Why re-privatise East Coast?

Just what is the point of re-privatising the East Coast railway operator?

East Coast is the state-owned inter-city train operator on the main line from London King’s Cross to Yorkshire, the North East and Scotland. It is due to be re-privatised this month.

Along with the rest of British Rail, the service was originally privatised in 1996 but it had an unhappy history in private hands. The first private operator was Sea Containers trading as GNER, but it was stripped of the franchise in 2007 due to financial difficulties. The franchise was then awarded to National Express, which lost the franchise two years later when it refused further financial support to its National Express East Coast subsidiary.

The franchise was re-nationalised in 2009 under the East Coast banner. This was always intended as a temporary measure, so a return to the private sector comes as no surprise. That is not the issue.

As Rachel Graham points out at OurKingdom, the issue is that East Coast is outperforming other operators and providing far better value for money:

The coalition government re-iterated their intentions to re-privatise the East Coast mainline rail network this month. This despite a new report by the Office of Rail Regulation (ORR) showing the line as the most cost efficient. The Financial Times stated that the report proves the East Coast line is “the most efficiently run rail franchise in terms of its reliance on taxpayer funding”.

The ORR report shows the East Coast line required the lowest level of government funding as a percentage of total income, at just 1.2%, a mere 0.2% of the overall share.

The irony of Britain’s privatised railways is that they receive far more in government subsidy – both in real terms and as a percentage of overall income – than British Rail did before privatisation. And this higher subsidy is being provided despite growing passenger numbers.

It is unclear what concrete benefits privatisation of East Coast would bring. The burden on the taxpayer is unlikely to go down. There can be only two possible motives. One is a dogmatic belief in privatisation regardless of the consequences. The other is a scorched earth policy, a desperation to privatise East Coast before the Tories lose the next general election (similar to John Major’s original privatisation of the railways ahead of the 1997 election). These two motives are not mutually exclusive.

Private good, public bad?

For more than thirty years, we have been taught to believe that the private sector is automatically superior to the public sector. Another mythbuster by nef (the new economics foundation) demonstrates the falsehood of this dogma.

For Liberals, the point is the distribution of power and the human element. The private and public sectors can both be well or badly run. They are equally capable of remoteness, alienation, bad service, waste and incompetence.

As Britain’s experience with the railways demonstrates, privatisation is no guarantee that things will improve. Furthermore, when politicians repeatedly tell public sector workers such as teachers or nurses that they are rubbish, it hardly works wonders for the quality of public service.

Few push the dogma of nationalisation anymore. No one should push the dogma of privatisation either. The guiding principle should be to put people first, which is why social liberals prefer voluntary, mutual, cooperative and social enterprise models to private or state monoliths. As David Boyle points out on his blog today, we should be exploring ways to enable local communities to develop and run their local economies and local services, instead of pushing them into dependence on large organisations.

Transferring bus services from the National Bus Company to Stagecoach, or care homes from the council to a big private operator, fails to address that need. So there is no reason to believe that a private monopoly is somehow morally superior to a public one.

Goodbye RAF, hello Bristow’s

So now search and rescue services are to be privatised. I thought the point of privatisation was to offer more choice but the Bristow Group has bagged the whole lot for £1.6bn. If you need rescuing, it will be Bristow or nothing.

What will the new service be like? If a ship is sinking off the British coast and a sailor makes a distress call, the response may sound like this:

Automated voice: “Thank you for calling Bristow Search and Rescue Services. Please wait for all of the available options before making your next selection. If your ship is sinking, press ‘1’. If you are already in the sea and drowning, press ‘2’. If you are dangling off the edge of a cliff, press ‘3’. If your child is floating away from the beach on a pink inflatable dinosaur, press ‘4’. If you are stupid enough to go mountain climbing in the middle of winter, press ‘5’. For all other services, press ‘6’. To hear this menu again, press ‘7’.”

The sailor in distress, despite being lashed by torrential rain and hurricane-force winds, just about manages to press ‘1’.

Automated voice: “Hello, you have reached Bristow’s Search and Rescue Services Customer-at-Sea Department. All of our customer service representatives are currently busy with other calls. Please stay on the line, and one of our representatives will answer your call as soon as possible.”

There then follows what seems like an eternity of Vivaldi’s Four Seasons.

Automated voice: “All of our customer service representatives are still busy. Please continue to hold for the next available representative.”

More Vivaldi.

Automated voice: “We are sorry to keep you waiting. Please hold. Your call is very important to us.”

Yet more Vivaldi.

Automated voice: “In order to ensure quality service, your call may be monitored. Please hold. Your call is very important to us.”

Even more Vivaldi.

Automated voice: “We believe you deserve the best service. Please don’t hang up. Someone will be right with you.”

By this stage, there is a serious danger that Vivaldi will run out of seasons.

Finally, a real human being comes on the line, speaking in that cheery sing-song tone used by hotel chain receptionists:

“Hello, this is Bristow Search and Rescue Services. How may I help you? [silent pause] Hello caller? Caller...?”

Postscript: More ideas are coming in for Bristow’s customer relations.

People needing rescue could be offered more choice:

• Those lost on a mountain top can choose the hot air balloon rescue complete with a Mother’s Day hamper option.
• “Please specify your helicopter size: S, M, L, XL.”

And potential customers could be enticed with these offers:

• “Rescue two adults and the kids come free!”
• “For the best prices, book your rescue well in advance.”

Finally, satisfaction is guaranteed:

• “If you are not entirely satisfied with your rescue, please return it to us within 28 days and we will deposit you once more in jeopardy with no questions asked.”