The High Cost of Privatization: Examining Rail Franchising in the UK
Throughout the many times I have visited the UK, I am always shocked by how expensive intercity train travel is. I remember having to pay £40 (approximately $70) for a one way train ticket from Edinburgh to Leeds. For context, you can easily find a £40 round trip flight from Edinburgh to the sunny Algarve Region of Portugal with Ryanair. It mirrors a similar issue that many Canadians experience with regards to air travel, as it’s often cheaper to fly to Hawaii than to fly to Montreal during peak travel season. But why are train tickets so expensive to begin with in the UK? You have to look at the disastrous privatization of passenger rail services to find the answer.
Like many public services, British Rail did not escape the horrors of the neoliberal privatization wave that took the western world by force throughout the 1980s and 1990s. The philosophy surrounding privatization is that it would reduce the burden on the average taxpayer, and that increased competition would drive down prices. Unfortunately, the way that British Rail was privatized allowed for a state sanctioned oligopoly to thrive. This oligopoly is known as the franchising system. Under franchising, the British government divided the country into different zones, with private rail operators bidding to have unilateral operational rights over a single zone. This resulted in competition in name only, since rail operators could charge higher fees and cut costs to prioritize profit while leaving customers without much choice. Additionally, the franchising system often resulted in logistical chaos, as trains routinely were canceled or severely delayed as a result of cost cutting measures. Not to mention frequent issues of train staff going on strike, further disrupting the system.
Many of my relatives back in the UK avoid travelling by train like the plague due to its high cost and unreliability, which is a shame given that train travel is efficient and reduces one's carbon footprint. Thankfully, under the new British government led by the Labour Party, the franchising system was finally abolished earlier this year. I am optimistic that bringing the British rail system back under public control will lead to lower fares and increased reliability. But time will tell whether the train journey away from privatization will end up benefiting the British public.
-Written by Alex Cooke
Sources:
https://finance.yahoo.com/news/explained-end-rail-franchising-system-053513614.html