John Major’s 1992 rail privatisation White Paper promised “more competition, greater efficiency and a wider choice of services more closely tailored to what customers want”.
There have been some successes in the past two decades. The railways have never been safer, have not been as busy since 1929 (on a network half the size), newer trains, more innovation, and faster services. But the elephant in room has always been the lack of any meaningful on-track competition.
At last this is changing. Until recently large “railopoly” franchises have been allowed to emerge without them facing long distance high speed competition. Where some has been permitted (between London King’s Cross and the North East) the Centre for Policy Studies has delivered research showing that this has led to lower fares, happier passengers, more routes served and more revenue. It is clearly in the interests of passengers, the rail industry, the regions and the taxpayer.
The Office of Rail and Road has now gone further and approved new privately funded long distance high speed rail services to compete with the West Coast franchise from 2018. New Great North Western Services (GNWR) will compete for passengers from London Euston and give passengers high speed choice and fare competition when travelling to the Midlands and the North West. These competitive services are known as ‘open access’ and we need more on other lines.
The CPS research, ‘Rail’s Second Chance – putting competition back on track’ revealed passenger journeys increased by 42% at those stations which enjoy rail competition, compared with 27% for those without. Revenue increased by 57% where competition occurs compared to 48% for those stations without. Average fares increased by only 11% on those stations with competition, compared to 17% at those stations without. And ‘open access’ non franchised rail companies consistently top the National Passenger Survey on overall satisfaction and trust scoring 96% and 95% in 2014 (Grand Central and First Hull Trains).
The Corbyn and Burnham clamour for rail renationalisation is as absurd as it is flawed. Conservatives can now deliver the railway they promised over twenty years ago and further reduce Whitehall’s age-old grip on the sector. Given more freedom and encouragement the railways will show their desire and ability to deliver the best network in Europe.
Tony Lodge is a Research Fellow at the Centre for Policy Studies. He is the author of the policy paper 'Rail's Second Chance'
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