Rail 975: The secret negotiations over rail reform

So what is happening in the Department for Transport while the railways steadily fall apart before our eyes to the consternation of the travelling public? Well, actually, a lot but behind closed doors and with no public debate. Nevertheless, the outcome of the fierce discussions taking place in Whitehall will determine the future of the railways for many years to come.

After having gone through three transport secretaries in a matter of weeks, Mark Harper found himself sitting in the chair when the music stopped. He is a bright, engaged chap – ‘a proper politician’, an inside source told me, who did not think the same of his predecessor but one, a Mr Shapps nor the failing fellow before that – who had little prior knowledge of the railways when he got the job but is ready to learn fast.

The key issue is over the extent to which the plans set out by the Williams Shapps report will be implemented. A well informed article in the Sunday Telegraph on January 8 by Oliver Gill, their chief business correspondent, revealed that three former rail ministers – Paul Maynard, Andrew Jones and Stephen Hammond – had been dropping in to the Department for Transport to try to persuade ministers to move away from the model set out by Williams Shapps. The interesting point here is that this trio are not headbangers of the far right of the party, and they are all among the more knowledgeable ministers who have passed through the doors of Great Minster House in recent years. But they are obsessed with keeping the private sector centrally involved in the railways. They feel that the agenda was hijacked by Boris Johnson along with his powerful transport adviser, Andrew Gilligan who, as one of the sources of the Telegraph story put it, wanted ‘complete control of their own train set’. Under this model, they see the private sector as being ‘throttled’.

Their main beef is simple, though the potential solutions are not. They feel that the model set out in the report of an all powerful Great British Railways will be too restrictive for the private sector. They argue it will grant GBR power over every aspect of the railway from timetabling to rolling stock. They point out that the trigger for the establishment of the Williams report (as it originally was named) was to sort out franchising but, in fact, the whole structure of the industry changed when Covid led effectively to its abolition. So, they argue, Willams Shapps is a solution to a problem that no longer exists.

The ex-ministers have been influenced by the work of the Rail Partners, a body which has been established to represent the interests of the large corporate players in the post Williams Shapps world. A document published by the fledgling organisation, in conjunction with the GBR transition team, argues very strongly that the railway should remain as a partnership between the public and private sectors. It says, quite specifically, that the railways ‘need the creativity, innovation and efficiency of train operators to succeed’.

In my view the very idea that only the private sector can deliver innovation and efficiency is balderdash. As I demonstrated in my book on British Rail, the structure it created at the end of its life, when there were three commercially minded passenger organisations providing good services reasonably efficiently, was the heyday of the railways in the UK. That is what intelligent Tories ought to be working towards – a state owned organisation, with a free hand from ministers, to run a commercially minded organisation with social obligations and a set budget. It needs to be integrated in order to get rid of the expensive and inefficient separation between the various parts of the industry.

However, that is not on offer because of Tory anti-state ideology, so the choice is between a very centralised and powerful Great British Railways or the re-creation of a private public partnership that has run the railway for the past quarter of a century. The result will be a compromise born of the necessity of appeasing Tory ideology which insists that only the private sector can deliver an efficient and effective railway in the face of the irresolvable problems that were exposed by Covid. The truth is that as soon as private sector organisations are involved, the huge bureaucracy needed to sort out delay attribution and revenue allocation will be recreated. Moreover, as soon as you separate out track from infrastructure, you end up with the same mistakes that led to the timetable chaos of 2018 which started the whole Williams Shapps saga.

The tragedy is that at the moment we have the worst of all words. The private operators are running the trains without the incentive or the tight regulation needed to ensure they provide a good service and we have ended up with the Nobody Gives a Damn railway. That is not the result of the fact that all aspects of the railways are now effectively publicly controlled but, rather, the structure that has emerged out of the Covid crisis which is that costs are being controlled by the Department for Transport, while the revenue goes to the Treasury.

The plotters are trying to square a circle. The truth is that very little of the growth on the 20 years running up to Covid was a result of their innovation. Most was down to exogenous (Gordon Brown’s favourite word) factors that were not under their control like petrol prices, growth in commuting and rising numbers of university students. This myth about the private sector expertise being essential for the future health of the industry is a nonsense. But with this government, there is no future in trying to challenge that.




A cab ride and a few predictions



John Smith, the boss of GB Railfreight (not to be confused with Freightliners as I did much to his consternation!) is very savvy in his relations with the media and offers me cab rides occasionally to show how the railway is functioning. They are great learning experiences, even though my trainspotter days are long over, because they provide a real insight into the condition of the railway.

And just from my three hour ride from Wellinborough to the middle of the Peak District, it was very clear that something is fundamentally wrong with the industry. The track and its surrounds is a complete mess, looking more like the aftermath of a civil war than a functioning railway. Along with the overgrown weeds and crumbling walls, there are old rails littering the four foot and occasionally the six foot, broken doors of electronic cabinets that are vital for the signalling and lots of, principally railway-generated, junk.

Of course that is a legacy of having long ago dispensed with people who walked the track and took care of their patch, as they have all been replaced by yellow equipment whizzing by at speed to detect faults. That, of course, is progress and far safer, but it does not mean that the task of tidying up the railway should have been totally abandoned.

GB Railtfreight is thriving, having over the past quarter of a century transformed from a tiny business with a handful of staff to a profitable enterprise with a turnover exceeding £340m. It is an example of what real entrepreunership can do on the railway, but sadly there are not many other examples. Most of the private sector businesses in rail are simply gaming the system, trying to outdo or outthink the regulator and the government  in order to generate profit. Smith puts his view of how the system should work quite simply: ‘The government should provide the investment that then allows private enterprise to flourish’. It’s difficult to disagree with that, except to point out that the private sector all too often expects the government to guarantee its profitability. That’s what I have always called ‘pretend capitalism’ but by and large does not apply to GB Railfreight which has raised private money for investment that would not have otherwise been available to improve the railways.

By the way, you can listen to an extended interview with John Smith on my Calling All Stations podcast, available on my website and all the usual podcast sites.


Mystic Wolmar’s six quick predictions for 2023:


1) The strikes will continue through to Easter and will only be resolved with an improved pay offer and obfuscation on productivity improvements.

2) Great British Railways will be quietly killed off though a new strategic body will be set up with its HQ in the Midlands.

3) There will be a reshuffle and Mark Harper will not survive the year as Transport Secretary as Rishi will not be able to survive the appalling May local election results. Boris, though, will not return.

4) The Labour party will, after much hesitation, produce a document on a vision for the railways based on renationalisation.

5) Attempts to close ticket offices will fail because of the complexity of the system which much be addressed first.

6) Passenger numbers will recover to pre Covid levels when the strikes are ended even though commuting will be far lower because leisure travel will continue growing.

I can’t bear to make any football prediction as QPR are too terrible.


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