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Light At The End Of The Chunnel

New Ground 65
Summer 2003

Continental European railways are improving all the time, says Jonathan Bray. Shame about ours.

It's hard not to be depressed about what's happening to Britain's railways. Although public subsidy for railways is running at record levels of £3bn a year, which is £1.5bn more than British Rail ever received, investment in new projects is to be slashed, performance is shabby, services are being cut and fares will almost certainly continue to rise.

Why are the railways retrenching when their subsidy is higher than ever? Simply because you would be hard pushed to invent a less efficient way to run a railway than the structure the Tories bequeathed. A job that cost BR £1,000 to carry out now costs the privatised railway anything from £2,000 to £10,000.

Despite the army of bureaucrats employed by the Strategic Rail Authority and the Office of the Rail Regulator, nobody appears to know for sure why costs have soared. Worse still, they don't seem particularly interested in finding out. After all, by and large, these are the same compromised ideologues that gave us privatisation in the first place, and therefore continue to insist that the emperor is magnificently attired. However, from what we can piece together, rising costs seem to arise from a combination of too many interfaces, too much profiteering, too many conflicting interests, too much buck passing and a health and safety regime that is more bureaucratic than it is effective.

In Europe, it's a different story. Although European Union countries have been forced by EU legislation to create "internal markets" on their railways, nobody has gone anywhere near as far as we have. Indeed Europe's best railway - Swiss railways - not being part of the EU - has ignored the free-market fundamentalists and continues to run its railways as a unified company, with record punctuality, public approval and levels of investment.

Across post-war Northern Europe, most countries have kept faith with their railways despite the rise of the car. In the last couple of decades, as concern over traffic congestion grew, European railways have built on a secure base to go on the offensive, with wave after wave of investment in both urban and inter-urban systems. Poster boy for the rail renaissance is the high-speed train. The opening of TGV Med in Summer 2001 meant that TGVs can now speed from the Channel to the Mediterranean in just 4.5 hours. Over the border, Deutsche Bahn has just opened its latest high-speed route, from Koln to Frankfurt, enabling sleek new ICE 3 trains to barrel along at 200 kmh. Goodbye competition. In both France and Germany it is a policy objective for high-speed rail to wipe out internal flights. Now European railways increasingly work hand-in-hand with national airlines: the airlines do international travel and the railways do what were domestic flights.

Another key European trend is the 'regionalisation of local rail. Across Europe, funding and responsibility for local rail networks are being handed over to regional and local government. France is a good example. In 1997, responsibility for local rail services was devolved in seven out of 20 French regions. By 1999, in the seven pilot regions, services expanded 12% and ridership grew 12.4%. In those regions where SNCF was still in charge, ridership growth was less than 7%. As a result, all French local rail services will now be regionalised.

A similar pattern can be found across Europe. By May 2000, 3,500 kilometres of German regional lines had been transferred from the state railway to the local sector. Already by January 1999 there were 165 independent operators. Some of these are not-for-profit companies owned by regional and local authorities, others are commercial companies which operate services on a franchise basis for the local authority. Funding was also transferred. More than 14bn marks of federal funding were passed to the Landers to fund regional public transport. Karlsruhe is another good example of what local control can achieve. In Karlsruhe, high-quality trams now use former rail routes (and in some cases share existing heavy rail lines) to access city streets. The municipally owned system prices its monthly season tickets to match motoring costs. Some 40% of city centre trips have shifted from car to tram, raising public transport's share of those trips to 50%.

Why does regionalisation work? Because operators - be they public or private - are more interested in their trunk routes than they are in their local services. Whereas for local authorities, developing local rail is key to their wider transport, economic, environmental and social inclusion strategies. What's true for continental Europe is true for Britain, where local authority-controlled Passenger Transport Executives have done a good job with limited resources and powers. But Whitehall has been reluctant to let go, which means we have the absurdity of both the Greater London Authority and the Welsh Assembly having next to no real power over their local rail services.

Not everything in Europe is better. The French TGV network is fabulous, but frequencies on other routes are sometimes nowhere near as good as you would get on an equivalent British line. But European railways are mostly more modern, affordable, reliable and integrated. For a brief moment in 1997, it looked as if Britain's railways might begin to catch up. But the government's hapless timidity on rail reform, allied with the rail industry's refusal to recognise that the post-privatisation structure was unworkable, combined to cripple the railways. Even with further structural reform, it could be years before the industry can get its costs down, making the railway a target for Treasury hawks.

Is there light at the end of the tunnel? Yes, from the French end of the Channel Tunnel. In Britain, for the time being, the railways have had their chance. The politicians and the free-market ideologues have blown it.

Since writing this article in a personal capacity, Jonathan Bray has been appointed Assistant Director of the Passenger Transport Executive Group.