One of the most spurious justifications for rail privatisation was that it would ‘get government’ out of the railways’. The very creation of Great British Railways which involves borrowing both the name and the logo from the old state owned BR is testimony to the impossibility of that aim.
The state and the railways will always be intertwined for two reasons. First, railways are a vital industry without which the country can barely function. Yes, only some 7 per cent of journeys are made by rail, but the rush to keep the trains going during the pandemic showed that they are an essential part of the transport mix. Despite all the franchise failures and over post privatisation shenanigans, the railways have been kept running…and will continue to be.
Secondly, of course, the railways need subsidy and government will therefore always be interested in how its money is be spent. In an ideal world, as in the 1980s heyday of British Rail – as described in my forthcoming book British Rail, a new history due to be published in June – the government would leave day to day matters in the hands of railway professionals while providing strategic guidance and oversight to ensure that they were providing the service needed by the public.
That should be the aim of those developing the new structure of the industry. Finding the right balance between unnecessary interference while ensuring the railways fulfil their vital social needs is the daunting task facing the designers of Great British Railways.
Moreover, they face the added complexity of trying to work across the very different structures found in the four countries making up the United Kingdom. Indeed the ‘British’ bit is somewhat problematic given that this implies that the new organisation will be responsible for the railways in Scotland and Wales where there are different but equally complex arrangements between the state and the railways. Northern Ireland is a third example of a different type of situation and indeed, this story also has bit parts for NedRail and SNCF, respectively Dutch and French state railways.
The current and past experience of each of these countries has potential lessons for the soon to be created Great British Railways to consider when drawing up the new structure of the railways, and demonstrate how difficult it will be for the organisation to achieve its aim of setting out a unified structure for the whole of the ‘Great Britain’ that has provided its name!
In Scotland, the situation is currently just changing. Until April 1, the railways were run on a franchise basis by Abellio, the company owned by the Dutch state railway, but the contract has just been terminated by the government agency Transport Scotland which will now take over responsibility for the railways. The intention is that services will be operated by an ‘arms length’ company which means that while services are state owned and the overall budget will be set by the government, the railways should have a good measure of independence to make commercial decisions. The Scottish government is seeking to ensure this is a permanent renationalisation, given that the franchising of the railways has not been popular with the public.
There is, though, an added complication. There is a partnership arrangement with Network Rail, the ScotRail Alliance which creates a sort of integrated railway. It is led by Alex Hynes who effectively works for both companies and his salary of £330,000 per year has recently caused a bit of a media storm north of the border. Following the merger on April 1, Hynes will now be working for the British state owned Network Rail and the Scottish state owned ScotRail. Not an enviable situation.
Meanwhile in Wales, the situation is also fluid. Because of the pandemic, the Welsh government took over the Wales and Borders franchise in February 2021 because it was losing so much money. It was a joint venture between Keolis (which is 70 per cent owned by SNCF, the French state owned company) and Amey, the engineering company. The latter was principally involved because of the refurbishment and expansion of the Valley Lines for which Transport for Wales has received a £350m grant, and retains a role in the project. However, services are now being provided by Transport for Wales, but as yet this is a temporary arrangement. The Welsh government would like to retain this arrangement permanently, given the huge unpopularity of the franchising system when it was run by Arriva for 15 years running up to 2018 and the recent situation with Amey Keolis due to the pandemic, which highlighted the difficulty of passing on the revenue risk to a private operator. Moreover, unlike in Scotland, the Welsh government has been given the section of the Network Rail infrastructure covering the Valley Lines in order to enable it to determine the scale and scope of the works.
However, despite the establishment of this partially integrated structure, the UK government has not made any decision about the long term future of the Welsh railways. Handing over the rest of the infrastructure would be politically contentious given that it includes English towns such as Chester and Shrewsbury, and even handing over the franchise allocation rights to the Welsh government is essentially an encouragement to further devolution, which does not really fit the wider Conservative government agenda.
It seems that Northern Ireland is not in the purview of Great British Railways but nevertheless represents an interesting contrast with events on this side of the Irish sea. It is, to misuse a famous quote, a very different country. It has always amused me that despite claims that privatisation was made necessary by EU law, Northern Ireland railways have remained an integrated state owned operation. In fact, it is even funnier that according to the Office of Road and Rail website, regulations to separate at least notionally the railway infrastructure and operations came into force as a result of European Union legislation only on January 23 2017, more than six months after the Brexit vote. Moreover, while Northern Ireland railways have been left virtually untouched by successive UK governments, they are subject to economic regulations set by the ORR for ensuring that access charging is in line with Northern Ireland regulations and creating the right pre-conditions for competition – though that is hardly likely ever to happen on a network of just 225 miles (which incidentally pre-pandemic carried an impressive 15m passengers annually). It is, laughably, the ORR which enforces the separation between track and train demanded by the EU which we, euh, left two years ago. Just to add further complexity, Accidents are investigated by another UK body, the Rail Accident Investigation Branch and the ORR is obliged to consult with the Irish Commission for Railway Regulation south of the border.
There is expectation that a Railways Bill will be announced in the Queen’s Speech which will be in the week after the May local government elections. However, even this little run through of the relationship of the railways and the state across the four countries shows the amazing complexity that the creators of Great British Railways face.
This diverse set of situations will have to be unpicked and laid out in new regulations by the team at Great British Railways. It will not be an enviable task, but at least these different models give the opportunity to consider which is best. Unfortunately, the ideologically imperatives of the Tory government will prevent the simple creation of an integrated railway throughout the four countries, which would undoubtedly be the most efficient and economic solution.
Rishi no longer so dishy
The Chancellor Rishi Sunak, much lauded for his generosity during the pandemic, is showing his true colours as a born-again Thatcherite insisting on austerity measures despite the obvious need for Keynesian type policies to lead us out of the recession. Moreover, by giving in to the roads lobby and agreeing a 5p cut in fuel duty that will cost the Exchequer a stunning £5bn. Yet, given the volatility of the market with numerous ups and downs, few motorists will notice the reduction and, in any case, there are doubts whether it will be passed down to the price on the pump.
On the other hand, not only has the capital programme for £27bn of spending on roads been maintained, but the rail fares rise went ahead as planned, despite similar – but far less effective – protests. With the Ukraine war leading to calls for increased defence spending, and the obvious rising demands on the health service, this lack of coherence in transport policy means that a once in a generation opportunity of using the economic situation to encourage rail use while discouraging car use has been lost.