25 YEARS OF NEO-LIBERAL IDEOLOGY

Top “priority” of Tory privatisation of rail in 1993 was to “smash the power of the unions” new documents reveal

The Tory government under John Major considered “smashing the unions” as a “priority” objective of privatising British Rail, the Morning Star newspaper has revealed.

Newly-declassified Cabinet Office files from the early 1990s released by the National Archives also reveal a rift between then-Transport Secretary Malcolm Rifkind and arch-Europhile Prime Minister John Major over the shape that the new privatised railway should take.

Mr Rifkind favoured prioritising the sell-off of British Rail’s Intercity sector as a “vertically integrated” business covering both track and train. However Major preferred splitting the railway up into privatised regions.

The files show Downing Street official Barry H Potter asserting that “the smaller the number of lines linked together to form a saleable private company… the easier it becomes to break up British Rail and union control of the rail network”.

In a briefing for Mr Major on December 12 1991, political adviser Jonathan Hill – later to become a Baron – asked if Mr Rifkind’s model would “really smash the power of the unions”.

In the same document, Mr Hill set out the need to ensure privatisation “breaks BR up and smashes the unions”. This form of words appears in a list of “priorities” the adviser said that Mr Major “made clear” at a summit on rail privatisation at Chequers, the PM’s country residence.

Mr Hill also criticised Mr Rifkind for proposing that railway staff should maintain their employment conditions when transferred to the private sector.

“We obviously cannot tie the hands of the would-be franchisees in this way,” Mr Hill wrote.

Like Major, Jonathan Hill the former corporate lobbyist was also an arch Europhile Tory who later became European Commissioner for Financial Stability, implementing EU financial regulations. However he resigned the post in 2016 following the Brexit vote.

Ultimately the rail network was privatised along the lines of EU directive 91/440/EEC launched on July 29 1991 which demanded a split between ‘wheel and steel’ in order to introduce ‘competition’ into the industry.

Using this EU model the government awarded 25 different franchises to private operators while infrastructure, including tracks and stations, was split from train operations and sold off to become Railtrack – which was later dissolved following rampant profiteering and several fatal rail accidents.

The wheels of rail privatisation were first set in motion in January 1993, when Major’s government enacted the British Coal and British Rail (Transfer Proposals) Act 1993, specifically designed to allow the privatisation of both industries.

This was followed by the Railway Act 1993 which provided the legal framework for the sell-off and break-up of the rail industry. Many of the principal changes were brought into effect on April 1 1994.

In order to comply with the EU directive, the 1993 Act proposed to impose “any regulations made under section 2 of the European Communities Act 1972 for the purpose of implementing the Council 91/440/EEC”.

Other leading member states did not adopt the EU rail model wholesale. Despite splitting track and operations as demanded by the directive, many maintained a holding model controlled by powerful publicly-funded companies, such as Deutsche Bahn in Germany and SNCF in France,

This allowed them to pursue the control of private rail franchises abroad which come with profitable subsidies that are repatriated to subsidise domestic rail services.

However the EU has now imposed the Fourth Railway Package, a set of six legislative texts designed to complete the single market for rail services (the Single European Railway Area) and actively encourage the complete privatisation of rail Europe-wide.

This Package makes the competitive tendering of rail passenger services mandatory and enforces the full separation of train operations from infrastructure, the initial move which led to fragmentation, inefficiency and extra costs in Britain.

RMT general secretary Mick Cash said that following the latest revelations and the 25 years in which Britain’s privatised railways have been turned into a money-raking racket, the truth was now out at last.

“With nearly three quarters of the British people now supporting a return to public ownership of our railways, and with this shambolic minority government on the ropes, it’s no longer a question of if, it’s simply a question of when.

“Privatisation was always simply about busting the unions and exploiting the travelling public in the name of Tory ideology and grotesque corporate greed.

“The Railways Act 1993 states that the public sector cannot bid for franchises unless, of course, it is a foreign state.

“Therefore either a totally new act is needed to oversee nationalisation or there would need to be significant amendments to the existing act.

“Meanwhile the EU is pushing to open up national freight and passenger markets to cross-border competition,” he said.

According to Office of Rail and Road (ORR) figures nearly 60 per cent of all journeys in the 12 months to last September were taken on franchises run by other countries.

Twenty-three per cent were German-run including London Overground, the busiest rail company fully or partly owned overseas as part of Arriva, a subsidiary of Deutsche Bahn.

The Netherlands ran 15 per cent of services. Its state-owned Abellio runs Scotrail, has a majority stake in the Greater Anglia franchise and also owns 70 per cent of the West Midlands franchise.

French company Kelios – which is 70 per cent owned by the state-run SNCF – also has a stake in Southern.

Other foreign state-owned services include Hong Kong company MTR, which began running South Western Railway with First Group last August, taking over from Stagecoach’s South West Trains. Italian state operator Trenitalia also took over the c2c franchise from National Express last February.

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