As Network Fail Strikes Again, Government Must Intervene

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Open for business – but under Network Rail’s plans, it’s not clear for how long

The rail network has been in the news just lately, with ownership of the North East franchise ping-ponging around, and a much vaunted “new timetable, more trains, better service” failing to deliver all three of those things.

But journo Tom White has now exposed a well-advanced scheme for Network Rail to sell off its commercial property en-bloc for £1.2bn.  Ahead of this, the rents on railway-arch business are being increased by up to 500%  Yep, you read right– Five. Hundred. And if that doesn’t look like an attempt to attract new owners with maximum vacant possession, I don’t know what is.

Of course, these businesses are hardly your multi-national, high volume, super-profitable corporate entities.  They are, as White’s article points out, small businesses, often surviving hand-to-mouth and parent-to-child, with employees limited to the low end of single figures.

But that makes them pretty typical of business in the country as a whole.  Of the 5.7 million enterprises in the UK, 5.5 million (or over 96%) are described as micro-businesses, just like these railway-arch outfits.

Network Rail is clearly out of step with the way in which the UK does business.

Or are they?  Deregulation is the order of the day. Might is right and dog eats dog.  That increasingly applies throughout the economy.  It is a certainly an almighty contradiction.  In his “London Overground,” Iain Sinclair describes the effects of rent rises and gentrification on the railway-arch economy. It is neither pretty nor economically productive, with nothing often replacing the businesses that have folded or moved out.

So why do this?  Network Rail are quoted as saying; “The sale…will enable the company to raise funds to reinvest in much needed railway projects to expand and improve the railway…”

Or put another way:  The way in which British railways are funded means they cannot operate without doing down another sector. It makes no sense. And by “it”, I mean this myopic short-termism, negligently laissez-faire, non-management of the economy.

This sorry saga emphasises the value of work by the admirable We Own It campaign group to offer an alternative narrative on public ownership and the value of a thriving public sector.

So, here’s a call to government: You need to intervene. Whether it is the Treasury, BEIS or Transport, or all three departments, or their corresponding parliamentary committees, the Network Rail decision needs to be called-in, subjected to scrutiny, reviewed, call-it-what-you-will.  It affects a national infrastructure as well as the prevailing model of employment and business.

That Network Rail could have got so far down this track (apologies for the pun) raises questions about effective oversight in general.  Public ownership is not a universal panacea and even if it was, the current political winds are set against that direction of travel.

But what accountability means in practice these days is a live issue – witness backbench MPs increasingly asserting themselves in dealings with government.  So, shouldn’t the public be able to have a bigger say in what Parliament scrutinises?

This is different to having an input into what Parliament debates – there are already mechanisms for that (indirectly) through Private Members’ Bills and (directly) by petitions (100,00 signatures means there has to be a debate). And I think it is different too, to the Public Reading Stage – a new layer in the processing of legislation that was trialled without much enthusiasm in 2013.

What I think we need – and the Network Rail property divestment is a great example of why – is the ability to pause decisions by calling them in for scrutiny.  Perhaps this too could be triggered by a petition? There would need to be a robust procedure to ensure referrals are soundly based, duly considered and promptly resolved. Some issues would need to be out of scope (from the perspectives of both common sense and political expediency).

There are of course risks.  Vexatious behaviour is to be expected – and can be managed. Would a public gateway undermine existing forms of scrutiny? It’s hard to see how.

And any risks need to be set in the context of the potential advantages – in policy outcomes and democratic participation.  It’s surely got to be worth a go. An estimated 5500 small railway-arch business owners, their families and customers would, I am sure, say “Yes” to that.

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