Rail 705: Greening pays the price for principles

Here we go again. Another year, another transport secretary. For no fault of her own except to stick by government policy, the latest incumbent of that hot seat, Secretary of State for Transport, has been despatched to International Development, apparently spitting furiously that she did not go into politics ‘to hand out aid money’.

Apart from the fact that rather suggests Ms Greening was not quite as nice as some people thought since handing out aid money must be one of the most rewarding jobs in government, the move could prove quite disastrous for the railways. Don’t panic yet as Corporal Jones might have said, but for the second time within a year, there is a new transport secretary with an awful lot of work to brief themselves up while a very full inbox mount up.

When Greening took up her post last autumn, I wrote an open letter – I must confess, a rather fatuous but amusing journalistic device – setting out the issues she faced on the railways (Rail 682). It makes rather salutary reading since so many of the issues remain unresolved and will be in Patrick McLoughlin’s inbox, pretty much in the same form.

Most remarkably, and I had forgotten this, I suggested that she had no hope of revisiting the Thameslink Siemens contract which had just been announced but, of course, nearly a year later there is still no closure. The contracts have not been signed and Mr McLoughlin, as a Derbyshire MP, will have a particular interest in trying to further the cause of Bombardier, to which he has, in the past, given strong support. A thorny one to start off with.

I mentioned the McNulty reforms. This remains very much work in progress. The Railway Delivery Group does appear to be making some progress behind the scenes and the alliancing scheme between Network Rail and South West trains is a fascinating test bed for the concept. However, there is undoubtedly still a gap between the savings to be gained from franchising which are embedded in the investment plans for Network Rail and any explanation as to how they will be achieved. The row between FirstGroup and Virgin triggered by the acceptance of First’s supposedly more lucrative bid was undoubtedly driven by the Treasury’s concern over the rail industry meeting its financial targets.

Then we have HS2. Here, Ms Greening played her hand well. She made some adjustments, recast the route slightly and batted for the project. However, the departure of Cheryl Gillan from the government as a result of the reshuffle has unleashed a strong opponent of the scheme who formerly had been silenced by the requirements of Cabinet protocol. Tory opposition to HS2 will undoubtedly coalesce around the former Welsh Secretary, forcing Mr McLoughlin to defend the scheme strongly against members of his own party.

The two other issues I covered in the letter, franchising and fares, are also unresolved. I discuss franchising in the separate item on the Virgin – First megabattle, but fares is one which Mr McLoughlin will have to deal with most immediately. So far the projected rise in January is more than 6 per cent but as the date approaches, the pressure is going to mount to reduce that, especially given the continued postponment of tax rises on motoring. Again, Ms Greening did well last year to persuade the Treasury to agree to a RPI + 1 per cent, rather than 3 per cent, and Mr McLoughlin will clearly be trying to repeat the trick. After all, this is a government that does more U-turns than an average London taxi.

Then there are the non-rail issues. The roads programme, scaled back dramatically by successive governments, is now being stepped up under the promise of more infrastructure, but so far this has been very vague. Meanwhile, pot holes mount up and there is little money to pay for maintenance. Aviation remains a headache although all the fuss about the Third Runway at Heathrow is pretty theoretical at the moment since the Tories cannot go back on the pledge not to build the airport during the current Parliament. There are other odds and sods left in his in-tray from the days of Philip Hammond (remember him?) such as the ridiculous idea of increasing motorway speeds to 80 mph and the rather reductions in road safety spending which may well rebound on the Tories rather badly if casualties continue to rise.

However, it is railways that will occupy much of Mr McLoughlin’s time, as is usually the case with transport ministers. We have, at the moment, absolutely no idea what he thinks about all these issues. Being a chief whip is an entirely behind the scenes role and even though Mr McLoughlin was a junior transport minister that was so long ago – more than 20 years – that even if he did learn anything, it’s likely he forgot it. His brief, in any case, did not include railways.

So yet again, transport has been used as a revolving door for politicians whom the Prime Minister wants to reward but not too much. Forget about expertise, or interest or political views. It’s sheer expediency and deeply damaging to an area of policy that is vital to the economy and people’s lives. In the two decades I have written about transport, there were only two (a half) transport ministers who seemed really interested in the job and wanted to make a difference – Steve Norris and Andrew Adonis. The half is Ruth Kelly who was not there very long but was bright enough to understand the issues (oh, ok, and gave millions to Cycling England on whose board I sat).

As for Ms Greening, I think she left as little impression as others whose tenure at transport has been all too short (remember Geoff Hoon, for example, the most supercilious and smug man I have ever met and who Adonis told me refused ever to talk with him about transport; or Brian Mawhinney, another one who lasted less than a year, and one of the least pleasant people I have come across; and so on).

Greening deserves praise for the couple of actions I have mentioned above, but she did not help her cause of wanting to stay at transport by disappearing on holiday in the summer when two major transport issues were coming up – rail fares and the West Coast franchise. Indeed, she made rather a fool of herself over the later, saying that the franchise would be signed regardless when, in fact, under EU rules once the Virgin challenge emerged, there had to be a delay. Perhaps she might have clung on had she been around to deal with these issues in her very matter of fact way, which was one of her strengths.

Nevertheless, of course I wish Mr McLoughlin well. While he may be delighted to get an important brief after the anonymity of the whips office, I suspect that he may soon be longing to return to the joys of backstabbing and quiet words after trying to deal with the controversies affecting the railways and, indeed, the rest of his transport brief. He is an unknown quantity. His speech to Tory party conference will be particularly interesting to watch, not so much for the content, as the tone – we may then find out what his leanings are. Remember, transport secretaries generally fall into the pro-roads or pro-rail category. It will be interesting to find out which one he falls into.




Virgin and First battle goes beyond West Coast


I refrain from asking the Wolmar question, ‘What is franchising for?’ too often at the risk of boring readers, but there’s no ducking away from it in the light of the Virgin v FirstGroup contest on the West Coast. The issue has already thrown more light and attracted much more public attention on the franchising process than any other previous contest.

My conclusion a couple of issues ago that the Department could not possibly have accepted a bid that is likely to go the same way as GNER and National Express on the East Coast may have been too hasty. The more one looks at the implication of a growth of 10.4 per cent per year for 13 years, the less likely it seems. Most notably, of course, if HS2 goes ahead, work will start at Euston by the back end of this decade and that is bound to cause the sort of disruption that will deter passengers. And a few weekend closures will dent the figures, too.

However, the potential weaknesses of the FirstGroup bid should not necessarily allow in Virgin. Indeed, if Virgin wins its legal battle, the whole process is likely to be restarted with the juicy irony of Directly Operated Railways (the government’s own company) taking over temporarily will lead to inevitable questions of why on earth the government sets beauty contests for the railways predicated on who makes the most optimistic growth forecast.

At the Commons Transport Committee on September 10, Virgin has criticised the whole franchise process, saying it is deeply flawed. I think that this is a case of be careful what you wish for. As I have written many times, there is no sensible way to operate the franchise process as it is inherently flawed.

Whatever happens, the result is likely to be a more transparent franchise process. Currently the rules say that companies are not allowed to publicise what’s in their bids. That seems designed merely to protect the Department, and keep the public in the dark. We may not get an answer to the Wolmar question, but at least we will be better informed over the bids.

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