PRIVATISATION
Bye-bye BR
Managed decline under nationalised British Rail was turned into a passenger boom by Privatisation, as Mike Jones describes.
WHEN the ‘Roads for Prosperity’ White Paper was published in 1989, which envisaged a surge in road construction, it was clear that the Government had accepted there would be a managed decline of the rail network. However, lobbying by economic and environmental stakeholders sought to influence this view by suggesting that, if the railway had access to large scale private funding, it could capture a greater share of the market.
This led to plans for rail Privatisation being published in the 1992 Conservative election manifesto which, after an unexpected Parliamentary majority was secured, were implemented by passing the 1993 Railways Act. No specific structure was included in the Act and there was debate about returning to something like the ‘Big Four’ prior to Nationalisation in 1948, or creating a track authority akin to the road network with train operators paying access charges to use it.
The decision in favour of a track authority, which became Railtrack, was influenced by European Commission policy that rail network costs should be separately identified so that new entrants to the market could be assured of equal treatment. For the future operation of services, franchised passenger operators would be created; but for freight operations it was intended that the assets needed to provide services would be sold to a range of operators and create a competitive market.
The 1993 Act provided that the secretary of state for transport should appoint a rail regulator and a director of passenger rail franchising. It also described general duties that the secretary of state and the regulator should perform to: protect the interest of railway users; promote the use and development of the network to the greatest extent considered economically practical; promote competition in the provision of services; facilitate journeys using more than one train operator; impose minimum restrictions on train operators consistent with delivering the duties imposed by the Act; and enable train service providers to plan for the future with a reasonable degree of assurance.
The Government’s 1989 White Paper‘Roads for Prosperity’,which essentially acknowledged British Rail was in managed decline with little scope for growth in either passenger or freight traffic.
Greater clarity of what was expected followed, with duties to protect the interest of users in respect of: the prices charged for travel or conveyance of goods; the quality of the service provided; persons being protected from danger and taking advice from the Health and Safety Executive; and the effect on the environment of providing railway services.
BR sector boost
The earlier advent of sector management in 1982 had improved British Rail’s financial results and there was growth on core passenger routes. But to improve rolling stock productivity, the InterCity network had been cut back, which meant reduced connectivity for several conurbations.
Electrification of the East Coast Main Line had taken place, but West Coast Main Line services remained much as they were after wiring was completed between London and Glasgow in 1974. The lack of competitiveness was such that InterCity proposed a transfer of services north of Preston to Regional Railways as part of a drive to meet profitability objectives set by the Department for Transport. A focus on investment also saw the replacement of much of the First Generation DMU fleet and a switch from locomotive-hauled services on secondary routes, particularly in Scotland.
“In the 1994/5 financial year, British Rail required £1.7 billion Government funding, the equivalent of £3.5 billion at current value”