IF YOU could find a time machine and set its dial for spring 1997, you would arrive at a time when the first round of rail franchising had just been completed.
The Conservatives were determined to complete railway privatisation before the General Election (because they had a gloomy presentiment that Labour would win, as indeed it did), but it was a close-run thing. The last franchise (ScotRail) began on 31 March 1997, even as the election was already under way. When the vote was held on 1 May, Tony Blair’s Labour Party romped home.
But in spite of a great deal of huffing and puffing from the opposition benches before the election, nothing was done by the new Labour Government to reverse a process which had begun with the 1993 Railways Act.
In its Annual Report for 1996-97, the Office of Passenger Rail Franchising wrote that ‘on the whole, the signs are encouraging’.
The same report also provides details of every franchise, and its premium/subsidy profile. In fact, in the early years at least, there were almost no premiums. Only Gatwick Express was profitable from the word go — all the other TOCs received subsidies.
The idea, of course, was that Railtrack (which had also been hastily launched on the choppy seas of the private sector by the Tories while there was still time, and we know what came of THAT) would earn enough in track access charges to keep afloat, and therefore TACs were higher than they are now.
Since then the rules have changed again and again. Operators now pay less in TACs, but more (theoretically) in premiums to the Government, which in turn pays grants to Railtrack’s successor Network Rail.
This might be all fine and dandy up to a point, but this process (which could be called money-laundering by uncharitable people) has been accompanied by an almost insatiable hunger by the DfT and HM Treasury for higher and higher premiums. In other words, the system which worked (more or less) in the mid-1990s has been so distorted that the whole thing may now (to continue the metaphor) be dangerously unseaworthy.
Even worse, by the time the West Coast bids were being assessed, the DfT was getting so excited about its voyage to Treasure Island that it failed to notice (in spite of warnings from Cap’n Branson) that it had lost the charts and dropped the oars overboard.
Thus, in the grip of the tide and under a looming lee shore, on the rocks it went. The only remaining questions now are who the survivors might be, and what can possibly be salvaged.
Some people (Lord Bill Bradshaw is one) are arguing that the present franchise system has been wrecked irretrievably, although the Government declines to be so gloomy.
But this is the same Government which still maintained, even in the teeth of a rising gale of doubt, that all the West Coast calculations were ‘robust’, having apparently overlooked the foundering of the SS National Express East Coast and her proud predecessor SS Great North Eastern Railway.
At least SS West Coast was never launched, but it remains be seen what can possibly be devised as a replacement. We might, indeed, have quite a long wait on the quay, and when the alleged solution eventually does come alongside, prudent passengers will count the lifebelts before stepping aboard.