Rail 393: Will the fuel furore backfire on rail investment plans?

The Great Millennium Fuel Crisis was hailed by the media as a bonanza for rail. There certainly was an increase in passengers but, as CHRISTIAN WOLMAR explains, the performance picture was patchy while some TOCs did little to make their new customers welcome. And if the Government caves in to calls for tax cuts, it could threaten the railway’s ambitious long-term spending plans.

Suddenly, there are clouds on the horizon. Big grey ones in the form of beer-gutted truck drivers and ruddy-faced farmers waving placards outside petrol refineries. As I put it in an article in the Evening Standard, ‘transport politics will never be the same again’ after the events of the second week in September. And just because the railways were one of the heroes of the episode, it doesn’t mean there are not real worries about the long-term impact of the GMFC, the Great Millennium Fuel Crisis.

The GMFC was, in fact, more to do with people’s perception that they are overtaxed than anything to do with transport. The widely reported massive public support may, too, be something of an illusion. Sure, if you ask someone sitting in a filling station queue whether petrol prices are too high, they will answer ‘yes’. But what really angered them was the fact that the Government did not seem to be listening to their concerns about the issue – and that was ministers’ big political mistake. Nevertheless, it is transport policy which will feel the long-term effect of the GMFC.

Let’s first look at what happened on the railways. Yes, there was some good news, but not quite as good as was trumpeted in the press. The headline figure that there was a 20% increase in usage was a crude back-of-the-envelope calculation put out in haste by the Association of Train Operating Companies after a ring-round of their members and picked up rather too enthusiastically by the media.

On further reflection, the true figure, according to George Muir, the head of ATOC, was that for three or four days in the middle of the GMFC there was a 10% increase in usage. It was patchy, too. Lines where trains already dominate the market, such as in many parts of Kent, experienced less of an increase than those where there are plenty of people who normally drive in, such as Surrey and the Chiltern area. On some lines there was a fall in leisure passengers – presumably those who have to drive to their local station – while demand at peak times soared, but on others demand across the board went up.

As a result of the extra people pouring on to the network, performance fell sharply in some areas. Trains were having to increase the dwell time at stations to allow people to get on and off, causing delays which tended to compound at each stop. Railtrack reported that in terms of minutes’ delay, it was one of the worst weeks of the year but, with much of Britain alternating between gridlock and totally empty roads, nobody noticed.

Many of these new passengers also had to stand, which did not give them a good impression of the railway. And the welcome they received varied from area to area. Some operators, like First Great Western, responded by using the GMFC as a marketing opportunity, sending welcome letters to new customers, but others made little or no effort to try to retain them or to apologise for the overcrowded conditions.

The railways were lucky, too, as the GMFC exposed some weaknesses in their ability to cope with a similar crisis in the future. In the early 1990s BR, in its wisdom, decided that fuel deliveries by rail were uneconomic and they were largely transferred to road. (Train operators, by the way, get the red diesel for which they pay only 3p per litre duty compared with 42p for other users.) Therefore, if the crisis had continued for two or three more days, there would have been widespread cancellations. Thames, for example, which on the Wednesday announced it would run out of fuel the following afternoon, was only saved by an emergency delivery from Chiltern, which has a policy of always keeping five days’ stock in store. One imaginative rail executive got his supplies by sending off a tanker to fill up in France.

ATOC was asked to draw up a list of depots so that they could be prioritised, which shows the total lack of contingency planning on the Government’s part but this would have been too late to prevent cancellations. Train operators have learnt the lesson and Chiltern, for example, is looking at ways of bringing in fuel by rail to its Aylesbury depot which has always been served by road since it was built a decade ago.

The operators were, too, beginning to find it hard to ensure their staff could get to work. ATOC agreed that drivers could use other operators’ trains for free which, of course, in the days of BR was a universal right anyway. They started to use motels and hotels and hiring minibuses to ensure drivers could get picked up. So the chirpy conclusion made by the press that this was a cash bonanza for the operators was not entirely true – there were extra costs, as well as a boost in revenue.

Nevertheless, it was a good week for the railways, and the assembled bigwigs at the Railway Forum conference on September 18 were feeling jolly chuffed with themselves. Privately, though, there were concerns that the GMFC and the supposed public support for the demonstrators would result in a shift in transport policy.

Of course, there is not about to be a U-turn, given that the ten-year transport plan and the Comprehensive Spending Review have only just been published. But, in the medium term, there may well be a squeeze on Government spending, prompted by a slowdown in economic growth or buckling from the pressure of those seeking reduced taxation. With rail still accounting for only 6% of all journeys, even after the recent period of strong growth, the Government may well be under pressure to renege on its ambitious rail plans.

Add in another little problem to the equation. Will the industry be able to spend the money at the required rate – and sensibly? I hear dark murmurings from several key players about the ability of railway companies to gear themselves up to meet the requirements of the ten-year plan. Should the money remain unspent, there is no doubt the Treasury will try to snaffle it up or, more likely, transfer it on to roads spending to appease the motoring lobby.

There is another danger, too – the unpopularity of the Labour Government. In his speech to the Railway Forum, Sir Alastair Morton called on the Tories to promise to match Labour’s spending plans on transport in order to remove political risk from the industry. Sir Alastair clearly feels there is a danger that the ten-year plan will be shelved should the Tories turn their sudden opinion poll lead into history’s most unlikely election victory.

When I expressed similar concerns about the Tories’ plans in this column four issues ago, I was gently rebuked by Bernard Jenkin, the Tories’ charming transport spokesman (Open Access, RAIL 392). He said I was wrong to say “the Conservatives are likely to do away with the SRA”. Fine – I had thought that the Tories reckoned the SRA encapsulated all they hated about old-style state planning but clearly they have changed their minds. However, he did not correct my next sentence, which was to say that they would seek to reduce state funding for transport. He merely said Labour was likely to do so in the event of an economic recession, so rail supporters would be wise to fear a Tory triumph.

But will Labour itself deliver? Mr Jenkin is right to argue that a recession will lead to cuts, and transport is likely to be a prime victim. Moreover, the GMFC and the OPEC-induced price rises in petrol and diesel have meant there is no chance of any part of the fuel tax escalator being reinstated. Remember that Gordon Brown promised in the last Budget that any such money would be hypothecated for transport spending. So here’s the 64 million-dollar question.

Will the non-appearance of this money mean that part of the ten-year plan has no funding and therefore is already being primed for cuts? Any civil servants with insights into that question are welcome to send me their thoughts on a postcard (or by e-mail).

Where is the spirit of the Blitz?

If Germany were raining bombs on us nightly, as it was 60 years ago, the country would grind to a halt permanently given the behaviour of the police whenever there is the slightest security incident.

A small mortar bomb is aimed at the MI6 building near Vauxhall in south London at 2145 one evening and the police close off the whole of the nearby ‘throat’ into Waterloo until mid-morning the next day. Sure, they were looking for evidence, but you would have to be more than averagely stupid to send your mortars from the middle of a rather busy railway line.

As one industry source put it, “This sort of disruption plays into the hands of those responsible.” He complained that they had closed all the lines, rather than just those nearest the MI6 building which, incidentally, are still a good 100 yards away.

Life must go on, Mr Plod. The train operators should put extreme pressure on the police not to disrupt services in this way. If it had been 100 yards from the M1, would that still have been closed 12 hours later?

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