With the General Election some 12 months away, I hear that some Labour prospective candidates are suggesting the renationalisation of our railways. They claim privatisation is not working and if taken into state control, the profits could be utilised in further development of services.
This, in my view, would be a total disaster along with other crackpot ideas such as suggesting that the steel industry should be nationalised, and no doubt some aspiring politician will, in order to gain a headline, propose all road transport should be publically owned. Well, I have been in business long enough to have had the mortifying experience of working under these scenarios. I remember the days when to get bog standard steel rod from British Steel, delivery would be quoted in terms of 18 months, and at “price ruling at date of delivery” making quoting, to a large extent, guesswork.
Taking the railways, it is fair criticism to say some private companies have not been as successful as others. On the other hand, here in the Midlands, we have the extraordinary situation, whereby Chiltern Rail, which runs services from Snow Hill to London, is winning business on the basis of quality of service and journey experience. I find it amazing with all the talk of faster journeys if HS2 is built (and notice the “if”) passengers are happy to spend a little more time on a slower service. This is the product of competition, price not always the dominant consideration.
To prove the point, manufacturing companies here in the Midlands are currently winning orders back from the Chinese because of quality, delivery, and time-lag problems. Some customers will pay a little extra to get what they want.
Competition is essential in any business. It constantly pressurises companies to develop new ideas thus attracting customers to entrust their business with you. History has shown that Nationalisation does exactly the opposite because there is no stimulus to improve and create and compete. Just look at how the railway industry was decimated in the 1960s, yet today, more people are travelling by train than ever before, and still more would if only some of the long-closed lines were reopened. I hope such daft proposals will not become part of Labour’s manifesto.
* Russell Luckock is chairman of pressings firm AE Harris
