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Which way is Labour facing on public ownership?

6 November 2012

During the conference season we saw the battle for Labour’s rail policy being played out in front of TUC and Labour Party audiences.

Facing Both Ways

Whilst Shadow Chancellor Ed Balls poured cold water on the prospects of bringing rail back into the public sector, just three weeks later Shadow Transport Secretary Maria Eagle gave a speech that, in great part, could have been delivered by one of TSSA’s leaders.

There’s clearly all to play for, with Maria Eagle explicitly calling on people to lobby other members of the Shadow Cabinet – something those either living or representing members in their constituencies should take particular note of.

Mitch Tovey

When asked by the TSSA’s Mitch Tovey, Ed Balls told the TUC: ‘When we came into government in 1997 we inherited a flawed system. The Railtrack privatisation could never have worked – the reason why I’m convinced the privatisation of the Post Office could never work is because of the experience of Railtrack.

‘The question is, should we be trying to make those contracts work in a fairer way, or should we spend, what would potentially be billions and billions of pounds taking the rail industry back into wholesale public ownership. I’m not sure if we come into government in 2015 that expenditure on that scale will be the first priority, but let’s keep working together.’

Labour’s Shadow Transport Secretary Maria Eagle told a markedly different story when she addressed the Action for Rail fringe meeting just three weeks later at Labour Party conference:

‘Only a proportion of the millions made by the East Coast since it’s been run by [the publicly owned] Directly Operated Railways would have returned to taxpayers. Most of it would have gone out to shareholders and directors. This is hundreds of millions of pounds that could be re- invested by the railways rather than leaking out into the profits of private companies. Only an ideological obsession with private profit would lead to the government choosing a return to that failed model.

‘I repeat the call today that I’ve already made to the government: abandon the ideological privatisation of the rail industry. Let’s leave East Coast with DOR, let’s enable themtodoarealjobwitha future to run that line instead of saying to them: ‘we’re going to flog it off next year.’

‘This is about making a decision in the best interest of taxpayers at a time of extreme pressure on funding. We can’t afford to be giving away public money in this way any longer. Why would you want to do it if it wasn’t ideology?

‘I believe there’s a consensus in the country that privatisation has been a disastrous failure. I believe there’s a real desire for a credible program of reform to deliver a better deal for farepayers and taxpayers. The reality is that we’re three years away from the election – we don’t know what we’re going to inherit if the public votes for us, we don’t know how many of the franchises the government will have flogged off – though they’re not doing very well so far! We’re going to face legal and financial constraints on what we can do.

‘I’m not going to make promises that we can’t keep. We need more accountability for Network Rail. We need to explore different models of the kind that work across Europe to tackle the cost of fragmentation. Devolution of local and regional services is a good thing. With the East Coast in public hands as a proper comparator, I think this is the way forward.

‘I want all of you to put pressure in the party and in your trade unions, to keep putting that pressure on us – and not only me, but other members of the Shadow Cabinet – to ensure that we can go to the country in the next election with a real rail reform agenda that will inspire people, that will give us a better service.’


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