The organization, Trewin explains, still has three inescapable functions. One concerns the Channel Tunnel. The board was party to the original usage contract, which is subject to French law. Handing that over to anyone else would be extremely complex. There is also a great deal of non-operational property left over, especially from the pre-Beeching era: a few office blocks, old branch lines, goods yards, bridges and viaducts on the old lines, many of them listed as historic monuments or complicated by restrictive covenants. These are referred to, rather cruelly, as ‘the burdensome estate’.
Some of the lines are being handed over to Sustrans, the charity that turns old railways into cycle paths, and some to local councils. But the estate is diminishing only slowly. In the brief period of railway optimism that followed Labour’s victory in 1997, the deputy prime minister, John Prescott, froze sales of railway property in case anything might be required for reopening routes. And when Eurostar services were moved from Waterloo to St Pancras in 2007, the board acquired both the disused depot in West London, confusingly known as North Pole, and the mothballed platforms at Waterloo.
The third – and potentially very burdensome – function is dealing with claims by former employees against British Railways, particularly those involving industrial diseases and most particularly those involving exposure to asbestos – which are expected to reach a peak by 2013. In the early days of privatization, the board still had responsibility for the British Transport Police.
But when potential greatness beckoned once again, Pentonville Road was ignored. In 2003 the then Strategic Rail Authority stripped one franchisee, Connex South-Eastern, of its epaulettes and temporarily renationalized the service. But it took charge of the operation itself, instead of handing the job to the British Railways Board. Now the SRA has gone the way of so many other short-lived organizations and acronyms of the privatized railway – Railtrack and Thames Trains, OPRAF and GNER – while good old BR lingers on.
When I saw him, Trewin had just come back from the funeral of a former colleague. There had been a good turnout of the old brigade of management and he was enthusing about the camaraderie the job engendered: ‘Working for the railways is a bit like being in the army. There is this tremendous loyalty and involvement. You join for life in a sense.’
‘Don’t you miss, well, railways?’
‘Not really,’ he said.
‘There’s a tremendous variety in what the railways do: property, law, industrial relations. Railway management isn’t necessarily about running trains.’
Trewin was somewhat tickled by the retrospective popularity British Rail now enjoys. It was easy to forget, he said, the reputation it used to have. ‘When you went to parties, it was like being a doctor. You didn’t say what you did for a living.’
The Slim Controller
Only a few weeks after Cecil Parkinson’s promise-cum-warning about privatization at the Conservative conference, Margaret Thatcher was overthrown as prime minister, and replaced by John Major, who introduced a fresher and, most felt, less doctrinaire style of government.
Naturally, there was a new transport minister, in this case Malcolm Rifkind, who was supposed to come up with a viable privatization scheme. This proved difficult in the eighteen months that remained before the general election which – it was universally assumed – the Conservatives would lose. Rifkind, who may have been less than ultra-zealous about the whole idea in the first place, was particularly unenthused by the plan being urged on him by the Treasury to split the trains from the infrastructure. And his own civil servants had some difficulty taking any of this seriously because they assumed railway privatization would be strangled at birth by the incoming Labour government under Neil Kinnock.
There were at least five different ways in which British Rail could have been privatized:
1.
As a whole, substituting a private monopoly for a public one.
2.
In regions, recreating an updated version of the inter-war Big Four. This was Major’s favoured solution.
3.
In business sectors, following the lines of BR’s revamp.
4.
Separating the ownership of trains and tracks.
5.
Throwing everything up in the air and hoping for the best.
What emerged in the end, of course, was a combination of options 4 and 5.
Rifkind did try to resist this: ‘I became increasingly persuaded that the split between infrastructure and trains was a mistake, it was foolish,’ he recalled later. ‘Forty per cent of an operator’s costs are infrastructure. And to remove an operator from influence on forty per cent of his activities is a very poor way of running any business.
‘The argument was that unless you split infrastructure from operations you don’t get competition. But the reality is that, except in a very few cases, the competition you’re talking about is with road and air. We were locked in that argument with the Treasury when the election appeared. I was making a nuisance of myself. They thought they’d got beyond that stage.’
During the 1992 election the Labour transport spokesman John Prescott argued – as cogently as that great language-mangler ever has done – for using private funds to allow British Rail to invest: ‘It is absurd that French Railways can raise funds for new investment in the City of London, when British Rail is not allowed to do so,’ said the party’s manifesto. After thirteen eventful years in power, the Conservatives did not have many fresh ideas, and railway privatization stood out in a rather thin set of proposals: ‘We will increase the maximum penalties for making obscene or malicious phone calls,’ was one particularly thrilling subsidiary promise. When the public shied away from Kinnock and voted the Tories back – with a majority cut from eighty-five to twenty-one – it was not entirely clear how they might pass the time.
Much of the time, they looked for non-political entertainment. Between 1992 and 1997, a more than normally high proportion of their ministers and MPs were caught out misunderstanding the significance of the word ‘member’. Between extra-mural shags – and dubious schemes for personal enrichment – they privatized the railways. The sex, I would argue, was far less damaging.
