Rail 645: Can Libdems leaven Tory cuts?

Who would ever have guessed that we are where we are with a ConLib coalition that includes a Libdem junior transport minister and a mishmash of the two parties’ policies and is confidently expecting to still be here in 2015? It would have taken Mystic Wolmar to have peered into quite a few crystal balls to come up with that scenario and there is still an air of disbelief in political circles that this has come about.

 Already, we have a coalition document and an outline of the initial tranche of cuts which we all know will be the first of many. From this evidence, and the identity of the ministers, it is possible to begin to assess what may happen in rail policy over the next few years, with the proviso that it is still very early days.

  The coalition document first. In terms of rail policy, it is pretty much what the Tories had in their manifesto, and it is difficult to discern much leavening from the undoubtedly more positive policies of the Libdems. There was obviously not going to be any problem adopting the policies which were in both their manifestos. So there will be ‘longer franchises’, but precisely how remains pretty vague, far vaguer indeed that the Labour government’s policy published earlier this year.  The intention is to have ‘give operators the incentive to invest in the improvements passengers want – like better services, better stations, longer trains and better rolling stock’.

 But as we all know, very little of that investment can be carried out on a commercial basis and therefore it needs to be matched with extra subsidy, and the chance of that happening is about the same as Blackpool winning the Premiership next year. Remember the Strategic Rail Authority and the 20 year franchises promised by Sir Alistair Morton predicated on extra investment which the Treasury then realised would have to come from taxpayers’ pockets? And as for rolling stock, see below in the cuts section! 

 The other united policy was, of course, support for a high speed line. The joint statement promises ‘to establish a high speed rail network as part of our programme of measures to fulfil our joint ambitions for creating a low carbon economy’ but there is no attempt to resolve the conflict between the two parties’ positions. The Libdems supported the proposals produced by the HS2 government company headed by Sir David Rowlands, while the Tories are intent on a new route diverting from London to Heathrow, a notion that Philip Hammond, the new Secretary of State for Transport reiterated at the opening of the new platform at Kings Cross. Since the HS2 plan looked at all the alternatives, and argued persuasively against the Heathrow diversion on the grounds of cost and poor potential usage, this difference will have to be resolved before any serious work on HS2 can be done.

 The high speed line is, in any case, even more of a fantasy now than it was under the Labour government. Lord Adonis was a politician capable of pushing through a major project like that and worked long enough in the corridors of Whitehall to know how to push it through. His successor does not appear to be the sort of chap who will push for the billions needed for the project when it gets serious and in a climate when cuts are the order of the day.

 Another uncontentious area is Network Rail where both parties promised a measure of reform, though with little idea of what it would be or how it would be implemented. The document merely says that ‘we will make Network Rail more accountable to its customers’ but are those the train operators or the passengers? The coalition is right to address the issue of the governance of Network Rail, as finding ways of reducing its bloated budget is an essential prerequisite to getting spending on improvements down to sensible levels, but it ain’t going to be easy.  

 Then it gets even trickier for the coalition. The Libdems had favoured changing the formula by which regulated fares – season and off peak tickets – go up each year from RPI plus one to RPI minus one in an effort to attract more people onto the railways. This has now been subsumed in the extremely vague ‘we are committed to fair pricing for rail travel’, an utterly meaningless statement.

 More worryingly, the Libdems’ firm commitments to go ahead with Crossrail and other rail projects have been subsumed into the unconvincing version of the statement taken from the Tory manifesto of ‘support’ for Crossrail and electrification, with no mention of Thameslink or any other projects. Crossrail is too far down the line to scrap entirely, a decision which would infuriate the City, but watch for parts of the scheme – such as Bond Street and Whitechapel, and the Shenfield section – being ‘moved to the right’, as delays are called, or even cancelled. As for Thameslink, not mentioned in the document, be very scared.

 Norman Baker’s ludicrously optimistic notion of reopening thousands of miles of new lines by diverting money from the roads budget seems to have been quietly shelved, though Baker himself has been given a ministerial post in transport with a brief that includes walking and cycling, accessibility, and buses and taxis. Surely his price for being in the government must be a commitment to reopen the Lewes Uckfield line which runs into his constituency and has been a cherished project ever since he was elected.

 Finally, there is ‘we will turn the rail regulator into a powerful passenger champion’. That is very laudable, but again thin on detail. How that will fit in with the franchise management of the Department is a tricky question, and here is my only bit of advice to Mr Hammond. Put the lot, including the oversight of Network Rail into a Railways Agency some distance from the Department and staff it with experienced railway managers.

 Now for the cuts. The headline figure of £683m shows that transport is going to be hit hard, as expected, since it represents 11 per cent of the targeted cuts for a department that is responsible for just 4 per cent of government spending. Much of it is smoke and mirrors. Almost half is cuts to local authority grants from central government which means that the promise to fix the potholes, the big transport issue of the election campaign, will certainly not be fulfilled but the rail industry is targeted too. Network Rail has agreed to cut its spending by £100m, half of which is the extra money Lord Adonis said it could borrow to improve the worst ten stations – Crewe, Barking, Luton, Preston and the like – and were ‘being finalised for other areas for savings above and beyond the current tough efficiency targets that our regulator demand’

 The £50m from the stations improvement was, in fact, merely a permission to borrow and can hardly count as a cut, but, more important, how come reduced spending by Network Rail, which is supposedly a private company can be included as part of the cuts. Perhaps this is the pointer to the notion that Network Rail should simply be renationalised, which was suggested to me by a prominent Tory just before the election.

 The other cut aimed at the rail industry is potentially far more serious which is an unspecified amount   The order that is most at risk immediately are 23 EMUs which were intended for London Midland and Manchester – Scotland, but clearly the Thameslink order, already delayed, is being kicked further into touch. And as for the Intercity Express Programme, being reviewed by Sir Andrew Foster, forget it.

