What can Britain learn from the first nationalisation of its railways?

A train leaves King's Cross station, London, 1935. Image: Getty.

It is over 70 years since the era of public rail ownership began in Great Britain. The British Railways Board formally took control of the operation and planning of the whole network, having been brought into existence by Clement Attlee’s Labour government under the Transport Act 1947 (the name British Rail didn’t appear until 1965).

At the time, the network was in dire need of investment. The Railways Act 1921 had consolidated over 100 operators into “the big four” – Great Western; London, Midland & Scottish; London & North Eastern; and Southern Railways. They had been financially squeezed by rules that forced them to carry freight at rates that were often unprofitable, and competition from an emerging road sector that had been prioritised for public investment.

The rail network had then been worn to the bone in supporting the war effort and considerably damaged by German Luftwaffe bombing. Rail safety had become a serious concern: two major accidents in the south and north of England within two days in October 1947, resulted in 60 fatalities, and contributed to that year being the second deadliest in British railway history.

The level of outlay to restore the network and rolling stock to its heyday was well beyond the financial resources of the big four. In keeping with a public mood that also saw the nationalisation of coal, iron, steel, electricity and telecoms, not to mention the creation of the National Health Service, there seemed only one way forward.

Many are similarly keen on rail nationalisation today, following privatisation in the 1990s. The majority of the public are in favour, and Jeremy Corbyn’s Labour party plan to act accordingly if they win the next election. What can we learn from what happened first time around?

The next station is …

The 1948 nationalisation was followed by the “modernisation plan” of 1955, which committed £1.2bn – around £30bn in today’s money. It included electrifying the main lines, replacing steam locomotives with diesel models, renewing the track and closing certain smaller lines.

With hindsight, it failed badly. It essentially replaced what already existed rather than looking at current and future needs, missing a once-in-a-lifetime opportunity to revitalise the system. Long-term decline continued, resulting in losses by the late 1950s and the Beeching cuts of the mid-to-late 1960s in the name of a profitable railway by 1980.

That never materialised, and the consequences of decline and under-investment rumbled on into the current era of private franchise operators and state-owned track and stations company Network Rail. Surging passenger numbers have made today’s problems even more acute, creating a network that in parts is under severe strain.

Infrastructure investment since privatisation has been considerable. Network Rail is over halfway through a five-year £38bn investment plan, and is partly funded by the franchise operators. Yet Network Rail’s balance sheet demonstrates the limits of these contributions. The company had a debt level of £34bn in 2014, and it’s set to rise to £52bn by 2019. This level of debt would crush any private sector company.

As regards the dilapidated trains inherited by the franchise operators at privatisation, many have been replaced. The new Hitachi Azuma being introduced on the East Coast line later in 2018 has ergonomically designed seats, super-fast wifi and “mood” lighting – a far cry from when customers revelled in the 1950s sophistication of corridors and toilets on new short-haul trains.

Chuff, chuff! Hampstead Heath. Image: Wikimedia/creative commons.

Today’s companies that lease the rolling stock to the operators have made the large capital investments to make these upgrades possible because ultimately this is state-backed. The government will always ensure that train operating companies have trains.

There is a strong sense that whatever the level of investment in trains and track, it will never be enough. But this endless quest for a modern efficient railway can only ever be pursued with the heavy support of public finances. Nationalisation is likely to have little impact because the state is so heavily committed already.

As for the rail franchises, if you ignore the state’s contribution to infrastructure costs, a number are profitable and some considerably so – these include South West Trains, Greater Anglia and Thameslink. Operators have benefited from both the passenger increases and reduced charges for track access.

The government imposes premiums on different franchises based on how profitable they are expected to be over their seven-year lifetime. This is designed to prevent excessive monopoly profits and reduce the overall subsidy requirement. Yet it represents a very serious business risk for operators, since they have to accurately forecast revenue streams seven years into the future. This was no better highlighted than by Virgin Trains’ early planned withdrawal from the East Coast franchise on the back of missed projections.

Some might accuse Virgin of having tended too ambitiously, or even recklessly, but I’d argue the system takes the idea of business risk to breaking point, underpinned by a competitive tendering system that almost encourages excessive optimism. And because premiums can easily end up too low or too high, there’s a constant prospect of early withdrawals or public anger.

