A Ray of Hope – The End of Rail Franchising

Milad Sherzad discusses the national rail network. 

Just recently, the Government took a monumental decision and ultimate compromise in what appears to be an end to the rail franchising scheme, a staple in British politics since the era of John Major. A quick history lesson will tell us that after Major privatised British Rail network, separations were made between the service providers and the infrastructure owners, with Railtrack taking the latter. Travel during the 90s may have improved, albeit marginally, but was marred by the Hatfield Rail Crash in 2000; it uncovered many safety overlooks within Railtrack and ultimately led to its demise. For many years after, renationalisation was a policy mentioned in conversation but never really pressed against a government. Only during the last 4 years or so have we seen genuine traction behind a renationalisation movement, with the policy featuring in the Labour manifestos of the last 2 elections. Despite a decade of Tory rule, we have seen small compromises already with the rail network: temporary nationalisation, on multiple occasions, of the East Coast Mainline has highlighted the success of the operation of a state owned railway; just a few months ago, we saw the nationalisation of Northern Rail, one of the important stepping stones in moving towards a fully nationalised rail network.

And this brings us up to the present day, where we have seen the Government make the decision extend the Emergency Recovery Measures Agreements scheme (ERMA), a system, introduced in March, which suspended the normal mechanisms of franchise agreements, transferring all revenue and cost risks to the government; with operators continuing to run services by a small, predetermined management fee. While not being complete nationalisation, it most certainly paves the way towards a better system; not only this, but it highlights and cements the fact that this Government is willing to compromise on policies we would never had expected them to flinch on. This decision will, I’m sure, lead to better conditions for consumers of the rail network as Train Operating Companies (TOCs) will no longer have to be entirely financially centric as their financial risk is covered by the Government and this means that they can finally operate at a point of efficiency that best compliments the needs of the population. Further to this, we are at a point where, employment wise, we are seeing a shift towards working from home and the general demise of the busy commute. Naturally, it seems illogical to lease out rail networks, which have a fair dependency on commuters, to firms that have the incentive of profit maximisation, when passenger numbers are so low and volatile. By bringing these networks into the Government’s financial picnic basket, there’s a better guarantee of stability in the network and an overall improvement in rail services.

Now, we must look at this decision from the lens of critical policy making: was this a tactical move by the Government to seem more mature, or did they truly wish to change the system in view of its failures? This Government is not exactly the smartest when it comes to political decisions, *cough* Dominic Cummings in Durham *cough*, but I no doubt feel it played a part in this decision. By seemingly compromising with the opposition over the matter, the Government could be seen as more mature in taking the hit on their views and this sign of maturity is not to be swept under the carpet. Regardless of whether it was political clout, this is a positive step in showing how this barbaric Government is finally developing a functioning relationship with the opposition. Even though I am not a natural supporter of the Government, this is such a promising step because, if we see a Government actually bowing down and compromising to views of the opposition, we see a more active and more responsible parliamentary system where good policy and decisions actually filter their way into law. With this, I close by saying that we may see other industries, especially those hit worst by Covid-19, being nationalised and we may also begin to see this Government finally grow up.

Milad Sherzad is a student at the University of Edinburgh currently about to enter the 2nd year of an Economics and Politics degree. Within politics, his main passion lies within Transport and everything linked to it. He also enjoys aspects of national economic policy and developmental economics.

He tweets @milad_sherzad.












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