How can a landlord expect to receive rent if the sanction for refusing to pay it isn’t eviction?

A small good thing happened last week, but in a context of such stupidity and unfairness that it only brought home to me more strongly all that stupidity and unfairness, so I’d almost rather it hadn’t happened at all. The good thing was that the train operator “Great Western Railway”, which is owned by FirstGroup plc, was banned by the Advertising Standards Authority from putting up any more posters implying it’s publicly owned. Specifically, posters that read: “The railway belongs to the region it serves”.

There’s a tiny bit of justice in that decision, but so tiny it insults the very concept. Only a homeopath could believe that such a microscopic quantity of justice could have any beneficial effect. It’s like hearing that, though a serial killer will walk free, the judge has ruled, after a desperate appeal by the prosecution, that he will no longer be given free biscuits at the public expense. Hooray! No more biscuits for the Kensington Ripper! Maybe he’ll leave fewer crumbs around his next eviscerated victim!

You may be wondering why I’m getting so worked up about this that, in bad temper, I’ve allowed the imagery of violent mutilation to invade my discussion of transport infrastructure. You may be wondering it in exactly those words. If you wonder in words. Perhaps thoughts come to you as shapes or colours – with me, it’s like a typescript in 12-point Courier. Serves me right for not doing art GCSE.

Facebook Twitter Pinterest The offending poster from Great Western Railway. Photograph: ASA/PA

The root cause of my anger is that the posters’ slogan is factually correct. The railway, on which FirstGroup currently operates services under the name “Great Western Railway”, does indeed belong to the region it serves, if you take “the region” to mean Britain. All of our national railways – the tracks, bridges, cuttings and tunnels – are owned by Network Rail, which is owned by the government.

In modern times, private investment hasn’t really taken off in the track-maintaining part of the railway business. Investors prefer to limit their liabilities to the trains, ticket machines and refreshment carts – the bits for which passengers pay money – and leave the bits that cost money to be paid for by the state. It’s an incredibly astute move on the investors’ part and is doubtless further proof to the likes of George Osborne of the genius of the private sector when compared with the doltish bridge-and-tunnel-maintaining public one, which just burns money on boring infrastructure (in the case of tunnels), but lacks the wit even to extort £3 per extremely unpleasant croissant from the thousands regularly held temporarily but hungrily captive thanks to the failure of its own signals.

Companies like FirstGroup never take direct responsibility for anything as headachy as maintaining hundreds of miles of undulating track. They’re just tenants – they rent use of the lines from the government, from us. So we’re not just FirstGroup’s customers – it’s also ours. And it’s been quite demanding over the years.

In 2011 it announced it was pulling out of its 10-year contract three years early – a presciently negotiated “break-clause” allowed this. Unfortunately for us, of the £1.13bn of rent it was contracted to pay over the decade, £826m was due over the last three years, the three years the company adroitly opted out of.

This left the landlord, which is us, which is the government, in an awkward position. Does it look for a new tenant who might pay the £826m, or something approaching it, instead? That’s what it ought to do. Otherwise, what force does any future government franchise contract have? How can a landlord expect to receive rent if the sanction for refusing to pay it isn’t eviction?

Facebook Twitter Pinterest Illustration by David Foldvari. Illustration: David Foldvari

Unfortunately, the government’s most recent attempt to negotiate a major new rail franchise is universally known as the “west coast mainline fiasco”. The Department for Transport, shaken by cuts and new rules, totally screwed it up, and its decision was effectively reversed after a legal challenge by the incumbent franchisee.

So, rather than get into all that again, the government basically told FirstGroup it could stay put. After all, its stuff was everywhere – an eviction would have been an admin nightmare. Or maybe the minister had just seen an upsetting news report about homelessness. Instead of the £826m under the original contract, the company agreed to pay £32.5m for a 23-month extension, a sum which economists have described as “massively less”.

I’ve been miserably aware for years that this sort of crap went on. The contrast between extortionate and unreliable trains and the jaunty corporate slogans with which private operators daub their dirty carriages and demoralised staff has always made me resentful. The discovery that what the private sector lacks in willingness to maintain a rail network it makes up for in the ferocity of its bargaining with exhausted and under-resourced civil servants is not a very surprising one.

But the rebranding of FirstGroup’s rail services (last autumn, after it had just been granted a further four-year franchise extension) as “Great Western Railway” added insult to ongoing and repetitive injury. For me, that really was the shit the burglars did in your bed. The adoption of the name of Isambard Kingdom Brunel’s famous company, which actually built the railway, by one which merely profits from it is an act of breathtaking cheek. It’s up there with Mussolini appropriating the trappings of the Roman Empire.

The Advertising Standards Authority has said nothing about that, merely that the firm mustn’t imply public ownership. The company has escaped official censure for another advert, which described Brunel as “our illustrious founder”. He is no such thing. The company Brunel founded was bought in 1948 by the British state, a purchaser that continues to own and maintain the railway he designed.

Meanwhile the owner of this reproduction GWR grew out of the merger of some post-privatisation bus companies in the late 80s. FirstGroup plc doesn’t build things – that’s risky and expensive, as Brunel discovered on many occasions. Its mode of business is to profit from state enterprises thrust into private hands by Tories for ideological reasons.

Were it not for the availability of public assets at a bargain price, and state subsidies when returns disappoint – and if it actually had to build a railway in order to operate one – FirstGroup might find it tricky to give shareholder value. But, like a sewer rat, it’s perfectly evolved for the conditions in which it exists. Which is fine, I suppose. Right up until the rat tries to claim he designed the sewer himself, because his main aim in life has always been cleanliness.