Review of the rail industry to be launched

In one of the biggest "we were wrongs" for a while, David Cameron and Chris Grayling will announce today that they want to reverse John Major's division of responsibility for trains and railways. They will say that companies that manage both wheel and rail would be more efficient and require less subsidy.

As pointed out in the Homepage comments today, the details on how this would comply with this 1991 EU directive are as yet unclear.

Network Rail has a very poor reputation after Potters Bar and other incidents but will do its best to preserve its monopoly. Grayling will continue the theme of being positive about the public sector however:

"We regard the people who work on our railways as skilled professionals, responsible for the safety, operation, logistics and customer service of our network."

The railway review will lead into a Strategy Paper that will rival the Government's own review in 2007. It will focus on integrating the network whilst keeping fares and overcrowding down, and take these points as givens:

• Any new integrated organisations will work under franchise-type arrangements

• More scope for long-term investment decisions is needed

• Any new structure must protect the interests of freight users and smaller train operators.

• Rail workers should have a share in the future financial success of the railways (in order to discourage strikes)

Deputy Editor

Comments

[MH]

At last, something intelligent emanating from Project Dave. The Major Government's decision to privatise as it did has made life in the SE a misery for commuters. The last Conservative Government did more on a daily basis to sod up my day than Blair has ever done. If merged franchsies covering rolling stock and infrastructure can be delivered efficiently, then the Conservatives will have gone quite a way to recovering my vote. Oh that and ditching Dave that is.

[Denis Cooper]

We can all come up with our own analyses and our own preferred solutions, but basically any policy adopted must conform to the requirements of European integration - ie the principle of "ever closer union" embedded in the EU treaties and fundamental to EU membership, which Cameron supports.

This is why we now have so many government policies which are sub-optimal even if they're not disastrous - because they aren't so much policies to run an existing country, but policies designed to create a new country, "Europe".

As I said earlier on the other thread, rather than a photo-op at Clapham Junction it would be more realistic if Grayling went to Brussels and asked the relevant officials what they might allow him to do. There's really no point announcing policies without their imprimatur.

[johnC]

Bring back the GWR, LMS, LNER and SR (preferably with steam trains).

[MH]

Denis, spot on. Which of course, last week's EPP announcement did nothing to progress.

[Jon Gale]

I've thought for years that the railway companies should own track, then they'll have an incentiive to look after it. Splitting responsiblity was daft.

[Jon Gale]

Of course since it was so daft, I should've guessed it was an EU requirement.

[Yet Another Anon]

As pointed out in the Homepage comments today, the details on how thisNetwork_rail would comply with this 1991 EU directive are as yet unclear.
I would favour converting Network Rail to charitable status and allowing them to decide whether to run train operation in house or franchise it out, obviously existing contracts would have to be honoured. I also think that privatising Royal Mail except for the Counters part and handing that over to Network Rail which would be ideal as Ticket Offices even where there weren't railways with people able to buy railway tickets witjh their stamps - maybe they could takeover handling things such as people paying Council Tax etc.... (Post Offices already run banking counter provision). The Train Operation and Infrastructure parts would have to remain seperate divisions for accounting purposes (whether or not the UK is in the EU I think seperating accounts for auditing purposes probably does have advantages) but ultimately Network Rail would be in overall charge.

Of course if David Cameron wanted to, he could move to a system in which Train Operating Companies leased the track off Network Rail and maintained it themselves as a seperate division as part of the franchise, or even sell the track wholesale to the Train Operating Companies and have a situation more like that of the Water Industry in which private companies own the infrastructure as well although auditing it seperately (much as it was before 1948) and in which Network Rail is then woundup.

[Yet Another Anon]

Of course since it was so daft, I should've guessed it was an EU requirement.
the EU requirement is for seperate accounts that can be audited seperately - ultimately Infrastructure Maintenance and Train Operation have always been seperate divisions although not neccessarily accounted for seperately, the problem is where the responsibility for them is with seperate bodies, there needs to be someone with the capability in the event of problems to go in and kick ass both of those involved in Train Operation and in Infrastructure Maintenance, if someone keeps accounts of what they spend on different rooms in a house - if they choose to split it so that they maintain seperate lists and seperate budgets then that is seperate accounts.

John Major was just looking for an excuse to break up the system because that was how he wanted things personally, Nicholas Ridley when he looked at it under Margaret Thatcher and subsequently concluded that it was essential to keep it integrated and the auditing changes could have been implimented with only relatively small changes.

