Riding Britain's Last State-Owned Railway Line

This article originally appeared on VICE UK.

Ever wonder where all the money goes when you have to buy a last-minute train ticket to the opposite end of the country and it costs as much as a return flight to a European capital? Britain has some of the worst and most expensive train services in Europe. In nearly all cases, a lot of the money charged goes into the pocket of the boss of a private rail contractor.

East Coast is the UK's only state-owned train operator, but not for long. In March, Transport Secretary Patrick McLoughlin's decision to sell East Coast back to private hands will take effect. The franchise and its government subsidiary Directly Operated Railways (DOR), will be handed over to its new owners, Intercity Railways, a conglomerate of Stagecoach and Virgin.

The sale has elicited shouts of Tory ideology over practicality heard over the noise signal failure announcements and buckled tracks. More to the point, the question here is, "if it ain't broke, why fix it?"

There's ample reason to object to East Coast trains chugging back into private hands. The Department of Transport had to step in and take control of the line in 2009 after National Express announced it would default on its contract. So it seems strange to now give a good business model back to the sector that failed a few years ago.

East Coast is irrefutably successful as it is. The operator has achieved remarkably high customer satisfaction since becoming state-owned: 91 percent, according to this report. Another survey indicated a more modest 59 percent satisfaction rate, but that was still the fifth best in the country. It boasts strong revenue figures, too: the Office of Rail Regulation heralds it the most efficient in the country.

"This is a fantastic deal," is McLoughlin's response to the objections. I hopped on a 1:30pm train from London King's Cross to Peterborough to see for myself what's at stake and meet some of the passengers who are, according to McLoughlin, being put "at the heart of the service" by the privatization.

My train departed on time, which was not a certainty given the delays of so many operators—a third of British trains were delayed last year. Unlike punctuality, one of the few things the British railway traveller can rely on is above inflation ticket price rises, which happen every year like clockwork. Prices have gone up 20 percent during this Parliament.

The difference with East Coast is that currently £200 million [$300 million] from expensive tickets and overpriced cups of tea on East coast goes to back to the tax-payer rather than making a profit for some Dutch and German firms. This is a crucial point: private rail franchises work for a select group of shareholders; East Coast, on the other hand, coughs up for the public.

A review of the industry's 2013 finances underlines what the country is missing out on. Northern Rail, for example, paid £36 million [$54 million] in dividends to its owners after receiving government subsidies totaling £713 million [$1.7 billion]. Another company, Transpennine, returned £21 million [$31 million] in dividends to its owners, having received £52 million [$78 million] in subsidies from the government.

Perhaps it's unsurprising then that there's a campaign to keep East Coast as it is; a YouGov poll noting that 66 percent of people want it to remain in public hands. Some even believe making re-nationalization a key part of Labor's 2015 manifesto might help swing an election victory.

"The jewel in the crown of the rail network is the East Coast," Jon Rogers, a professor at Dundee University and frequent user of the service told me as we trundled along. He's utterly aghast at the government's move. "I for one am a fan. The thought of privatizing this service raises January blues to a whole new level. What we should be doing is learning from how well this worked and taking these lessons into the rail network as a whole."

The We Own It campaign is one of the most prevalent champions of the cause and echoes the thoughts of Prof. Rogers. It mentions the Rebuilding Rail Report, which states the cost of running the railways has more than doubled in real terms since privatisation. It's risen from £2.4 billion [$3.6 billion] during the five-year period from 1990 to 95 to around £5.4 billion [$8 billion] per year during 2005 to 2010.

It even carried out research with Corporate Watch, which found that we could save £352 million [$528 million] by bringing the railways into public ownership—it says that's £13 [$19] per UK household. They come to this conclusion by earmarking "lower borrowing costs for government-financed investment, and the elimination of shareholders dividends."

We swept past foggy fields before the service trundled into Peterborough. It's a station that holds a certain significance in the argument over Britain's troubled network.

As the general election looms, Labor will likely use high fares and delays to justify a conversation about partially re-nationalizing the railways by allowing a government owned franchise to compete wit private companies for rail contracts. Andy Sawford, MP for Corby and East Northamptonshire, proposed the bill in October. He cited the Peterborough in his reasoning: "East Coast shows that a public option can work on our railways. Every penny of profit that they make has been reinvested back in the service, including a £3.3 million [$5 million] upgrade to Peterborough Station in 2012, to which East Coast contributed £1.3 million [$2 million]."

On the platform at Peterborough, a temporary member of staff gave me his thoughts. "I know a lot of people are concerned," he said. "East Coast is a good service. I doubt much will change initially, but after a while things might trickle down. I suppose ticket prices could go up by a fiver at some point."

Of course, there are arguments that privatizing East Coast is a great idea. The consortium buying it says while service may be good, it could be better. The London to Edinburgh line will be, "transformed by more seats, more services, [and new] new trains," they say.

Meanwhile the Economist insists that railway conversation is "not that singular." "Although it is one of the most successful long-distant routes, other lines are more profitable than the East Coast," it points out. First Capital Connect and South West Trains are said to bring in more money. Chiltern Railways was in ruins when it was state-owned, but since moving into private hands, has flourished. The growth seen in British railways just wouldn't have happened under public ownership. The vast increases in passenger numbers and investment across the network are a product of big business—so the argument goes.

But looking at the rest of the UK's privatized rail network it's hard to be anything but cynical.

While I waited for my return trip, I sat in the ubiquitous Pumpkin café, scouring for snacks. I settled for a frighteningly hot tea and with it in hand I spoke Michael Andrews, who turned out to be a PhD student at MIT in the US. He'd been back for Christmas in somewhere called Oakham. He shared my skepticism. "East Coast seems to be one of the few operators here that works properly," he said. "I don't know the full situation here, but it looks like this is the simplistic ideal of business over people. In a way it's strange the government's changing things when East Coast is working well."

Soon I was back on the service back to King's Cross, the 16.30, again not late. I chatted to Margaret Bradshaw by the baggage rack. She regularly uses East Coast to visit her son in the capital. "I think the whole thing is ridiculous," she said. "East Coast makes a profit. Why are they bothering selling it? I don't understand. I think it's partly down to responsibility—they don't want it. And they want to privatize most things really, don't they? It's the next in a long line. And Virgin and Stagecoach—well. I've used them before. It makes no sense."

Pulling into King's Cross, I reflected that while my study may be less than scientific it seems that while Britain's last remaining public rail operator is about to be sold to the private sector, there's some way to go before customers are sold on the idea.

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