Back to Government? Reregulating British Railways

Rail privatization in the United Kingdom (U.K.) was a complex affair that involved taking a single industry and breaking it up into distinct parts. It also required separate regimes of statutory regulation to oversee the general operation of the railways, the bidding process for franchised routes, and safety. The entire enterprise lacked a clear rationale. Not only did the proposals appear flawed from the outset, but the policy was pursued by an unpopular government in the face of strong opposition from the rail industry and trade unions, opposition parties in Parliament, and the public at large. After a relatively short time it became obvious that standards of service were declining alarmingly on the entire rail network, and later, the cause of serious rail accidents indicated that passenger safety was being compromised through neglect of the system.

The difficulties encountered by government in responding to what had rapidly turned into a crisis raise important legal and constitutional questions. This article begins by explaining the constitutional relationship of Parliament and the executive by mentioning the important convention of individual ministerial responsibility. Secondly, it provides a narrative of the British Rail episode that discusses the main features of nationalization, privatization, and statutory regulation. However, this narrative is narrowly focused in order to concentrate attention on the main institutional failings and successive attempts to repair the damage. It will be suggested that the deep-rooted problems encountered in regulating a fragmented, loss-making railway expose the limits of regulation, and perhaps the limits of the privatization project in the United Kingdom. The Labour government continues to declare its commitment to public/private partnerships and free market principles, but we will see here that in a number of key respects, the levers of control are reverting back to government.