[Peter Gardner]

Yet Another Anon,

Have you checked that directive 97/67 on the liberalisation of postal markets allows you to do that with the Royal Mail?

[Yet Another Anon]

Have you checked that directive 97/67 on the liberalisation of postal markets allows you to do that with the Royal Mail?
The government is perfectly free to sell all remaining postal services, Post Office Counters though is not a Postal or Parcel organisation - it merely takes parcels and mail and sells them on, Newsagents sell stamps as do libraries - if the Sorting Offices, Parcelforce, the Overseas parcel companies etc... were all sold off 100% then that would leave what was just an administrative service - they might accept parcels for other companies or sell stamps on behalf of private sector organisations but they would then have no involvement in sorting or delivery or post and parcels or in the running or regulation of parcel\postal companies, just as they don't run banking services and don't publish books but they provide banking services and sell novels and DVD's etc...

[Yet Another Anon]

it merely takes parcels and mail and sells them on
I mean passes them on to the couriers.

[Yet Another Anon]

I actually favour withdrawing from the EU and Council of Europe anyway, but even so Post Office Counters is merely like an access point to couriers, I rather favour some kind of licensing system for Postal Services to allow competition between a number of private couriers for mail services, there are private Post Offices of course such as Post Office Etc... that operate outside the franchising and state system, it might be that further deregulation is neccessary.

[Simon Chapman]

I am delighted that Chris Grayling has launched a serious policy review into one aspect of public transport. For too long the Party's transport policy has been defined solely by reference to the car. We haven't done any serious thinking about public transport policy for ages. What have we been able to say to rail bus tram & tube travellers about how we will improve their services?

My experience has been that, whenever I have raised the need for some decent public transport policy at a Q & A session with one of our MPs, the answer has usually been that of course we need some policy about that, but we mustn't forget motorists etc etc. I don't blame them particularly - our front bench transport team hasn't given them much more than that by way of ammunition. Let me therefore say that I live in a tiny rural hamlet with infrequent buses and the car is essential to my family's & my life. I don't need reminding of that.

However I also use public transport a great deal - usually 3 or 4 days each week. It is therefore refreshing, and not before time, to see this come up the Party's agenda.

For me, the success of the railway review will be the "Hull Trains test". Hull Trains is a great little company started in 2000. It has one route, from Hull to London. Its trains are clean, reliable, and usually arrive in London....early. The cost on the morning of travel of buying a single from Grantham to London is £26.00 - or £52.00 return. The cost of an equivalent return from Grantham to London on GNER, the main operator on our route, is nearer £80.00.

Hull trains charge £3.00 a day for their car parking in central Hull. In the market town of Grantham GNER has just lifted the daily car park charge from £5.00 to £9.00 - even though there is a new car park which is never full.

Hull Trains's one disadvantage is that it hasn't managed to secure a London-to-Hull slot for itself at a convenient time in the evening - it badly needs a slot at around 5.30-6.30. Notwithstanding that, it represents such good value that its trains are almost always full. I have never heard a customer on my route complain about Hull Trains.

By comparision: GNER gives a pretty good service as well. But not quite as good, and it's much more expensive.

Grayling's review needs to ensure that companies like Hull Trains are not squeezed out by bigger operators. I am glad that is said to be a "given" - but make no mistake, the larger operators will be out to see that it doesn't happen. The review should be more ambitious - it should be encouraging smaller operators to start-up and then expand.

Good luck to Chris Grayling with this.

[Editor]

Three postings in a row is a bit excessive, Yet Another Anon. Your wisdom is very welcome but please don't clog up threads.

[Sally Roberts]

One area where big improvements are needed is the complicated minefield that is the fare structure! It is so complicated to buy a train ticket that surely many people must give up and go by car - or by air!

[TimC]

Simon C's post is spot on. If all commuters could be offered a choice on every route, things might really start to improve.

[tn1487]

A positive move by the party me thinks! We get chance to show we realise we have made a mistake and are not afraid to go back on wrong decisions.

Plus, if commuters like myself (paying £15 return everyday) think it shows the promise of improving the quality of service (which I do). Then surely it is a vote winner right across the country-not just for commuters but for those who use the train for leisure purposes, as well as the greens, who surely see that the party emphasis is moving away from cars.

It just surprises me that Blair hasn't thought of making it a vote winner for himself.

[Old Hack]

Chris Grayling - Get thee to Japan!

[Adrian Owens]

Simon C's post is indeed pertinent. Whatever solutions we come up with we must retain elements of competition in the system.

We should also not forget that the current system has delivered fast-rising passenger numbers and among the young rolling stock in Europe. Not everything with the current system is rotten.

