Thursday 17th May
Well, we had the spectacle yesterday of Chris Grayling, a particularly obsequious Tory Minister for Transport coming to the House of Commons to announce that the North-East Rail line was once more being taken back into (a sort of) public ownership. It was John Major who came up with the particularly convoluted privatisation of our Railways. The infrastructure; the rails, the stations and the scheduling of trains was to be a public company Network Rail. The trains and the collection of fares was to be franchised out to different consortia (all owned by the same shareholders). The franchisees would pay the Government an agreed annual amount, but the Government would in effect pay for the infrastructure. Fares would be allowed to rise by 3% above inflation. Confused ? – You should be.
In essence the belief was that Private Companies, in order to maximise their profits, would run the Railways better than a publicly owned one. This was Political Dogma; the idea that Private is always better than Public; even taking into account the profit factor.
Well, it hasn’t actually turned out that well. Frachisee after franchisee has failed and handed back their franchises to the Government. But here is the funny bit. Rather than these Consortiums being in any way punished for failure, or even having to pay the remaining fees (which they promised at the time of bidding) to the Government, they are rewarded. The Government simply says “We are sorry that you could not fulfil the contract you signed so recently with us. Let us relieve you of the burden. No, don’t worry – the tax-payer will pick up the tab. We understand completely that you cannot possibly carry on if you are not making a PROFIT.”
So, if they make a profit they win. If they fail they win, because the taxpayer picks up the tab.
AND…..these same failed companies are not only allowed but actually invited to bid for even more contracts in the future. Reward for Failure. And Grayling had the gall to stand up and say how wonderful the Railways were being run under Privatisation…