With government plans to bring all rail services under public ownership by 2027, GWR will be renationalised within the year.
With government plans to bring all rail services under public ownership by 2027, GWR will be renationalised within the year. Great Western Railway connects London to West England, Southwest England, and South Wales, and is a hugely important railway provider. Ticket prices and delays are increasing and so is public frustration. The government believe nationalisation will restore the rail to its former glory but critics question whether public ownership will deliver.
The railways were first fully nationalised in 1948, bringing the key four private railway companies under state ownership to form British railways. Railways were then privatised in the 1990s. In theory this was to increase efficiency and investment by liberalising the rail network. The decision also aimed to reduce the burden on the taxpayer. However, with prices higher than ever, increasing by 5.1% this year, some may question whether the burden really reduced or was just replaced with a different one.
With these failings in mind the government have decided to flip flop once again. By 2027 the majority of rail operators will be unified under a name suspected to be Great British Railways… not a big difference from its previous name, however hopefully it will be more successful this time.
If it were to be successful there’s a few key ways in which it would show. With Great British Railways acting as an integrated network, coordination would be much easier whether that be for timetables, ticketing, or maintenance. When anything is brought under public control the motive behind the decisions being made changes from profit to public benefit. One manifestation of this could be that rather than profits being given to shareholders, they would be reinvested into infrastructure and technology. These are especially important for rail networks which are so reliant on capital goods that are constantly depreciating. Furthermore, the rail’s privatisation will have led to short franchise cycles which in turn cause instability. The stability provided by public ownership will foster long term investment whether it be new lines, enhancing current tracks or just generally improving the network. The government will also be held accountable for ensuring these improvements occur, especially by the opposing party.
Unfortunately, there are no guarantees this would all occur. Before the government even regains control of the railways, they are faced with the costs of buying out the private operators. Even though infrastructure is already publicly owned, taking on the liabilities of these firms and buying them out of their contracts early will be very expensive for taxpayers. These upfront costs are challenging especially with how strained the budget already is. When anything is brought under government control, there is an innate risk of political maximising and regulatory capture. Especially with the current political climate where parties are unlikely to stay in power for several terms, it is likely that politicians will make decisions that are popular rather than productive. Cutting fares will be popular but could result in worsening of the services provided. This is particularly worrying when combined with the inevitable reduction in competitiveness that occurs when switching to a nationalised service.
The move for UK railways brings a key debate back onto the minds of politicians, economists, and the public. Who should oversee public goods, especially quasi-public goods? Many countries that share similar ideologies such as France have a successful publicly owned rail network, but Germany also run in this way and have a reputation for severe delays. The nationalisation also represents a deeper shift in the mindset of the UK. People’s awareness of the fragmented, inconsistent, inefficient railway system currently operating has created desire for change. There is no guarantee that nationalisation will fix some of the more systemic issues – if the rail system is simply being overcrowded the reality is under the current budget, there isn’t enough money to implement the necessary changes. However, the people want change. They want better, and renationalisation at least gives us a chance of it.