New report from the Adam Smith Institute calls on government to scrap costly HS2 and part privatise debt riddled Network Rail
- Network Rail a massive drain on the taxpayer with £37.8 BILLION net debt
- Government should sell off up to 49.9% of Network Rail raising £8 billion
- Smaller railway lines should buy the tracks they run on from Network Rail and more competition between providers on trunk routes should be promoted
- Hugely costly HS2 should also be scrapped and the focus put on electrification to stimulate the Northern Powerhouse
A new paper released this morning by the Adam Smith Institute calls on the government to get Britain’s trains back on track and ease the huge burden on the taxpayer.
The report, “Network Fail: Getting UK Rail Back on Track”, urges the government to sell off 49.9% of Network Rail, which it says lacks the discipline of the private sector, and should seek to replicate the success of the privatisation of the National Grid worth over £35bn.
Network Rail is an unwieldy beast with a vast debt burden of £37.8bn that is now included in public liabilities. It is a strain on the taxpayer and up to 49.9% needs to be sold off the paper argues: the Government’s 40% Eurostar disposal has shown there would be no lack of buyers.
The paper urges the government to promote vertical integration of smaller Network Rail-owned lines and to crack down on under performing rail franchise holders, terminating their franchise if necessary. Competition between providers on lines should also be promoted where possible, with only 1% of passenger journeys currently facing any direct rail competition.
The hugely costly and inefficient HS2 programme should also be scrapped the report urges. Currently on course to cost the taxpayer in excess of £50 billion, the HS2 project is both unnecessary, with current off-peak occupancy levels well below 50%, as well as being economically irresponsible - the numbers simply do not stack up. The report reveals that HS2 is costing up to 9x more per mile than high speed tracks in France, and will be reaping rock bottom returns.
If the UK is to achieve its “Northern Powerhouse” revival then it must focus on schemes like electrification of the TransPennine Railway and moving ahead with the London-Sheffield mainline.
Adam Smith Institute fellow and author of the paper, Nigel Hawkins, said:
“Action to sort out Britain's railways is a priority. Radical decisions are needed to deliver financial competence, sensible investment and improved customer benefits into the system.
“Scrapping the shockingly expensive HS2, selling up to 49.9% of Network Rail and cracking down on under-performing franchises are priorities.”
Notes to editors:
For further comments or to arrange an interview, contact Flora Laven-Morris, Head of Communications, at email@example.com | 07584 778207.
To report “Network Fail: Getting UK Rail Back on Track” will be live on the Adam Smith Institute website from 00:01 8th September 2016 and can be accessed ahead of time here.
The Adam Smith Institute is a free market, libertarian think tank based in London. It advocates classically liberal public policies to create a richer, freer world.