The pace of events is hotting up on the railway, making it one of those times when there is enough happening to fill three or four columns. In the few days running up to the Budget, there was the announcement of the sale of High Speed One, the revelation that Iain Coucher the head of Network Rail is leaving (as predicted by Mystic Wolmar), the release of the preliminary findings of the report on the cost of the railway commissioned by Lord Adonis and the launch of the franchise review, coupled with the abandonment of the bidding process for the two running out – Essex Thameside and East Anglia. Oh and then there was also the news that Stagecoach had won its battle with the Department over the terms of its franchise and when precisely the company was entitled to government help under the cap and collar arrangements, which cost the government £100m which will certainly have the new ministers wondering about the competence of their officials. And finally, tee hee, it slipped out that one consequence of all this is that the nationalised franchise, East Coast, is going to stay in public hands longer than originally expected, a strange consequence for a Tory dominated government.
So discipline is called for, just as it is in the economy, and several of these subjects will have to be left to another day. Just to make things even more difficult, I met the new transport secretary, Philip Hammond, for a cup of tea on the day before the budget and that is worth reporting on too. He certainly made clear that saving money is the top priority above all else and the rail industry is going to have a hard job persuading him that it is good value for taxpayers’ money. Indeed, I was lucky even to get a cup of tea since a memo has gone out from one Catherine Cornwell, a senior adviser in the Department, warning that anyone seeking to have anything other than water at meetings in Great Minster House will have to ask her and generally the answer will be ‘no’. Mr Hammond, though, got a mug while I only was offered a cup, though the saucer did have one sugar lump as a bonus. No biscuits though.
The new minister is very clever, iconoclastic and keen to ask lots of questions even if they seem dumb or basic. But clearly just from the tone his questions, his instincts lean towards looking at things from the motorists point of view. Just as an example, our conversation started with a discussion about level crossings, a big issue in his constituency (Runnymede and Weybridge) which includes Staines and Egham where there has been consternation at the plans to build a western approach to Heathrow Airport as it would involve prolonged closure of several crossings in these towns.
Mr Hammond said he had found it surprising that trains automatically received priority. ‘Sometimes, there are long queues of traffic waiting for a two coach train’, he told me. He had found that the rules governing this stretched back to the early days of the railway. I did not trouble to explain that allowing cars priority would cause chaos to rail timetables, but instead pointed out that trains had got there first. ‘Did they?’ he asked, suggesting that roads existed before railways. Indeed, I answered, but when trains came along, they were far more important than the road traffic, and, in any case, far from motorists being disadvantaged, as he suggested, Network Rail has to pay for crossings to be removed.
This is typical Hammond. He is asking questions about all kinds of convention and refuses to accept pat answers. Away from the railways, for example, he has asked his officials to explain why there are advanced stop lines at traffic lights when ‘cars go faster than bikes, so it seems illogical’. Perhaps he took in the answer I gave him about advanced stop lines making the roads seem safer to cyclists and sending a message to motorists that cyclists had a right to be on the roads, but I suspect he did not as it was not the answer he wanted.
I ask him if he really believes that Labour instituted a ‘war on the motorist’ which he feels compelled to end. Mr Hammond’s statement to that effect was the headline stealer of his first encounter with the press just a couple of days after his appointment as secretary of state. He had, in fact, been rather ambushed by Ray Massey, the Daily Mail who used the term ‘war on the motorist’, a Mail perennial but his answer is equivocal: ‘Well you could say yes, or you could say no’, and went on to give a rather uncontroversial view about the importance of cars and roads in the transport mix along with trains and planes, and never quite answered the point about the non-existent ‘war on the motorist’
Back on the railways, he suggested that while he and I might be coming from different ideological positions, our views on various aspects of the railway might not be that different. In what respect, I asked? He mentioned the cost of running them and the need for longer franchises, and we discussed that for a while. Clearly, the consultation exercise on franchising has thrown all the balls up in the air, and while the result is likely to be longer franchises, the train operators might find that Mr Hammond’s intellectual rigour means that they will not get the bonanza from this government which they are clearly expecting.
We did not get round to discussing Network Rail in any detail, but it is clear that the announcement of the departure of Iain Coucher is connected with the arrival of the new government. Mr Hammond has made clear that no stone will be left unturned in the search for savings and that Network Rail is high on the list of targets. He said that ‘everyone agrees that the costs are too high’ and that they will have to be brought down.
Coucher’s departure is both timely and untimely. Coucher’s abrasiveness and overall refusal to listen to other people’s points of view would have resulted in, at best, a difficult relationship with Mr Hammond, who is determined to make his mark by bringing Network Rail to heel. It would not have been helped by Coucher’s view, expressed to colleagues, that the Tories would be eating out of his hand. On the other hand, Coucher’s departure comes at a bad time for the organisation given the challenges it faces with the new government and the new climate of austerity.
However, there is no doubt that Coucher had to go. He was the right man to sort out the mess inherited by Railtrack but only as deputy to the far more affable and person-friendly John Armitt. Coucher never had the right character to be the boss. As an insider put it to me, he created ‘a general air of misanthropy’ that was not conducive to an organisation in an industry that needs cooperation above all. At times it seemed that Coucher was at war with everybody – the operators, the government, the media and even his colleagues. As mentioned before in this column (Rail 633), he deliberately seemed to be distancing the organisation from the previous government’s policy on matters such as electrification, the high speed line and station investment, which did not seem a clever strategy for an organisation entirely dependent on government spending.
And when the Mail on Sunday broke a story about the fact that numerous women had left with big compensation payments after complaints of sexual harassment, rather than clearing the air with a proper investigation, Coucher merely called upon the services of the very expensive and aggressive libel lawyers, Schillings, to try to close down any discussion. Coucher’s fate was sealed by his response to a Times article about the fact that he earned three times the amount David Cameron receives, which was to suggest that every one of Network Rail’s employees was worth their salary and that it was the PM who was underpaid. Not the spirit of the times. He did not deserve his ridiculous £1m plus salary and bonus because he was not a Brunel or a Robert Stephenson, with a great entrepreneurial risk-taking spirit, but a rather arrogant and chippy man at the helm of an organisation with a fixed income and a reputation for, as my insider put it, ‘doing less for more’ And now his obduracy over his inflated wages has been his undoing – I bet his next job will not pay him as much as this one which means he may not be able to keep up the estate in Scotland he bought on taxpayers’ money.
So the problems are left to his successor. Already, there are fraught discussions going on between Network Rail and the government over whether to re-examine the £32bn Control Period 4 settlement which takes the company to 2014 or whether some descoping can take place to make savings without such a radical reassessment. With Coucher now a lame duck, his likely successor, Robin Gisby, currently the operations director, is leading these negotiations, a task to which he is far better suited than his boss.
It is a time of rapid and fundamental change in the rail industry. The next few months will be presented as evolutionary change by the government, but in fact one of those major revolutionary shifts which have happened periodically since privatisation 15 years ago is taking place. We are going to end up with a very different set of relationships between government, the operators, Network Rail and the regulator. The crucial question is whether the dysfunctional structure of the industry means that instead of relatively painless savings that would result in sensible reductions in bureaucracy and waste, we get truly damaging cuts that will have an impact on the industry for many years.