Privatization Plan For British Rail Could Be Derailed
British governments have had more than a decade of successfully selling state-owned industries. But the latest plan, to privatize British Rail, could run off the tracks.
In the fall, the House of Commons forced Prime Minister John Major to abandon a scheme to privatize the Post Office. Now, Mr. Major is having to defend his rail plan against political opposition, trade unions, and citizens' groups that charge that the captains of already privatized industries are enriching themselves at the public's expense.
The opposition to privatizing British Rail is coming from two directions.
Tony Blair, leader of the opposition, says a Labour government would renationalize the network in whole or in part. At the same time, industry analysts say it may be impossible to make the country's currently run-down rail system attractive to investors.
Richard Hope, a leading railways commentator, says Major and Brian Mawhinney, transport secretary, will be ``very lucky if they can persuade individuals and institutions that shares in the rail system are worth buying.''
Mr. Hope says he thinks that Labour's threat to return British Rail to public ownership ``will turn off many potential investors.'' Since 1979, the Conservatives have privatized British Airways, British Telecom, British Steel, the national airports authority, and most of the electric, gas, and water industries.
No more railway jokes
On Jan. 16, Major repeated his determination to press on with privatizing the railways: ``I am not content with the service we have had from British Rail. I want to remove them for good from the stand-up comedian's joke book and turn them into the envy of the world.''
But the public mood is not helping Major. The latest opinion polls suggest that two-thirds of voters oppose privatizing the railways. Many say the proposed plan is too complex. It calls for selling off Railtrack, which owns all stations and tracks, and separately selling 26 segments of the rail network, plus five freight companies.
Henry McLeish, Labour's rail spokesman, calls this arrangement ``crazy'' because there would be no guarantee that all the pieces would fit together smoothly into a functioning network.
Public unease increased sharply earlier this month when it was reported that with a privatized network, the number of stations selling through tickets to all destinations might be cut from 1,580 to 294.
This would mean that many people would have to drive 50 miles to obtain through tickets, Mr. McLeish says.
The suggested cutbacks in stations selling tickets came from John Swift. The government appointed him to regulate the rail system before and after the proposed sell-off.
Amid public uproar, Mr. Mawhinney attacked Mr. Swift's suggestion, but Swift said no decisions had been made on shutting ticket offices.
Then, in a bid to make shares in individual train companies more attractive, Swift ordered that the amount franchise-holders would have to pay Railtrack to use its infrastructure would be heavily reduced.
Chris Tarry, rail analyst with Kleinwort Benson, called Swift's move ``good news for investors'' because it would increase the chances of rail companies being profitable.