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20 years on: the scam of privatisation

4 March 2013

This January marked the 20th anniversary of the introduction of legislation allowing for the break up and sell-off of British Rail.

 

The measures, which finally made it through Parliament in November 1993 can now be clearly seen as one of the most scandalous and wasteful acts of vandalism against public services carried out by the last Conservative government.

Each of the above claims by the Prime Minister of the day, John Major, proved to be false. Assets were chronically undervalued in the rush to sell them off as fast as possible. The Porterbrook rolling stock operator was privatised for £527m yet just six months later was sold on for £825m – a tidy £300m profit for half a year’s ‘risk’ of guaranteed profits. Whilst the sell-off was a disaster all round, the process gave huge windfalls to shareholders and didn’t even maximise the short-term gain for taxpayers – Railtrack was privatised for £1.9bn but just
three years later had a market value of £7.8bn.

Far from remaining ‘broadly similar’ as Major claimed, taxpayer subsidy has gone up fourfold, up from £930 million to £3.8 billion per year, whilst fares have more than doubled, up over 102 per cent since 1995.

TSSA planned to run a somewhat cheeky press advert on the anniversary, noting ‘It wasn’t just Edwina who John Major screwed – he also screwed our railways and millions of passengers’. After this was banned by the advertising regulator, the ensuing coverage raised the disaster of privatisation without the Association actually needing to run the advert!

The Association will be using the anniversaries of the later stages of the legislation to further raise just how badly the experiment of privatisation has failed. You can help spread the message of the campaign by highlighting the facts above in a letter to your local paper.

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