Today I received an IEA email newsletter, which drew my attention to a (fairly) recent (May 24th) blog posting by Richard Wellings at the IEA blog, calculated to confirm all our prejudices here about privatisation (good) and government regulation (bad).
The recent history of Britain’s railways has undoubtedly brought the whole concept of privatisation into disrepute. But this is unfair. Rail privatisation was a pastiche of genuine privatisation - in many ways it actually increased the level of state control.
A truly private railway would be efficient, innovative, responsive to consumer preferences and would not require taxpayer support. It is time the critics (such as Will Hutton) stopped blaming privatisation for problems caused by government intervention.
The guts of Wellings’ argument is that in a truly free market, railway companies would have been free to integrate vertically, and being free to integrate vertically, they would have. The irrational separation of ownership between track and trains would have ended. The government did not allow this.
Maybe the new government will?