Link to this page: https://www.socialistparty.org.uk/issue/227/9219
Son of Railtrack: Nationalisation - But Not As We Know It
RAILTRACK'S DEMISE was a fitting end to its whole shameful history of sleaze, incompetence and worst of all accidents which killed and injured many passengers and rail workers.
Bill Mullins, Socialist Party national industrial organiser
With breathtaking arrogance, the City of London and many financial commentators in the press demanded that "poor shareholders" be compensated. If not, they argued, shareholders will refuse to have anything to do with New Labour's future plans for private sector investment into public services.
These same people are the first to demand that social welfare payments should be taken off the "undeserving poor and welfare scroungers".
Now they want and expect to get taxpayers' money (read workers' money) for the black hole that Railtrack got itself into.
Of course they don't offer to pay back to the taxpayers the handouts that they got as shareholders over the last few years - estimated at £700 million. The Railtrack board awarded the shareholders £88 million in October just before they were declared bankrupt.
A turn to the left?
New Labour are desperate to avoid being accused of "re-nationalisation" but for the "shocked" city investors this is what it is. The financial pages of the Independent (10 Oct) called it "confiscation".
Has the New Labour government taken a turn to the left? Has it, in effect, re-nationalised Railtrack?
The government has declared that Railtrack's successor will be a "not for profit trust" (dubbed Newtrack) with a "financial cushion provided by a loan facility promised by the government". This "cushion" will be "up to £1 billion" available through the Strategic Rail Authority.
Byers, the transport secretary, is now likely to offer ex-Railtrack shareholders "bonds" in "Newtrack" in an effort to head off legal action by the big institutional investors.
Despite all this financial juggling The Independent points out that this will mean in effect "that the government will always have to provide the new company with sufficient subsidies to pay interest to its bond holders" (22 Oct).
Based on this it seems likely that Byers is preparing to give the big institutional investors a guarantee of continued payouts of taxpayers' money, whilst at the same time guaranteeing that the state will always ensure that the trains are kept running.
New Labour have not take a sudden lurch to the left. They have done what previous governments have done, both Tory and Labour. When faced with a major crisis of a key part of the British economy which, if allowed to collapse, would cause major damage to the profits of companies, they have implemented "state capitalism" - nationalising for the benefit of the profit system as a whole.
In 1971 the Tory government was forced to nationalise the bankrupt Rolls Royce aero-engine company because of its importance to the defence industry as a whole. Railtrack shareholders can be 'sacrificed' in the interest of other private companies who depend on rail transport, including for getting their workers to their place of work.
Of course we welcome the ending of private ownership of Railtrack. But we would go much further and demand that the whole of the rail industry, including the 20 or so train operating companies, are also taken out of private ownership and brought back into the public sector. Otherwise the new company will become a bottomless treasury for the private train operators to subsidise their profits.
We are totally opposed to the government handing over any more cash to the private owners of Railtrack. Instead we demand that if individual shareholders depend on their shares as a means of keeping their heads above water then they should be "means tested" to prove it just as those who seek state benefits have to at the present time.
Railtrack workers who were given shares in lieu of wages should of course be compensated including protecting their pension benefits.
A worker paying towards his or her occupational pension scheme is in effect deferring a part of their weekly wage to the day they retire and are entitled to reimbursement. That is not the case for the fat cats who were only too willing to take the profits in the form of share dividends when they could.
The state now owns Railtrack. The government will appoint the ten to fifteen directors who will run the "not for profit trust" board as well as the "supervisory board" above it, just as they do with NHS trusts.
There will be no private shareholders who will go along to annual company meetings and elect the board according to the amounts of shares they own.
What happens now of course with any private company is that the big shareholders don't bother turning up and cast their block votes by proxy whilst the little shareholders who attend the AGM will moan but have no power to change anything.
The Treasury will decide the amount of money it will channel annually to the trust through the strategic rail authority.
So, despite Byers' attempts to set as much distance as possible between the New Labour government and the day to day running of the railways, the angry commuter waiting in vain for the 7.54 am train to Waterloo will increasingly blame the government when it doesn't turn up.
The rail industry will continue to be starved of proper investment by a Treasury that will see its income from workers' taxes and other forms of taxation suffer a dramatic fall as the recession hits and people lose their jobs.
A Socialist Programme For Rail
AS SOCIALISTS, we demand that the rail industry be properly funded and investment is put in to ensure that rail safety is the number one priority, including the rapid fitting of the train stopping system that ensures no more Ladbroke Groves take place.
Rail workers are the real experts on the industry. They know where investment is required to ensure proper safety and the efficient running of the system.
The rail unions must have a major say in the running of the industry. That means direct representation on the board of a wholly publicly owned rail industry.
We don't want fancy worker directors on obscene levels of pay who are not directly answerable to the workers as Byers seems to be proposing. Instead they should be directly elected by the workers through their own union structures with the wages of an average railworker.
If they fail to represent the real interests of the rail workers they should be brought to account and removed if necessary to be replaced by others who will.
The working class as a whole must also have a direct say in the industry. This is the section of society which has no financial interest in the return on capital invested but does have an interest in creating a system to meet the needs of the population as a whole.
The trade unions are the mass organisations representing the working class. They, along with consumer groups, passenger groups and others, including political parties which fully support the concept of public ownership, should have representation on the rail board.
It is clearer than ever before that a democratic socialist transport plan needs to be introduced to ensure the integration of all forms of public transport, including rail, the bus industry, air transport and London Underground.
The Socialist would welcome your views on this issue.
In The Socialist 26 October 2001: