So there is a plan. A cunning plan, indeed, but a complicated one. Remarkably, in the King’s Speech there were five bills related to transport, two of which solely concern railways. Why two bills? Because Labour and the Transport Secretary, Lou ‘move fasts and fix things’ Haigh, is in a hurry.
The reason for the haste is that rail ‘renationalisation’ has become totemic for Labour. The new government wants to show that it can change things quickly and improve the delivery of services, and rather riskily Keir Starmer and his top team see railways as a key area where a real difference can be made quickly. This explains the prominence given by Labour’s spin doctors to the railway bills in the King’s Speech demonstrates that taking over the franchises and consequently improving the performance of the railways.
Rome, or rather Great British Railways, cannot be built in a day. The legislative underpinning of the new organisation will be complex and the process lengthy. There will even probably have to be some of the dreaded consultation which acts as a brake on every new policy introduced by governments. The Bill to create GBR has not even been written yet and will clearly not see the light of day until very late on in this first session of Parliament, which will end in the autumn of 2025.
However, key change as advertised in the manifesto is to bring the train operations back in house by no longer franchising out services. Labour recognised that while this would also require legislation since the Conservative’s Railways Act specified that public organisations could not bid for franchises or operate them except in cases of emergency – which is why four are currently being run by the Operator of Last Resort. As I set out previously a couple of issues ago, the problem for Haigh and her team is that they do not, under current legislation, simply take over a franchise because it is up for review. There has to be a reason such as financial issues or poor performance. Hence the split into two bills. For Labour could not, therefore, wait for the complicated legislation required to create Great British Railways in order to ‘move fast’.
Hence, the first Bill, called the Passenger Railway Services (Public Ownership) Bill is relatively simple and will allow private operations to be taken over, probably by the Operator of Last Resort or perhaps a shadow version of Great British Railways (older readers will remember the Shadow Strategic Rail Authority). I understand that ministers are hoping to get the Bill on the statute book by the autumn. And by golly, they are in a hurry. The Government has set out a high speed schedule for the Commons stages of the bill. The second reading took place on July 29th, just before recess, and the Third Reading, the last stage of the Commons process, is apparently scheduled for the first week in September when MPs return.
Even at this breakneck speed, it is difficult to see how the Bill will become law in time to deal with the first franchises coming up for consideration, Greater Anglia and West Midlands, both of which have scheduled reviews in September. That’s because the Bill has to go through the Lords and there Peter Hendy, the rail minister, will have his work cut out, trying to prevent amendments delaying the process given that there is a Tory majority, As a new Parliamentarian, he may well find it difficult to deal with the wily old politicians on the opposite bench intent on slowing what they see as the calumny of reversing privatisation.
If those franchises coming up for review in September have to be waved through because the legislation is not ready, that will be a major disappointment for the party’s totemic new policy especially as, later that month, the Labour hordes will gather in Liverpool for the annual conference.
That is just the most urgent of the tasks facing the new transport ministerial team. Leaving aside non-rail issues, such as slicing back the roads programme to create a bit of leeway in the capital budget and help to fund HS2, and trying to reinvigorate bus services, there’s no shortage of matters on the railways to sort out.
Top of the agenda has to be sorting out the industrial relations. Talks are indeed taking place which given that the Tories refused even to meet the unions represents progress. But Aslef, whose members have not had a pay rise for three years, are not going to roll over and accept a poor deal. Financially, though, the railways have not recovered from the Covid pandemic. Whereas before Covid railway services were generating around £2bn more than they were costing to run, now they are costing £2bn. While numbers of passengers are inching back up to pre-Covid levels, recnet figures are distorted by the huge popularity of the Elizabeth Line and by the increase in leisure passengers whose fares do not make up for the loss of that mainstay of railway finances, the season ticket holders who are probably lost for ever given the preponderance of working from home. Any deal with the unions will have to reflect that reality.
While clearly a deal with the unions will improve performance and reliability, winning some of the goodwill that has been lost by the obduracy of the previous regime, there has to be a focus on the other issues which have led to the deterioration of railway services. Under the previous administration, the meetings between Department for Transport officials and train operating companies who were performing badly had been scrapped. These have now been restored with both Avanti and TransPennine being called in to account for themselves. Interestingly, my sources suggest that TransPennine were given the harder time, despite the fact – or maybe because of it – that the operations are currently being run by the government’s own Operator of Last Resort. I understand that both meetings were ‘positive’ with joint presentations from Network Rail and operators, and that it was clear that most of the delays were not caused by external factors such as bad weather or major track issues, but rather poor management, staff shortages and timetable conflicts. In other words, these problems are resolvable.
There is progress on other fronts, too. There is a widespread recognition that a long term rolling stock strategy is essential, not least because the Tories have left the industry with five assembly factories for rolling stock with no consideration of their long term viability. It is recognised that not all can survive which means there are some very hard decisions to be made.
On a more positive note, the Department for Transport has been told it must create a proper accounting system for the railways, taking into account both costs and revenue. This was indeed promised by the egregious Mark Harper at the Bradshaw lecture early last year but never implemented. Instead the system by which costs were borne by the Department for Transport while revenue went to the Treasury, meaning no sensible decisions on, say, revenue-raising marketing could be made, was maintained. Now a new system whereby revenue and costs are considered together is to be implemented from April 1st next year.
The fundamental aim behind Labour’s strategy is bringing operations and infrastructure to work together and there was perhaps a good sign when I took the last train of the day back from Derby to London recently. The service started late from Sheffield because it was held to wait for a connection. Now it may be that this was common practice for that service, but it does represent the way that railways should be run. Anyway, I took it to be a sign that just possibly that railways are on the right track (sorry!).
The resilience of railways
The vulnerability of the railways has been highlighted in the past couple of weeks by two very separate events. The massive software outage caused by the mistake by the aptly named CrowdStrike had a limited effect on railways but showed, as I have mentioned several times before, that there is a vulnerability to both software and hardware failure that has not received sufficient attention.
Then came the coordinated vandalism on the TGV network on the eve of the Olympics opening. While, again, the whole network was not brought to a halt, there were huge delays for hundreds of thousands of people, and the well-targeted attack demonstrated how easy it is to disrupt operations. As I pointed in the article I wrote for the Daily Telegraph, in many respects railways are remarkably resilient, too. They were quickly back functioning almost normally but that does not negate the key point. Resilience is something that the industry should be looking at more closely and, indeed, the creation of Great British Railways should be the starting point for further work in this respect. I know there is some behind the scenes activity but I have been informed that it is nothing like enough. The issue of cyber vulnerability is a subject that I will be investigating further and therefore if you have thoughts or inside knowledge do get in touch via my normal email, christian.wolmar@gmail.com, anonymity guaranteed.