Thursday, 10 October 2019

Tory rail privatisation and the secret £50 billion+ black hole of debt



When Britain's rail network was privatised in 1994 not only were the routes chopped up into a confusing mess of different franchises, the tracks were carved off into a separate private company called Railtrack.

Railtrack didn't last long because their sickening business model of minimising maintenance and repairs soon led to a number of serious rail crashes, with the Hatfield crash (4 deaths, 70+ serious injuries) being the final straw that eventually led to the renationalisation of the tracks.

Letting a bunch of profit-obsessed shysters run the rail network into a dangerous state of disrepair in order to maximise their profits was an absolutely dreadful idea, so Railtrack was renationalised and rebranded as Network Rail in 2002. Since then the number of serious accidents on the UK rail network has fallen dramatically.

The problem of course is that the cost of maintaining the rail network to decent safety standards and funding upgrades to the system massively exceeds what Network Rail receives in government subsidies and rent from the profiteers who run the privatised rail franchises.

If Network Rail increased their prices to cover the true cost of maintaining the tracks and upgrades to the system, the franchise profiteers would never be able to run their franchises at a profit, so in order to allow them to continue profiteering at the public expense Network Rail provides access to the tracks at miles below the true cost.

How much below cost?

In 2017-18 Network Rail spent £5.6 billion more than it made, bringing the total debt up to an astonishing £50.4 billion.

This £50 billion+ black hole of debt is the true cost of the Tories' shambolic rail privatisation agenda, and because Network Rail is a publicly owned company, it's classified as public debt.

Neoliberal economic insanity has resulted in the accumulation of £50 billion+ in public debt so that private rail franchises can wring a few hundred million in annual profits out of the rail network!

Racking up £50 billion+ in debt so a bunch of franchise profiteers can make a fraction of a billion in annual profits at the public expense must be of the most egregious examples of a false economy ever seen.

This astounding black hole of debt should be a massive national scandal, but it's barely even mentioned in the mainstream media.

Most of the extremely sparse coverage on the subject over the last decade focused on the debate over whether this astonishing Network Rail debt should be counted as part of the national debt or not.

There have been virtually no efforts whatever to explain that such a massive and unsustainable debt is a damning indictment of Tory privatisation mania, and about as strong an argument as possible for renationalisation - because if the public purse is going to cover the cost of operating the tracks anyway, it should obviously receive the revenue from ticket sales rather than distributing the revenues to profiteers.

Since privatisation the UK rail network has received far more in government subsidies than it cost to run the entire network before privatisation, but on top of that Network Rail is hiding an additional £5 billion+ per year in their black hole of debt in order to allow the rail franchise profiteers to continue making profits at the public expense.

Creating a £50 billion black hole of debt to hide the operating losses from renting out the tracks at below cost is clearly a kind of secret subsidy to the franchise profiteers.

And to top it all off, nearly all of these franchise profiteers are now partly or wholly operated by the state rail companies of other nations like Germany, France, Italy, the Netherlands, Hong Kong, China, and Singapore.

The UK public has racked up an astounding £50 billion+ in debts in order to allow the state rail companies of other countries to make artificial profits at the expense of the UK public purse!

The Tory rail privatisation agenda has resulted in an absolute shambles of a system, and an astounding black hole of debt that the public are kept in the dark about.

So next time you hear someone banging on as if rail privatisation has been a roaring success, ask them to explain the £50 billion+ in Network Rail debt, and when they can't, tell them it's high time for the complete renationalisation of the entire rail network.


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