Rifkind was replaced by John MacGregor, one of those ministers depressingly known as ‘a safe pair of hands’, which means they can competently execute and defend as required any policy, no matter how dire. In this case MacGregor had to do more than that: on his appointment after the election he went into his office, sat down, and asked to see the privatization plans. We can imagine the polite Sir Humphreyish cough that ensued. ‘We weren’t expecting to see you, minister.’ There were no plans.
An extraordinary period followed. ‘I had a very intensive six weeks,’ said MacGregor in a masterly understatement. ‘I realized that if we were going to get this through we had to get the bill in the first session of parliament. So I had six weeks to make up my mind what the structure would be, then get it through cabinet sub-committee, cabinet and then do a White Paper.’ No wonder what emerged was a dog’s breakfast.
While all this was going on, there was a little foretaste of the future. Barely a fortnight after the election Stagecoach, the energetic Scottish-based company which had made a fortune running privatized buses, stepped in when British Rail crassly announced it would do away with seating carriages on the Aberdeen sleeper, forcing everyone to pay for a bed. Stagecoach leased six coaches from British Rail, painted them in corporate livery, and launched them with a journey graced by the presence of Roger Freeman, MacGregor’s junior minister. Even before the election, Freeman had demonstrated a political tin ear by speculating that the revamped railway could have ‘cheap and cheerful’ trains for typists and more luxurious trains for civil servants and businessmen. And presumably junior ministers.
Freeman took the inaugural train from Aberdeen, and enthused about the project – ‘I am used to late-night sittings in the House,’ he boasted as the journey began. Not to the extent of sitting bolt upright all nig
ht in one of Stagecoach’s privatized seats, however. South of Carlisle he was spotted skulking off to a nationalized sleeper carriage. ‘I’ve got a full day’s work in front of me,’ he said. ‘I am fifty years old and I didn’t feel like sitting up all night.’ The contract was skewed in favour of BR, and the experiment only lasted six months. But it was a marker.
Freeman did indeed have work to do. By July, just two months after the election, MacGregor was presenting his rather thin white paper, New Opportunities for the Railways, to the Commons. It was the sort of speed Whitehall normally only achieves in response to a national emergency. The emergency was that the prime minister had determined there was a political imperative to do the job.
There remain two fundamental mysteries about this entire saga. Why was the Major government so determined to privatize the railways? And why did it choose this particular model which, was seen at the time – and since – by most observers as wholly absurd?
The first answer goes straight to the top. John Major is often remembered as a nice but rather ineffectual prime minister and, for that reason, it is widely assumed, can hardly have known what was being done in his name on the railways. Christian Wolmar subscribes to this theory. ‘He apparently showed little direct interest in the issue,’ Wolmar wrote in Broken Rails, ‘as there is no significant mention of rail privatization in his autobiography.’ As we have seen with Harold Macmillan, autobiographies are an unreliable guide; and this ex-PM was also far more interested in recalling his more glamorous exploits. My own private information at the time was that Major was utterly determined on this issue and was driving railway policy; this was reinforced by an interview conducted for this book.1
‘I don’t deny that British Railways was more efficient than it had been in the 1960s,’ he said. ‘But it was quite difficult to find an argument for it staying in the public sector. It was unreliable, there was no cost control, the freight growth was below what it should have been and it was pretty unfriendly to passengers. And yet it was vital to Great Britain plc that it should be vibrant, successful and taking freight off the roads.’
Major admitted that BR suffered badly from under-investment and always had. ‘Would it ever have got enough from government? The answer is no. It would have had to compete with health, education, defence …
‘The PSBR [Public Sector Borrowing Requirement] was such that it would have limped along for ever. It had to go into the private sector, so it had access to capital to make it successful, so that whenever there was a crisis in government it would not be in the position of having its budget cut. There is a difference between dispassionate regulation and government control. The railways shouldn’t be subject to the day-to-day whims of government.’
‘Are you saying the privatization was necessary because of the government’s flaws rather than the railways?’ I asked.
‘A bit of both. In the undertow British Rail was inefficient.’
MacGregor had made a similar case in a Radio 4 discussion in 2006: BR could never be sure about its capital expenditure programme because of all the other pressures the government faced. It is, when you think about it, a damning self-indictment when made, not by outsiders, but by ministers representing a government that had been in power – so it sometimes seemed at the time – more or less for ever. We cannot be trusted. Stop us before we kill again.
And during the five years of that parliament, no one in government ever made a coherent and compelling case that replacing British Rail, for all its manifest imperfections, would produce an improvement. What one suspected, and still suspects, is that a fourth-term government, with no obvious agenda, needed this project. Whether the industry needed it was a secondary issue.
Privatization had been a surprise hit for Margaret Thatcher in the 1980s. Previous post-war Conservative governments had been very cautious in pushing back state control. In the early 1970s Edward Heath had confined himself to resolving anomalies, selling off the Thomas Cook travel agency and the pubs in Carlisle. Thatcher astonished everyone with the boldness of her policies: British Telecom and British Airways, most obviously, perked up considerably under private ownership.
But the essence of the policy was a piece of political trickery. State assets were sold off to great armies of private shareholders who, in the bull market of the time, were thrilled to be handed certificates which increased in value every day. This was not surprising since the state’s assets were sold off cheap to increase their palatability, and the public never noticed they were buying stuff that had belonged to them in the first place. Thatcher had sold off the family silver, as the aged Harold Macmillan put it.
However, these schemes had all been perceived as successes, and there was now a deeply entrenched belief – to which even the Labour Party was having to adjust – that private ownership was a good thing and public ownership bad. Full stop. Just as the reverse had been accepted in the late 1940s. The belief also grew, in government particularly, that anyone could run a railway except a railwayman. But even the government realized it would have to continue subsidizing the railways, as well as exercising a large measure of control. How did this square with the principle of free enterprise? There was no time for philosophical speculation like that. The government had a train to catch.
One problem with this privatization is that the structure, as initially conceived, offered no scope to buy off public opinion by appealing to its avarice. Another was that the structure made very little sense. ‘Our aim is simple,’ MacGregor told the Commons, ‘to improve the quality of railway services for the travelling public and the freight customer.’ The route he chose to achieve that was unbelievably convoluted. Some enthusiasts for privatization have insisted that trains and infrastructure had to be separated to comply with European legislation. This is true but mad: other countries have dealt with this requirement by small accounting procedures, not by a multi-billion reorganization.
The surest sign of the failure of railway privatization is that it is difficult to identify precisely who came up with the scheme that emerged. Those close to the action pinpoint either Sir Christopher Foster, who by now was advising MacGregor, or Sir Steve Robson, head of the privatization unit at the Treasury. Foster, a defender of privatization, denies paternity. ‘If it was Foster,’ said someone who dealt with them both, ‘he did it through love. If it was Robson, it was hate.’ But it probably was never that simple. There seems to have been a convergence of opinion between the Treasury’s privatization unit and the Department for Transport’s civil servants, who were themselves reorganized wholesale after the 1992 election to weed out recalcitrants.
At the heart of it seems to have been the fantasy – which can only have come from the Treasury – that the railways offered serious opportunities for internal competition which would at the same time drive down the need for subsidy. Major was not involved in the details, but was then persuaded to drop his enthusiasm for a return to a regionally based system. He admits what he got was not what he wanted originally, and that his own idea was influenced by nostalgia.
… I do not deny it may have been part of my thinking, a legitimate part of my thinking. I am interested in history, and there is nothing wrong with nostalgia. We do have a nostalgia for steam trains. It was precisely because of that that I wished to make the railways what they could be.
We went the way we did with advice from within the industry, the Treasury and the Department for Transport. There were a lot of dire warnings that, if we had privatized it regionally, the companies would have spent their money on rolling stock and not enough on track and safety and infrastructure. For presentational purposes.
My idea was more glorious but maybe this was the more realistic. It is quite difficult to ignore the advice you are given about safety.
‘Some think you were not all that enthusiastic about the policy,’ I said to Major.
‘They’re quite right in thinking I was not an ideologue for privatization. They’re quite wrong in thinking I wasn’t in tune with t
his privatization.’
‘You drove it?’
‘Yes, I did. It didn’t get in the manifesto by chance.’
‘You were the Fat Controller?’
‘I was the Slim Controller,’ he replied.
Not Even a Choc-Ice
There was very little glory as MacGregor’s white paper was transformed into a bill that limped its way through parliament over the next year and a half. Even in the moment of his victory at the polls Major had already been warned that no one was going to give him much credit: ‘I remember sitting with Chris Patten the day after the election. And he said, “You do realize that you won when you should have lost and that no one will have any sympathy or tolerance for anything that you now do?”.’
Less than six months after its election, the government descended into terminal unpopularity in the financial crisis of September 1992. On top of everything else, it was besieged by headlines about the bleak future of the privatized railway, many of them presumed to have been inspired (to the fury of ministers) by British Rail as it fought its desperate rearguard action.
FULL STAFF ‘TO STAY AT ONLY 88 STATIONS’
RAIL PASSENGERS LIKELY TO FACE RIVAL TICKET SNAG
GREEN LIGHT FOR RAIL FARES FREE-FOR-ALL
RAIL SELL-OFF ‘COULD STARVE INVESTMENT’
FEARS FOR ROUTES, FARES AND SAFETY
However, there was also one serious enemy within. In January 1993 the Commons Select Committee on Transport, chaired by the Tory backbencher Robert Adley, issued a highly critical report on the plan. Adley was a rail enthusiast and author who commanded considerable respect for his expertise on the industry; he had already christened the privatization plan ‘the poll tax on wheels’, and dissident MPs were starting to coalesce around him.
Eleven Minutes Late Page 23
