'The worst of all worlds?' New Labour, Network Rail and the third way

This paper examines the role and status of Network Rail, a very significant example of New Labour’s attempt to operationalize the ‘third way’. A number of significant changes have occurred since its creation which make Network Rail’s position as a private company with private sector debt appear increasingly anomalous. These changes include: the reclassification of the debt of another rail company from private to public, and the introduction of ‘imputed debt’ into public sector debt measurement; new funding arrangements for Network Rail which make it heavily dependent on public support; and important rail regulatory policy changes. The paper demonstrates that Network Rail is a very expensive mechanism for channelling public money to private companies, and argues that the Labour Government’s attempt to maintain the company’s private sector status as part of its third way approach is ultimately untenable.