If how the railways run is a guide to the state of a nation, then it tells you something that Britain is in the middle of its biggest railway strike since 1994. Not coincidentally, that was the year the national rail network was privatized by the Conservative government of Prime Minister John Major.
A labor dispute has been simmering for nearly a year on the routes managed by Southern, a train operator that, as the name suggests, runs crucial commuter services between London and the South Coast. In December, the crisis escalated when around 1,000 train drivers joined in a strike action against Southern’s parent company, Govia Thameslink Railway, whose network also includes the Gatwick Express airport line.
In one day, about 300,000 passengers had their journeys delayed and disrupted. The strike action has been repeated every month since, including a networkwide stoppage expected this week. Together, the long-running battle between rail unions and the company is estimated to have cost Britain’s economy £300 million (about $375 million), and has even hit house prices in the region.
The details, of course, are local, and may even seem parochial. The dispute centers on Govia’s plan to remove guards from trains. The unions believe this would threaten not just jobs but also the safety of passengers. The industrial upheaval on a rail artery critical to one of the world’s largest economies tells a story that transcends borders, however: of the perils of introducing market ideology into key public services, a project driven not by the needs of passengers but by uncompromising dogma.
On the eve of the great sell-off of the 1990s, Mr. Major pledged that rail privatization would bring a “better, cheaper and more effective service for the commuter.” To repeat that promise to Govia’s beleaguered passengers today would at best provoke mirthless laughter. On Southern, passenger satisfaction slumped to 21 percent this year; nearly half of those surveyed reported delays in their last journey.
How did we get here? Not on a Southern train, obviously: The company has become a byword for overcrowding, delays and understaffing.
By introducing competition, privatization was supposed to make rail travel more affordable. According to research by Action for Rail, a group that is critical of privatization, Britain’s rail commuters spend up to six times more on rail travel than their European counterparts have to. Same-day return tickets on airplanes from British cities to European ones can be significantly cheaper than same-day train travel between British cities. While British workers are suffering the most protracted wage squeeze since the Napoleonic wars, rail fares in recent years have gone up at twice the rate of wage increases.
But more Britons than ever are using the rail network, crow the champions of privatization. That isn’t because of the success of the sell-off, though, but is because of changes in the economy: More and more people are finding that they have to commute greater distances for work, for example. Where the networks themselves have improved, it’s the state — not any private company — that has underwritten or financed modernization. Where the train operators have been left to their own devices, choosing whether or not to invest in new rolling stock, the result is clear: On some rush-hour train services into London, a third of passengers are forced to stand.
The privatizers claimed that competition would lift standards of service, put the needs of the consumer first, reduce the burden on the taxpayer, rid the system of inefficiencies and drive down prices. On all scores, the privatization of Britain’s railways is an embarrassment. Look no further than the current dispute on Southern to see how dysfunctional the privatized system is.
Govia is contracted to run the Southern franchise — and is paid about £1 billion (or $1.24 billion), a year by the government to do so. In return, revenue from ticket sales goes directly back to the government. Yet if train services are delayed or canceled, it is the government — or rather, the taxpayer — that refunds the bitter commuters. The company itself therefore has no incentive to settle with the unions; arguably, it is being paid by the Tory government to keep up the fight. Yet the transport secretary, Chris Grayling, pretends to have no hand in the matter, saying he cannot “wave a wand” to resolve the dispute.
Little wonder that a recent poll found that 58 percent of Britons believe rail privatization is a complete or partial failure, with only 13 percent describing it as a partial or complete success. A 2013 report commissioned by unions, “The Great Train Robbery,” found that British taxpayers spend far more on the privatized system than they did on the old nationalized model. Part of the reason for that is that the government subsidies built into the system in large part end up as dividends for shareholders, rather than being invested in upgrades.
Would public ownership achieve better results? As the right-leaning Daily Telegraph recently pointed out, when a troubled private rail franchise run by a company named Connex was taken into public ownership from 2003 to 2006, performance, punctuality and passenger satisfaction all improved. Similarly, after the East Coast network was renationalized in 2009, it became the most efficient rail franchise in Britain, needing less public subsidy than any other and returning hundreds of millions of pounds in revenues to the public purse. To complete the experiment, when it was again privatized in 2015, ticket prices on some journeys doubled and public satisfaction declined.
Not that public ownership has been banished from Britain’s railways — but only other European governments are free to buy up Britain’s rail networks. Foreign governments running British railway networks include France, Germany and the Netherlands. The important difference, of course, is that foreign state-owned companies are not accountable to British passengers (as a nationalized company is to British voters).
Considering all the humiliating failures, why have successive governments — both Conservative and New Labour — continued to pursue privatization with such unbending zeal? In short, to undermine organized labor. Britain has the “the most restrictive union laws in the Western world,” Tony Blair complained, shortly before winning election in 1997. And Mr. Grayling has made his antipathy to unions very clear — blaming them for the dispute, accusing the opposition leader of fomenting strike action, and even hinting at legislation to outlaw strikes.
Britain’s long-suffering traveling public is not impressed. A 2015 poll found that a clear majority of Britons supported renationalizing railways (as well as water and other utilities); strikingly, even a plurality of Conservative voters backed such a move. This isn’t a mass delusion; it’s based on the experience of millions of passengers who feel ripped off and exasperated by poor service.
Beyond the “travel chaos” headlines and lost millions of economic activity, the failure of Britain’s rail privatization opens broader questions that resonate beyond this country. Does it really make sense for the essential services we all depend upon to be for profit? The evidence from this two-decade experiment is a direct challenge to those who believe in the innate superiority of the private sector.
What a way to run a railroad.
Owen Jones is a columnist for The Guardian and the author of The Establishment: And How They Get Away With It.