Zealots can sleep easy now Eurostar is sold

LEP Columnist Barry Freeman
LEP Columnist Barry Freeman
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One can only begin to imagine the psychological woe Eurostar profits must have caused the free market faithful who dictate the terms within which UK citizens sadly live.

How George Osborne must have tossed in the night! Haunted in his slumbers at the thought of a state stake in this company, with its rising customer numbers and profits.

Can’t be easy, can it, to reconcile a zealously held belief in private ownership good, public ownership bad, with what, on the surface at least, seems an endeavour finally working for the taxpayer?

Finally, at last, as for most of its life this has been one dirty great money trap. Indeed, shortly after Osborne announced the terms of the sale – having revealed he was to purge his demons in a huge act of blind faith in October last year – Dr Richard Wellings, head of transport at the Institute of Economic Affairs popped up to warn that the much-vaunted £750m price represented a terrible return on public money already poured in.

“Five years ago, taxpayers spent around £800m (in current prices) bailing out Eurostar and its parent company. Massive losses accrued since the service started in 1994 were written off,” wrote Wellings, adding that public cash, whether we owned the infrastructure or not, would still subsidise the route.

So why get out now? Now, once the flow of cash has apparently been reversed, for a price too low to clawback even the recent bailout, let alone preceding investment?

And if the picture seems rosy now it might yet be rosier soon.

An editorial in The Economist – that bastion of leftist collectivism – last May pointed out that with both freight and passenger business on the up, and services reaching the Med soon to follow, Eurostar was well-placed to lead a Golden Era of high speed continental rail travel.

This, perhaps, is why the French and Belgian national train operators are not selling their shares (55% and 5% respectively).

More likely, though, it is simply that the slash and burn right wing business model which originated in the US and came to mesmerise our political classes never gained quite the same traction over the Channel.

Thriving public concerns – EDF, say, the French state-owned giant which keeps 6m UK homes lit and warm – remain objects of national pride (we have the Queen and flags).

Nothing like EDF could survive here. Prophets of private profit can’t live with the contradiction.