[TomTom]

among the young rolling stock in Europe

Maybe where you live Adrian Owens but making RBS rich through train leasing contracts did nothing for us. All the plans for new rolling stock were cancelled by J. Major so railways could be privatised and the cast-offs from Southern Region became the dire service provided to passengers in Northern England.

[TomTom]

Simon C's post is spot on. If all commuters could be offered a choice on every route, things might really start to improve.

Try Peterborough for confusing options. What we really need is new track............a high speed freight and passenger link from Liverpool to Hull and one linking the airports with a fast S-Bahn service to mainline stations.

[malcolm]

But pretty much everything is rotten Adrian.Younger rolling stock is only advantageous if it is actually better than that it replaces.There is no evidence that this is the case.I would also take issue that passenger numbers rising is anything to do with the current management system.London commuters now have to use the most overcrowded trains in Europe.
We now have a situation where subsidy is higher than under British rail,punctuality is worse,many rail fares are rising much faster than inflation,rail companies are profiteering from their support sevices such as car parking charges,the Rail unions are as militant as ever and management of both the track and the trains is still generally cowardly and inept.
As a party we can boast of some great privatisation successes,Rail is certainly not one of them.

[Yet Another Anon]

China of course is rolling out a national network of Maglev trains, new technology in new building as well as maintenance of existing lines is important, maglev provides the opportunity for far faster more easily controlled trains but of course need a new track.

[Richard]

http://www.libertarian.co.uk/lapubs/econn/econn091.pdf

An interesting article identifying why privatisation failed and how to make it work. It also points out that the EU directive can't be blamed for what happened.

[Simon C]

TomTom,

What's the problem at Peterborough? I don't use it very often, but don't you have a choice between WAGN & GNER - I know people who elect to "go on the Wagon" because it's cheaper if slower. Is that choice so hard?

I like the idea of a high-speed Hull-Liverpool link - but it wouldn't be high-speed if it went via Peterborough! Or are you making that as a separate point? If so, how would you sort out the Peterborough problem that you perceive?

Malcolm - the current SWT stock on the London-Portsmouth line is much much better than the cramped old non-airconditioned stock we had to put up with when I used to travel that from Liphook as a commuter. Squeezing into the middle of the 3-bench (3-2 configuration across the aisle) on a hot summer's day was a particular joy.

But from the sound of it, you agree that this is an issue that the party needs to get to grips with.

[Iain Murray]

Excellent. I set out the mistakes as I saw them in my paper for the Adam Smith Institute last year (available here). In short, privatisation itself wasn't the problem, more the unwieldy structure and the latitude this gave to regulators who strangled the new-born industry.

The EU directive should not be a problem. The German rail authorities have worked out a way round it if they choose an integrated privatization option.

[Ted]

Maglev trains - I remember a man from British Rail demonstrating maglev as future of rail to my class back in 1960's...those were the days when UK had an engineering industry and invested in research.

SimonC makes point about old stock. I was a daily commuter from Wilts to London for 21 years and from late 70's through to around 1990 the rolling stock was aging, recycled and prone to failure (guaranteed at least one failure per week). It was only in the 90's when privatisation beckoned that the stock was upgraded. Privatisation brought new stock, new fare stuctures etc and resultant increase in number of passengers shows it was successful in at least that.

However the complexity of privatisation went further than track & stock - the maintance etc was all done separately. The simple premise that the track company provided the road and the operating companies leased time-slots was lost. The benefit of that was that enterprising operators could compete on the same lines so no monopoly supplier.

This latest proposal actually goes back to what Major wanted but the Department and consultants talked him out of - he wanted to see the pre-war regional operations restored, with track & stock managed by the same company.

It looks a much better proposal than current one - there is no national rail network really just a collection of regional/inter-city lines and I think the failure of the 1990's competitive regime has probably meant regional monopolies are the future.

[Elaib]

Iain, in your paper you say,
"EC 91/440 remains in place, however. It continues to be a significant obstacle to any plans to reunite infrastructure and operations under the same ownership".

If asPatrick Crozier claims it is not a problem,where are the problems you forsee in the creation of the suggested poivcy within Directive 91/440 and the follow up directives

[Jack Stone]

I am afraid this thread like so many others on this site really does demostrate what is wrong about the Conservative Party and what must be changed and that is its total obsession with Europe. No matter what subject is discussed on this site it always ends up with a discussion about Europe.
If people are to be convinced of the party`s fitness to govern I am afraid its simply as to change. We must really start reflecting the real Britain and talking about the peoples priorities not something that hardly registereds out on the streets.

