Govia is contracted to run the Southern franchise - and is paid about ￡1 billion (or $1.24 billion), a year by the government to do so. In return, revenue from ticket sales goes directly back to the government. Yet if train services are delayed or canceled, it is the government - or rather, the taxpayer - that refunds the bitter commuters. The company itself therefore has no incentive to settle with unions；arguably, it is being paid by the Tory government to keep up the fight. Yet the transport secretary, Chris Grayling, pretends to have no hand in the matter, saying he cannot “wave a wand” to resolve the dispute.
Little wonder that a recent poll found that 58 percent of Britons believe rail privatization is a complete or partial failure, with only 13 percent describing it as a partial or complete success. A 2013 report commissioned by unions, “The Great Train Robbery,” found that British taxpayers spend far more on the privatized system than they did on the old nationalized model. Part of the reason for that is that the government subsidies built into the system in large part end up as dividends for shareholders, rather than being invested in upgrades.
Would public ownership achieve better results? As the right-leaning Daily Telegraph recently pointed out, when a troubled private rail franchise run by a company named Connex was taken into public ownership from 2003 to 2006, performance, punctuality and passenger satisfaction all improved. Similarly, after the East Coast network was renationalized in 2009, it became the most efficient rail franchise in Britain, needing less public subsidy than any other and returning hundreds of millions of pounds in revenues to the public purse. To complete the experiment, when it was again privatized in 2015, ticket prices on some journeys doubled and public satisfaction declined. Not that public ownership has been banished from Britain's railways - but only other European governments are free to buy up Britain's rail networks. Foreign governments running British railway networks include France, Germany and the Netherlands. The important difference, of course, is that foreign state-owned
companies are not accountable to British passengers (as a nationalized company is to British voters).
Considering all the humiliating failures, why have successive governments - both Conservative and New Labour - continued to pursue privatization with such unbending zeal? In short, to undermine organized labor. Britain has the “the most restrictive union laws in the Western world,” Tony Blair complained, shortly before winning election in 1997. And Mr. Grayling has made his antipathy to unions very clearly - blaming them for the dispute, accusing the opposition leader of fomenting strike action, and even hinting at legislation to outlaw strikes.
Britain's long-suffering travelling public is not impressed. A 2015 poll found that a clear majority of Britons supported renationalizing railways (as well as water and other utilities)；strikingly, even a plurality of Conservative voters backed such a move. This isn't a mass delusion；it's based on the experience of millions of passengers who feel ripped off and exasperated by poor service.
Beyond the “travel chaos” headlines and lost millions of economic activity, the failure of Britain's rail privatization opens broader questions that resonate beyond this country. Does it really make sense for the essential services we all depend upon to be for profit? The evidence from this two-decade experiment is a direct challenge to those who believe in the innate superiority of the private sector.
What a way to run a railroad.
