Britain’s Railways

Statement

The following Statement was made in the House of Commons on Thursday 20 May.

“With permission, Mr Speaker, I would like to make a Statement about the future of rail.

The railway is one of the nation’s proudest and most enduring innovations. Almost 200 years ago the first line opened—the Stockton and Darlington in County Durham. Within decades, the railway’s iron web stretched across the nation, carrying trains that transformed our economy and society. From steam icons such as the “Flying Scotsman” and the “Mallard”, to the high-speed intercity 125, which became the stalwart of Britain’s railway for 45 years, this country was built by the railway.

In the 19th century, rail helped to make us so productive and turned us into the workshop of the world, and rail powered our great Victorian cities and shaped our economic geography. Rail opened up vast, long-distance travel for ordinary people, transforming opportunity for the masses. Just as rail moulded our past, so will it shape our future. No other form of transport can bind the nation so effectively and help us to level up our country, bringing new jobs and investment to regions such as the north and the Midlands, as we build back from Covid.

However, for rail to play that key future role and reach its true potential, the industry requires radical overhaul. The Government are deeply committed to rail. We are spending tens of billions on modernising rail infrastructure, electrifying existing routes, updating signalling stations, renewing train fleets, building new lines, and making up for decades of underinvestment, but there are problems that investment alone cannot solve, such as too many delays, too much confusion for passengers, and different parts of the industry not working together.

The part-privatisation of the railway in the mid-1990s successfully reversed its long-term decline. Private sector involvement has seen passenger numbers more than double, rising more quickly than in most of Europe. Passenger travel is safer, and our country is better connected, with billions invested in new, modern trains and upgrading our stations—investment that would not have happened under nationalisation. However, the industry is fragmented, it lacks accountability, and it is lacking in leadership. The chaotic timetable change of three years ago this week demonstrated that point, as did the Government being forced to step in to take over failing franchises. Those are just some examples of how the railway was not working, and of how it was neglecting its greatest, most precious asset: the passenger.

Today I am proud to announce the beginning of a new start for the railway in Britain. It is the biggest shake-up in three decades, bringing the railway together under a single national leadership, with one overwhelming aim: to deliver for passengers. The new public body, Great British Railways, will own the infrastructure, run and plan the network, organise the timetable and set most fares. It will be one organisation, accountable to Ministers, to get trains running on time, make the customer experience as hassle-free as possible, and bring the railway into the 21st century, a single, familiar brand, with united accountable leadership.

We are going to sort out and simplify ticketing. Instead of having queues at stations for wads of paper tickets, we will roll out convenient, modern ways to pay and book—smartphones and contactless—and a new Great British Railways website for selling tickets across the network. We will welcome independents continuing to compete in the ticket retail market, particularly where they can grow new markets, recognising the value of private sector innovation. Pay-as-you-go will be more widely accepted, and flexible season tickets will be introduced next month, saving money for an increasing number of people who do not commute five days a week. At the same time, “turn up and go” tickets, conventional season tickets and Britain’s comprehensive service will all be protected.

Although Great British Railways will manage the network, we must not ignore the contribution that the private sector continues to make. This is not renationalisation, which the Government continue to believe failed the railways. Rather, this is simplification. While Great British Railways acts as the guiding mind to co-ordinate the whole network, our plan will see greater involvement of the private sector. Private companies will be contracted to run the trains and services, with fares set by Great British Railways. It will work more like London buses and London Overground, delivered by private companies but branded as a single national service.

The operators will be rewarded for providing clean, comfortable, on-time services, and our reforms will unleash opportunities for them to innovate, helping us to change the way tickets are sold and the way data is used, so that passengers can plan their journeys more easily. These contracts will lower the barriers and bring in new entrants, including community rail partnerships and other innovative bidders operating on branch lines. That will make the competition process easier and will be good for taxpayers and passengers.

In England, we will work to bring the railway closer to those who use the services, and in Scotland and Wales, we will continue to exercise the current powers under devolution. Close collaboration with Great British Railways will help to ensure that delivery improves across the services and provides consistency for passengers across the country.

This is also about changing the culture of our railway. Covid has shown the very best of the railways. Ticketing staff, engineers, drivers, guards, cleaners, signallers, maintenance workers and timetablers have all played their part in keeping supplies, vaccines and essential workers moving, and for that we owe them a debt of gratitude. They have shown us what can be achieved when this industry comes together, and we want to strengthen that.

Simpler structures and clearer leadership will make decision-making much more transparent and will remove the blame culture. There is far too much bureaucracy focused on establishing who is to blame rather than finding solutions. For example, all delays greater than three minutes have to be allocated to someone for financial penalties to apply. Until recently, under the delay attribution rules, when a train was delayed by being hit by a bird, who got the blame depended on the size of the bird. A small bird was the fault of a train company and a large bird the fault of Network Rail. Of course, trains are expected to withstand, say, a sparrow, a pigeon or maybe even a smallish duck, but not a swan or a goose.

