Rail 498: Could SET set the scene for publicly run Kent franchise?

At a Labour conference fringe meeting, Transport Secretary Alistair Darling appeared to hint to CHRISTIAN WOLMAR that the Integrated Kent franchise could be run by the public sector.

It is easy to see why ordinary people are so turned off by politics that they have been shunning the whole political process in increasing numbers. The debate on renationalisation of the railways at the Labour party conference was a perfect illustration of the way that politicians refuse to debate the real issues and how set-pieces between right and left leave the general public none the wiser.

The debate on renationalisation of the railways was a genuine opportunity for a proper discussion of an important issue. Cleverly, the unions, led by the new general secretary of the TSSA, Gerry Doherty, had focused not, as they had before, on rather fanciful calls to renationalise the whole railways but on a specific point – keeping South Eastern Trains in the public sector.

Now SET happens to have been temporarily renationalised by accident. The Strategic Rail Authority grabbed back the franchise last year when it finally realised that shelling out more funds to poor-performing operators was neither strategic nor authoritative. The idea was that SET would become part of the new Integrated Kent Franchise which would include domestic services on the Channel Tunnel Rail Link and in the meantime it would be run by managers appointed by the SRA.

And, by all accounts, they have done a reasonable job with a 2% reduction in delayed trains over the past year. Consequently, there has been a strong campaign by Labour MPs and the unions to keep SET publicly run. As I suggested in this column last November ( RAIL 475), it would seem to provide a useful public comparator, making it easier for the SRA (and now its successor) to ascertain costs. However, the SRA steadfastly refuses to countenance the notion that it should stay in the public sector, arguing that this was not allowed under its objectives and guidance (which are set and changed by ministers).

But in the debate, all the respondents to the union motion trotted out the line about renationalisation costing £20 billion that would be best spent elsewhere. This had come from a Labour party briefing – although the £20bn figure varied between £15bn and £35bn according to various reports. One of the uglier sights at party conferences is seeing the loyalist foot-soldiers being put up to speak words put in their mouths by the party apparatchiks, clearly demonstrating they had no understanding of the issues or the history involved. It was the political equivalent of painting by numbers.

Alistair Darling responded to the debate in a vain attempt to prevent a government defeat by repeating the £20bn claim. Where does this figure of £15-35bn come from? Presumably it is made up of the estimated cost of buying the rolling stock and paying off the debt of Network Rail.

I am not suggesting for a moment that it would be sensible to spend that money, but the figure is pretty misleading. First, buying the rolling stock would save on the leasing costs of more than £1bn a year, which is worth, if you securitise it (that is, roll it up as a capital amount), £10bn. And as for the debts of NR, currently £14bn, some day, some century, a poor hapless Chancellor is certain to get landed with those anyway. So the real cost, if you wanted to renationalise the railways, would be much less.

In any case, as we all know but are not allowed to say, NR is a publicly owned company, because ultimately it is funded by the taxpayer and the government will always stump up for its debt. It owes its current ‘private’ status simply to Gordon Brown’s desire to keep the railways off his balance sheet. Remember, the leaked version of the rail review I was sent ( RAIL 490) specifically mentioned the possibility of NR ending back as on the government’s books.

However, that is not what the TSSA was suggesting and it was deeply dishonest of all those Labour loyalists to pretend it was. I was chairing a fringe meeting attended by Tony McNulty, who has replaced Kim Howells as railways minister. I used the occasion to press him on this point when Gerry Doherty asked a question and the minister started responding again that it would cost £20bn.

When I pushed him, saying that was not the question, he blurted out “no, we will definitely not keep it [SET] in the public sector.” McNulty got in a bit of a bluster here, accepting that SET was performing better than Connex, but then quickly adding that no-one could do worse. However, he gave no explanation of why there was this dogmatic insistence on privatisation – I thought his boss, Tony, was into ‘what works’ – and afterwards, when he had recovered a bit, he said that much of SET’s improvement was down to NR getting its act together.

At another fringe meeting, I got a slightly different and more promising answer from Alistair Darling. When I asked about having a public sector comparator, he said “we already have one and that is South East Trains.” When I replied that they were going to reprivatise it, he seemed to leave the door slightly ajar by saying the Integrated Kent franchise was at an early stage. Interestingly, he quoted a column I had written where I had argued that the key aim of the rail review would be to find the right place for the interface between the private and public sectors in the rail industry.

So does this mean that the Integrated Kent Franchise is potentially going to be a public sector-run franchise? Or even that it is being considered? That would be a sensible basis for establishing costs – a wonderful mix of commuter and high-speed services – which would be able to offer a sensible comparison to most franchises.

What is more remarkable is that in a littlepublicised announcement, the government has effectively renationalised NR’s debt in September by guaranteeing that all its borrowing would be backed by the treasury, thus saving £190m a year in interest. The optimist in me hopes Darling is finally using his experience in the post to make some brave decisions… Sadly, the realist in me suspects he is simply stalling any decision in the hope that he is rescued from the poisoned chalice of transport before he needs to really think about it. Now that really would be another great missed opportunity.

Lost property

On the way back from Brighton, I stupidly left one of my bags on the train. (My excuse – lame but unique – is that I was distracted by a staggeringly beautiful French woman who was giggling at Nietzsche’s The Anti-Christ which she was reading, so I fell into discussion with her and continued the chat as we left the station together – she particularly recommends his Twilight of the Idols if any of you are interested).

It was not until I had got out of the Underground at Archway that I realised my mistake and tried to phone to find out if the bag had been found. National Rail Enquiries gave me a number for Southern Railway, but they passed me on to Lost Property. That turned out to be a lady in an office in Victoria which seemed to be run on behalf of NR and said “we only get the stuff a few days later.” She was bemused as to why I had been given her number and passed me on to SouthCentral operations, who said nothing had been found but the bag may be with the platform staff.

“But they only drop the stuff in from time to time, so we can’t tell you if it is there or not.” And it was impossible to phone them. But the chap, who was doing his best to be helpful, also gave me the Brighton number. The friendly fellow worked out what train it would be on, and rushed off to meet it. He phoned back and said, “No the bag’s not there, but the cleaner has handed it to Operations Control at Victoria.” More phone calls got me back to the same guy at Southern who said he could not contact the platform staff, especially as it was rush hour. “But you can come down and try to find it yourself,” he added helpfully.

I returned to Victoria where the bag was handed back to me by a friendly lady. All individuals I dealt with were kind and polite, but clearly the system is not customer-friendly. One for management to sort out, please. And next time, Nietzsche will not distract me.

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