 One extra cut which will not be welcome by the train operators, and that is the imposition of limits on first class travel for ministers and, more important, senior civil servants of whom there are far more. This measure, which is likely to be imitated by private sector suppliers to the government, too, will hit the train operators hard, and raise questions about the future of first class, already abolished on Chiltern.

 What characterises all this is a lack of any coherent objectives and strategy for the rail industry. The high speed line is presented as a green alternative, but in fact, as I have pointed out before, buried deep in the HS2 report was the fact that it will be broadly carbon neutral because so many of its passengers would either not have travelled otherwise or have taken their journey on conventional trains which use less fuel. Apart from HS2, there is no drive to attract more people onto rail, or to attempt to damp down growth of car use. Indeed, at the first press briefing by Philip Hammond, he was pushed into saying that he would end Labour’s ‘war on the motorist’, a conflict that utterly passed me by. His commitment to end this phoney war was demonstrated in the coalition document by promising not to install any more fixed speed cameras, a disgraceful concession to Daily Mail logic which the Libdems should be ashamed of signing up to.

 Indeed, overall, as in much of the coalition document, the Libdem leavening of the Tory policies seems to be in rather short supply. Watching Vince Cable saying, very unconvincingly that the reason he now accepts that £6bn worth of cuts had to be made quickly, having campaigned against such a move in the election hustings, suggests that expediency rather than principle will be the order of the day. Certainly on rail policy there appears to be little left of the Libdem ideals and Mystic Wolmar wonders just how quickly it will take for cracks to appear in the coalition. Given that there is so much at stake, however, don’t hold your breath. This coalition, with the Libdems having to hold their noses and their tongues, is set to last years, rather than months.

  • Dan

    Lots of interesting points here:

    Re longer franchises:
    “The intention is to ‘give operators the incentive to invest in the improvements passengers want – like better services, better stations, longer trains and better rolling stock’.”

    – yes, and as you say this seems unlikely without subsidy – but I suspect the largest impediment is the dominance of the bus industry (or bus bandits as Bob Crow might call them) who always seem to have had a relatively low investment / high profit yield model. If they did not dominate UK rail I wonder if things would be different – ie if franchises were more dominated by continental rail operators – eg NS / DB / SNCF etc – or rail operators from other parts of the world? Or do those who use services they are part of the franchise for see no significant difference in terms of quality?

    “Norman Baker’s ludicrously optimistic notion of reopening thousands of miles of new lines by diverting money from the roads budget seems to have been quietly shelved…
    Surely his price for being in the government must be a commitment to reopen the Lewes Uckfield line which runs into his constituency and has been a cherished project ever since he was elected.”

    Well, it is one re-opening that makes sense, but the lib dems seem so desperate to have some bit of power (after decades of fringe relevance) that they have not made any meaningful demands at all as far as I can see – at least not things like this. It may be that they are desperate to avoid anythng happen to the coalition before this vote on electoral reform (which they will lose after the Tories spend lots of Ashcroft money opposing).

    Baker is one of the more progressive ministers I’d guess – but it would make more sense to have put him in charge of rail (Some blogs or articles on his area of responsibility would be good Christian – is he doing anything / making a difference)?

    Mind you, I’ve wondered if ity might be possible to cut re-opening costs of lines by using recycled materials – like sleepers made out of old lib dem sandals cast off in the party’s lurch to the right, or left behind as their members leave in droves….

  • Dan

    http://www.guardian.co.uk/commentisfree/2010/jul/02/transport-policy-red-for-danger-editorial

    see reader comment number 1: “Then run a sensible integrated transport system, as a single national service and not a mass of loss-making ‘competitive’ enterprises. Put someone like Christian Wolmar in charge.”

  • Greg Tingey

    Would it save money to do away with NR completely, and allow real railway companies, who maintain and Build (!) their own track?
    I think that Chiltern have already said that they could build evergreen 3 cheaper if they did it themselves??
    How you fit frieght-operators in, I don’t know.
    We’d have to re-invent the RCH, that’s for sure!

  • RapidAssistant

    Depends what you mean by a “real railway company” Greg – does anyone actually know what this means anyway? Chiltern certainly are a special case, and they are often quoted as one of the “successes” of privatisation but not only do they have a long franchise, but also remember that the Chiltern route is also a fairly self-contained line with not that many operators running over it. There is none of the politics that surrounds the ECML and WCML where there are multiple operators (and freight companies) fighting for paths and then the open access can of worms thrown in for good measure, and only exposes the bureaucratic failings of the current structure.

  • Dan

    From:
    http://www.guardian.co.uk/business/2010/jul/12/transport-public-sector-cuts

    QUOTE
    ” Baker said the DfT was being forced to make unwelcome decisions because of a “fantasy” spending programme implemented by the previous government. “It was callous electioneering. As someone who is regarded as being to the left [politically] I feel so angry. Labour’s policy of promising things it could not deliver was dishonest.” ”

    I’M STAGGERED – this is from a man who stood on a manifesto of a) cutting rail fares and b) re-opening thousands of miles of Beeching closed lines!!!!

    One if not both of those was fantasy before the election – so that was dishonest surely. The other improbable (given the Lib Dems knew of the need for cuts – or Vice Cable claimed to anyway).

    What a total fantasy land these lib dems live in. Not to mention ‘honesty’…don’t make me laugh Norman…

  • Richard Vote

    My view of the Lib Dems was jaundiced by the sight of Mr Clegg getting media coverage at the British Legion Edinburgh factory at the same time as the LIb Dems in Aberdeen were booting the British Legion off a car park on land ceded to them by the feu holders at the end of WW2!!! Says it all actually.

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