Once a train has collided with said bird, it creates an industry for debate, argument and litigation. Network Rail and train operators currently employ a stunning 400 full-time members of staff known as train delay attributors, whose sole job is to argue with each other about whose fault the delay is. There is even a national attribution board—a sort of supreme court for the railway—which looks at these disputes and, in one case recently, had to rule on whether a pheasant is a small or large bird. It is completely bonkers. This is the sort of thing that will end. As soon as possible, under our reforms, everyone, including the train operators, will be tasked to work towards common goals and manage costs. We will create a more financially sustainable railway, saving money for the taxpayer. Rail services will be better co-ordinated with each other and better integrated with trains, buses, bikes and trams.

This new plan for the railways, three years in the making, is not about ideology. I am more interested in fixing problems, getting things done and creating the public services that people want. This plan is therefore about delivering for passengers—an ambitious but common-sense blueprint for a more customer-focused, more reliable and growing railway. As we head towards the 200th anniversary of rail’s inception, the network faces perhaps its biggest challenge with the collapse of passenger numbers during Covid. This new rail revolution will restore trust and pride in Britain’s railways, secure it for the long term and ensure that it plays just as formative a role in our future as it has done in our past. I commend this Statement to the House.”

Television has given us “The Great British Bake Off”, “The Great British Sewing Bee”, “Great British Menu” and “Great British Railway Journeys” as programmes for our delectation and entertainment. Now the Williams and Shapps plan, determined not to be outdone, but hardly in a display of originality, is offering us Great British Railways. The Secretary of State is at pains to tell us that the proposed changes for our railways, extending the role of the public sector, are simplification not renationalisation. The changes may not mean full public ownership but they are certainly a further step closer to it, and would make the final switch easier, which is no doubt why the Secretary of State doth protest so much.

The plan does a demolition job on the failed, fragmented privatisation of our railways and the insuperable problems it has created, which the Secretary of State now admits can no longer be allowed to continue. The plan is basically a statement of hope and assertions about what the proposed new structure and Great British Railways will deliver. The shadow Secretary of State has already written to Grant Shapps with questions on 15 initial specific points and we await a detailed written response. I will, though, make a few points now.

The plan makes great play of 400 jobs that exist to determine the allocation of blame for delays. The need to do this will seemingly disappear under Great British Railways. Yet the Government talk about incentivising train operators to run services on time. Whether that also means penalties for running services late is not clear. Either way, there will presumably still be a need to determine where responsibility for a delay lies, since it would hardly be appropriate to attribute to a train operator, on a management contract with incentives to run services on time, responsibility for a passenger train delay caused by a track or signalling failure or another operator.

We need to know far more about how the proposed incentives regime will work and its potential rewards and for whom. Even Great British Railways is going to be incentivised. The plan refers to the perverse effect of incentives under franchising arrangements. We could be in danger of going down that same path again, despite the repeated assertions in the plan to the contrary. Train operators will continue to bear cost risk, but there will be incentives to run trains to time, to run clean trains, to run safe trains, to run high-quality services, to manage costs, to attract more passengers and to work with other railway organisations for the greater good. It will be some bureaucracy that will be needed to devise, manage and supervise that sort of regime if these are more than token gesture incentives—and all because the Government are not prepared to countenance Great British Railways operating the rail services itself.

My Lords, I strongly welcome this long-overdue plan for reform and thank Keith Williams for his work on this. My only regret is that it has taken this long to get here. The industry has been crying out for reform for many years; one in three trains was late in the last year before the pandemic and two-thirds of contracts since 2012 have been awarded to single bidders—hardly a sign of a vibrant, competitive industry.

However, unlike some, I do not believe that the answer lies in a return to British Rail, which ended in stagnation and closures and as the butt of rather predictable jokes. This Statement harks back to the glory days of the 19th century, but the last 60 years have all been a bit of a mess. For a long time, the Transport for London contract structure has been touted as the answer, with the appropriate balance of risk for private contractors yet a fully integrated service. However, Transport for London has said publicly that it took it two decades of experience to get to the ideal contract model.

This is welcome, but it does not mean it will be easy—I do not for a minute imagine that the Minister thinks it will. The sheer scale of the thing is a problem. Great British Railways will be a massive organisation, bringing together Network Rail, many other DfT functions and some of the Rail Delivery Group functions. Currently DfT has three director-generals to cover rail services alone. The new organisation will be enormous and complex, and freedom from direct government interference will be essential for success.

The first problem is that, despite the name, Great British Railways is not really British, because it does not cover most of Scotland, Wales, Northern Ireland or London. Those have devolved services. So, my question is an important one: how will GBR liaise and link in with those other services? It is essential that that link is smooth and coherent. And what about the devolution of services to local authorities, which has been encouraged lately? Local authorities can add a great deal to the standard of service. There must be a role for them in order to raise the threshold. I rather feel that the word “Great” will be at the mercy of headline writers the first time something goes wrong—but I think there is the potential to get a coherent picture of the whole, so long as devolution is taken fully into account.