First class/second class

Nationalisation was no panacea in 1940s. It was driven more by circumstances and political ideology rather than any great strategic vision for a modern railway. The investment errors of the 1950s look like a classic example of the ills of public sector management: poorly defined objectives, loss of focus, little sense of realities at senior management level and wasteful extravagance.

The current model, on the other hand, exposes the private sector to excessive business risk and builds instability into the system. It also still depends heavily on state infrastructure investment or guarantees.

The ConversationThe best way forward is probably to optimise what we have: re-evaluate the rail franchising process and look at different ways to share business risk between the public and private sectors. That might include directly awarding some franchises without a tendering process, whether to a private or public operator, for example. It would be a step towards full nationalisation without throwing out the baby and the bathwater.

Jonathan Cowie, Lecturer in Transport Economics, Edinburgh Napier University.

This article was originally published on The Conversation. Read the original article.


In South Africa's cities, evictions are happening despite a national ban

An aerial view shows a destroyed house in Lawley, south of Johannesburg, on April 20, 2020. The city has been demolishing informal structures on vacant land despite a moratorium on evictions. (Marco Longari/AFP via Getty Images)

On the morning of 15 July, a South African High Court judge ruled that the city of Cape Town’s Anti-Land Invasion Unit had illegally evicted a man when it destroyed the shack where he was living.

That afternoon, the Anti-Land Invasion Unit was out again, removing shacks in another informal settlement.

Evictions were banned in South Africa for nine weeks, after the national government placed the country under a strict Covid-19 lockdown in late March. At present, eviction orders are automatically suspended until the country moves to a lower “alert level” and can only be carried out with a special order from a judge.

Yet major cities including Cape Town, Johannesburg and eThekwini (created through the merger of Durban with several surrounding communities), have continued to use municipal law enforcement agencies and private security companies to remove people from informal housing. In many cases those operations have been conducted without a court order – something required under regular South African law.

Around 900 people were evicted from three informal settlements in eThekwini during the eviction ban, according to the Church Land Programme, a local NGO. Its director, Graham Philpott, says it’s also aware of evictions in other informal settlements.

While evictions aren’t a “new experience” in these communities, the NGO released a report on lockdown evictions because they were “so explicitly illegal”. “There was a moratorium in place,” Philpott says, “and the local municipality acted quite flagrantly against it. There’s no confusion, there’s no doubt whatsoever, it is illegal. But it is part of a trend where the eThekwini municipality has acted illegally in evicting the poor from informal settlements.”

Evictions also took place in Cape Town and Johannesburg during so-called “hard lockdown” according to local activists. In eThekwini and other municipalities, the evictions have continued despite restrictions. In Cape Town, authorities pulled a naked man, Bulelani Qholani, from his shack. That incident, which was captured on video, drew condemnation from the national government and four members of the Anti-Land Invasion unit were suspended. 

The cities say they’re fighting “land invasions” – illegal occupations without permission from the land owner.

“Land invasions derail housing and service projects, lead to the pollution of waterways, severely prejudice deserving housing beneficiaries and cause property owners to lose their investments over night,” Cape Town’s executive mayor, Dan Plato said in a statement. (Plato has also claimed that Qholani did not live in the shack he was pulled from and that he disrobed when municipal authorities arrived.)

South African municipalities often claim that the shacks they destroy are unoccupied. 

If they were occupied, says Msawakhe Mayisela, a spokesman for the eThekwini municipality, the city would get a court order before conducting an eviction. “Everything we’re doing is within the ambit of the law,” Mayisela says. But “rogue elements” are taking advantage of Covid-19, he added.

“We fully understand that people are desperately in need of land, but the number of people that are flocking to the cities is too much, the city won’t be able to provide housing or accommodation for everyone overnight,” he says. 

While eThekwini claims to be a caring city, local activists say the evictions show otherwise.

In one case, 29 women were evicted from shacks during the hard lockdown. With nowhere to go, they slept in an open field and were arrested by the South African Police Service for violating the lockdown, Philpott says.

“These evictions are dehumanizing people whose dignity is already compromised in many ways,” says S’bu Zikode, the president of Abahlali baseMjondolo, a community organization whose Zulu name translates to “the people of the shacks”. 

“It has reminded us that we are the people that do not count in our society.”

Municipal law enforcement and private security contractors hired by cities regularly fire rubber bullets, or even live ammunition, at residents during evictions. Some 18 Abahlali baseMjondolo activists have been killed since the organization was founded in 2005, Zikode says, most by the eThekwini Land Invasion Unit and Metro Police.

