Good riddance Louise Haigh. Now let’s fix our decrepit railways
Louise Haigh has resigned as transport secretary in a blazing scandal. It has come to light that she was convicted of fraud over a missing work phone a decade ago – a device she reported to police as stolen in a mugging only to be turned on in her presence later.
Haigh’s former employer, Aviva, reportedly told police about several cases of mysterious disappearances of Haigh’s work devices. There have been allegations that she had reported her phone stolen to get a newer model, but Haigh’s associates denied this.
The resignation letter deflects responsibility for her actions, does not mention the conviction, and states the reason for stepping down is to avoid “distraction from delivering the work of this government”. Prime Minister Keir Starmer responded by thanking Haigh for all she has “done to deliver this Government’s ambitious transport agenda” and saying she has a “huge contribution” to make in future.
Despite the niceties, it is unlikely that Starmer will be missing his former minister. There was already speculation that Haigh would be among the first to be dumped after comments – that Starmer had to slap down – calling P&O Ferries a “rogue operator”. Haigh’s remarks almost derailed a £1 billion investment in a new Thames freeport by the company’s owner at Labour’s investment summit last month.
Haigh also declared the government’s “full support” for the introduction of 20mph zones back in August – hardly a way to endear the government to Welsh voters, where the measure is being partly reversed following a backlash.
The former minister, however, will likely be remembered for two contributions to Britain. The first was to nominate Jeremy Corbyn for Labour leader in 2015. She intended to broaden the debate, but subsequently expressed regret for the decision and criticised Corbyn’s behaviour and style.
The other is legislation, already passed through Parliament, that will nationalise the railway as existing franchises end. The Tories had already planned to increase state direction over the system while still allowing private train operators on a contract basis. The new government’s approach goes one step further by putting a state operator in charge of the entire system.
Haigh’s nationalisation plans stamp out opportunities for private sector-led innovation and incentives to deliver for passengers. They will also risk empowering trade union strikers, who will be given a stronger hand to shut down the system in pay negotiations.
There is little reason to believe that the government, which is currently struggling with so many public services like the NHS, will be competent enough to improve the system.
We should also not forget the disaster last time the system was nationalised. Between 1948 and 1995, journeys declined from one billion to 750 million. Then there was a significant lack of investment – as other priorities like healthcare inevitably take priority in political decision making – and the Beeching cuts.
The franchising system resulted in increases in passenger numbers, which doubled to 1.75 billion by 2019. There have also been big investments in rolling stock.
Haigh claimed that nationalisation will enhance service reliability. However, there is little evidence of any improvements on the lines already under state control. London North Eastern Railway, which took over the InterCity East Coast line from Virgin Trains in 2018, has hardly shown a striking record.
The current system is far from perfect. But that is not entirely the blame of private operators. National Rail, the state-owned controller of the tracks and signals, is responsible for more delays than the train operating companies. The decline in passenger numbers since the pandemic has also reduced resources available for the system.
But the biggest failure was to not encourage competition. We know that where open access operators can compete, like Lumo from London to Edinburgh, passengers are given more options at lower costs. Unfortunately, under Labour’s nationalisation plans, there is little incentive to enable this sort of competition with the state operator.
The next major issue that needs addressing is the out-of-control cost of building transport infrastructure. Britian Remade has calculated that, on a per-mile basis, HS2 is the world’s most expensive railway, costing twice as much as similar projects elsewhere. Perhaps that’s no surprise with environmental requirements like a bat shed costing £100 million.
Haigh is gone and unlikely to be missed. However, at this stage it may be too much to hope that a new Transport Secretary takes a radically different approach.
Matthew Lesh is Country Manager at Freshwater Strategy and a Public Policy Fellow at the Institute of Economic Affairs