The bewildering plethora of fares offered by train companies — derived from innovations in yield management pioneered by British Rail; for example, increasing prices to match increased demand — irritates customers, but does appear to stimulate traffic while limiting public subsidy. More generally, privatisation has achieved many of the things its proponents hoped it would: better trains, new timetables, more responsiveness to passenger needs.

The benefit of rail restructuring (achieved at the cost of complex negotiations between different service providers) has been the freeing of managers from the dead hand of centralised control which was the hallmark of British Rail. Some of the worst managers — notably the weaker franchisees and the incompetent executives of Railtrack, the former rail infrastructure operator — have been shown the door. Critics of privatisation are right to point out that such autonomy and accountability could be achieved under public ownership — as with the East Coast franchise, which was for a period taken into state control. But mostly it is not.

The public attitude to rail is ambivalent. People love trains, loathe rail operators, and mostly use their cars (rail still accounts for less than 10 per cent of passenger mileage). We want a service that cannot be delivered — a public transport system that picks you up at the door, effortlessly deposits you where you want to be, and does so at modest cost. The good — and startling — news is that such a service is on its way. It is called the driverless car.

This article was first published in the Financial Times on August 19th, 2015.

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