“SUCH A SILLY SCHEME”: THE PRIVATISATION OF BRITAIN’S RAILWAYS 1992–2002

This paper analyses the privatisation of Britain’s railways, starting with the original legislation and ending with the insolvency of the infrastructure owner, Railtrack. It examines the performance of the privatised system, focusing on the three key benefits which the Major Government claimed for privatisation: greater efficiency; improved quality for consumers; reduction in public subsidy. It examines the performance of Railtrack, but also considers the behaviour of government, regulators and train operating companies. Attention is given to the importance of ideology in the privatisation, and to the broader role of privatisation in government policy. The paper argues that privatisation was fundamentally flawed, as it was impossible for the system to generate sufficient profits to deal with the demands upon it. Privatisation failed in all areas as it produced an inefficient system with higher costs, poorer quality of service, and increased public subsidy.