The Age of Major
While the central story of British politics in the seven years between the fall of Thatcher and the arrival of Blair was taken up by Europe, at home the government tried to continue the British revolution. After many years of dithering, British Rail was broken up and privatized, as was the remaining coal industry. After the 1992 election it was decided that over half of the remaining coalmining jobs must go, in a closure programme of thirty-one pits to prepare the industry for privatization. This depressed or angered many Tory MPs who felt the strike-breaking effect of the Nottinghamshire-dominated Union of Democratic Mine-workers deserved a better reward, and it roused much public protest. Nevertheless, with power companies moving towards gas and oil, and the union muscle of the miners broken long since, the sale went ahead two years later. Faced with a plan by Michael Heseltine to sell off the Post Office too, Major baulked. It was a service with the stamp of Royalty on it and a long tradition. His refusal was probably good for the country. Why? Because the privatization of the railways was a catastrophe.
There has long been a problem with some politicians and railways. Perhaps it was all those Hornby models in boys’ bedrooms or attics. Perhaps it was the simple romance of an industry which has beauty and complexity, which appeals to the mathematically minded in the structuring of its timetables, and to romantics in its engineering. At any rate, fiddling with the railway system became a dangerous obsession of governments of different colours. Thatcher, not being a boy, knew that railways were also too much part of the working life of millions to be lightly broken up or sold. She is said to have told Nicholas Ridley when he was Transport Secretary, ‘Railway privatization will be the Waterloo of this government. Please never mention the railways to me again.’ Yet just before she resigned, under pressure from a Treasury privatization unit with too little left to do, she began to soften, and rail privatization was taken up by John Major with gusto. Trains! What could be more fun? Was not old-fashioned, curled-sandwich-serving, rail accident prone British Rail a national joke? Could not any reforming government worth its salt, brimming with nostalgia for the old days of brightly painted trains run by private companies, do better than that?
The problems with selling off an elderly, loss-making railway system on which millions of people depend, are obvious. If your first aim is to raise money, then you have to accept that fares will rise briskly, and services may be cut, as the new owners try to make a profit. This will make you less popular. If, however, your aim is to increase competition, just how do you do that? Each route has only one railway line. Different train companies can hardly compete directly, racing each other up and down the same track. Do you give up on competition and sell off all of British Rail as a single unit? The Conservatives decided against that which left them essentially with two options. They could cut up BR geographically, selling off both trains and track for each region, together, so that the railway system would end up looking much as it had in the thirties. Competition would not be direct, but it would become clear that, say, the Great North Eastern operator was offering a pleasanter and more efficient service than the company running trains to Cornwall and Devon, and in due course one might lose, and the other gain, market power. Licences could be revoked, or there might be takeovers. Alternatively, the railway could be split vertically, so that the State owned the track, some companies owned the stations, and others the trains. This could be called the Complete Horlicks option.
Under Treasury pressure to produce the maximum competition and revenue, the new Transport Secretary, John MacGregor, chose it. A vastly complicated new system of subsidies, contracts, bids, pricing (of almost everything), cross-ticketing and regulation was created, topped off when late in the day, it was decided to sell off the nation’s railway tracks separately to a single private monopoly to be called Railtrack. Suddenly to get across the country could become a complicated transaction, involving two or three separate train companies. They would not, however, be left to get on with it in a new market. Trains were too important for that. A Franchise Director would be given powers over the profits and pricing, including ticket prices, of the new companies and a Rail Regulator would deal with the track. Both would end up reporting directly to the Secretary of State so that any public dissatisfaction, commercial problem, safety issue – indeed, almost everything – would be back in the lap of the politicians. If this was privatization, it was a strange and possibly pointless one, which would end up costing the taxpayer far more than old-fashioned, much-mocked British Rail. The historian of this curious tale, Christian Wolmar, dubbed it ‘the poll tax on wheels’. The writer Simon Jenkins, who had sat on the British Rail board, concluded: ‘The Treasury’s treatment of the railway in the 1990s was probably the worst instance of Whitehall industrial mismanagement since the Second World War.’