(Mayisela says that if city employees have broken the law, Abahlali baseMjondolo can file a complaint with the police. “There is no conclusive evidence to the effect that our members have killed them,”  he says.)

Other Abahlali baseMjondolo activists have been killed by what Zikode calls “izinkabi,” hitmen hired by politicians. Two eThekwini city councillors were sentenced to life in prison 2016 after they organized the killing of Thuli Ndlovu, an Abahlali baseMjondolo organizer. A member of the Land Invasion Unit who is currently facing a charge of attempted murder after severely injuring a person during an eviction remains on the job, Zikode says.

South Africa’s 1996 constitution is intended to protect the public from arbitrary state violence and guarantees a right to housing, as well as due process in evictions. But for Zikode, the South African constitution is a “beautiful document on a shelf”.

“For the working class and the poor, it’s still difficult to have access to court. You’ve got to have money to get to court,” he says. 

The actions by municipal law enforcement are breaking down social trust, says Buhle Booi, a member of the Khayelitsha Community Action Network, a community group in the largest township in Cape Town.

“There’s a lack of police resources and those very few police resources that they have, they use to destroy people’s homes, to destroy people’s peace, rather than fighting crime, real criminal elements that we see in our society,” Booi says.

For him, it’s a continuation of the practices of the colonial and apartheid governments, pushing poor people, most of whom are Black, to the periphery of cities.

Around one-fifth of South Africa’s urban population live in shacks or informal dwellings, according to a 2018 report by SERI. Many more live in substandard housing. City governments maintain that the shacks destroyed during anti-land invasion operations are unfinished and unoccupied. But Edward Molopi, a research and advocacy officer at SERI, says that this claim is an attempt to escape their legal obligations to get a court order and to find alternative accommodation for affected people. 

The roots of the current eviction crisis go back to apartheid, which barred non-white people from living in cities. Between the 1940s and 1970s, tens of thousands of people were forcibly relocated from neighbourhoods like Johannesburg’s Sophiatown and Cape Town’s District Six to remote townships.

In the 26 years following the end of apartheid, deepening economic inequality and rampant unemployment have limited access to formal housing for millions of South Africans. Government housing programs have mostly focused on building small stand-alone homes, often on the peripheries of cities far from jobs and amenities.

While these well-intentioned projects have built millions of homes, they’ve failed to keep up with demand, says Marie Huchzermeyer, a professor at the Centre for Urbanism & Built Environment Studies at the University of the Witwatersrand in Johannesburg. Government-funded housing projects “will never on it’s own be enough,” she says. “It has to be accompanied by land release.”

Government policies call for the “upgrading” of informal settlements and the formalization of residents’ occupation. But “there are still very, very, very few projects” of that nature in South Africa, Huchzermeyer says. “Even if it’s an informal settlement that’s been around for 20 years, there still seems to be a political wish to punish people for having done that.” The government wants people to go through the formal process of being given a house, she says – and for them to be thankful to the government for providing it.

At the municipal level, change will require “real leadership around informal settlement upgrading and around ensuring that land is available for people to occupy,” she says. 

Despite the end of enforced racial segregation, spacial apartheid remains a factor in South Africa. There are few mixed-income neighbourhoods. Those who can afford to often live behind walls in sprawling low-density suburbs, while the poor live in overcrowded slums and apartment buildings.

The creation of the apartheid city “didn't happen by chance,” says Amira Osman, a professor of architecture at the Tshwane University of Technology. “It was a deliberate, structured approach to the design of the city. We need a deliberate, structured approach that will undo that.”

Since last fall, Johannesburg’s Inclusionary Housing Policy has required developments of 20 or more units to set aside 30% of those units for low-income housing.

The policy, which faced significant opposition from private developers, won’t lead to dramatic change, says Sarah Charlton, a professor at the Centre for Urbanism and Built Environment Studies, but it is “an important and significant step.”

Zikode isn’t optimistic that change will come for shack dwellers, however.

“People in the high positions of authority pretend that everything is normal,” he says. “They pretend that everyone is treated justly, they pretend that everyone has homes with running water, that everyone has a piece of land – and hide the truth and the lies of our democracy.”

Jacob Serebrin is a freelance journalist currently based in Johannesburg. Follow him on Twitter.