[MH]

Jack, when 85% of all laws emanate from the EU, do you not appreciate that Westminster politicians are completely contrained in what practically they can do?

[F Blake]

Just get rid of the complex legal and contractual administration and use the money to build railways ... with simple fare structure and without lots of changing trains to get from a to b

keep it simple!

[malcolm]

Ted and Simon C.You were lucky chaps,on my line now operated by 'ONE' new rolling stock meant a signixcant deterioration of services as the new stock had design faults etc.
I would be delighted if any initative by the Conservative party or indeed anyone else meant an improvement in services but as a commuter of more than 20 years I'll believe it when I see it.

[Denis Cooper]

Well, on a quick glance the most recent Directive which may constrain policy decisions regarding our railways (sorry, I meant, the parts of the Community's railways which run within the UK) seems to be 2004/51/EC, which amends and repeals parts of previous legislation running back to 91/440 and before.

It would be time consuming to go through everything about railways which comes up on EUR-lex, and it would be easy to miss something which has already been put in place, not to mention other proposals which may be in the pipeline.

That's why Mr Grayling really should check with the expert officials in Brussels, and they could tell him what they would and would not allow him to do.

[Andrew M]

Railway privitisation was not the problem just the manner in which it was done. In particular the main problem is the lack of competition on many of the train lines with one company having a monopoly. This means there is no competition in many areas such as fares with SWT able to charge what they want.

However railway privitisation seems to have brought about an improvement in the quality of stock train companies are using with it being updated on a regular basis, the choice of cuisine on long distance journeys and the amount of delayed trains of which there seem to be fewer than ever at least on my line.

[Julian Morrison]

They're already competing with roads. The Thatcherite obsession with artificial pseudo-competition was what created this mess in the first place. The track should be owned, operated and driven upon by the same people,and they should have a free hand in how much to charge, and a cast-iron guarantee of no politically-opportunist regulatory or tax instability.

[Richard]

"Jack, when 85% of all laws emanate from the EU, do you not appreciate that Westminster politicians are completely contrained in what practically they can do?"

"Jack Stone" is our resident troll. We keep him around for entertainment value. He is not to be taken seriously.

[Mark]

Railways can’t be run in the normal competitive model because, within reasonable costs, the capacity is finite and insufficient. It’s not possible to have two 1800s from London to Southampton.

More sensible is to have passengers decide what happens on their lines, awarding delivery contracts as they see fit; effectively elected regional rail authorities.

[Philip]

I entirely agree with Simon Chapman's comments (at 1340) welcoming our Party’s new concern to improve public transport, and his comment that "Grayling's review needs to ensure that companies like Hull Trains are not squeezed out by bigger operators." The same could be said about Grand Central, who GNER are trying to stop from providing new direct services from London to Sunderland.

Reintegration of track with trains, which presumably would entail the bigger main company on a route being responsible for the track, would need the Office of Rail Regulation (ORR) to have powers to prevent the bigger company forcing off companies like Hull Trains with track access charges or other uncompetitive behaviour.

The ORR could also be given powers to 'vet' timetables to ensure trains from different routes provide convenient connections at junctions, as well as guaranteeing good services to places that might not be financially attractive for companies to operate to.

In short Conservative rail policy should free the private sector to provide, within boundaries provided by a powerful Regulator to protect passengers’ interests. A structure should have a DNA that:
• Leads to the system being expanded to cater for the growing demand, rather than the current trend in pricing people off the trains;
• Leads to faster, better services with competitive fares on inter-city and other long distance routes to compete effectively with the airlines and roads (that would prove Mr Cameron’s environmental credentials!);
• Enables (rather than stifles as the present system does) private sector entrepreneurial initiative to improve services.
• That minimises costs to the taxpayer (unlike the present system – although Network Rail have made progress in reducing costs), while guaranteeing subsidy to socially and economically necessary services that might never pay their way.

As for the EU, I recall it has been claimed that EU law would allow a greater degree of integration between track and train.

Finally the policy should recognise that Government funding should, as Mr Grayling has said before, always have a role in big projects like a north-south high-speed line, which I hope the party will advocate.

[TomTom]

Prof Eric Laithwaite developed the linear motor which is the basis of Maglev.

Thyssen was a big player on building Maglev but it proved too expensive and needed too much public subsidy - they wanted to build a Hamburg-Berlin line. Instead China built an experimental run but with German Hermes subsidies so the technology is now transferred to China which should help with weapons production technologies