The government is racing ahead with high-speed rail without first preparing the ground to ensure that it will be a success. Labour must not make the same mistake in adopting its high-speed rail policy.
There is little argument that the privatisation of the railways was a botched job and, sadly, Labour did little to rectify this while in power. The result has been a mixture of privatisation and nationalisation that leads to inefficiency and unaccountability throughout. For example, our infrastructure remains entirely owned and operated by Network Rail, a monopoly that is unaccountable, whether to shareholders, the taxpayer or the ticket purchaser.
In charge of all this is the Department for Transport, which suffers from all the same accountability problems that the civil service suffers generally. In fact, the DfT actually ‘runs’ UK rail; in no other private industry does government legislate how business operates as it does with rail. Why is it necessary for the DfT to stipulate in a rail franchise what type of vending machines should be operated in a railway station? The Competition Commission has even ruled that the DfT has managed the leasing market such that fare prices are higher. Yet when it comes to large-scale projects the DfT takes no responsibility for its actions, pushing it onto Network Rail and the train operating companies through their franchise agreements and arguing that the department should not be seen to interfere in private business. This contradiction in project management responsibility hinders UK rail projects time and time again.
High-speed rail will suffer all these problems, but its arrival could offer the chance to set them right. HS2 is set to open UK rail to traveller choice – the existence of a new network will give travellers the opportunity to choose between two different routes by rail to Birmingham. At the very least, a body other than Network Rail should be responsible for high-speed infrastructure. As with aviation, where a broken up and competitive version of Network Rail exists, the TOCs should have direct day-to-day responsibility for the maintenance of infrastructure, with government bodies ensuring uniformity of safety and delivery. If the TOCs maintain infrastructure then when a passenger blames signal failures on Southern or Virgin Trains, for example, they would at least be blaming the right entity.
Lessons must be learnt from the mistakes made in the past. Before splashing out £34 billion of taxpayers’ money on rail infrastructure, we need to seriously examine the DfT’s role in this project, rather than assuming it. There is merit in granting those who will eventually run and profit from HS2 increased responsibility and reward for its construction on time and on budget, with the DfT’s role reduced more than it currently would be. At the moment, the plan is simply to build the infrastructure and identify its operators at a later date. It simply takes some clever thinking on how to sell HS2 to the private sector now, not later.
There exists in HS2 a real opportunity for Labour to show that it is the better party of government by seizing on it to improve the entire industry and correct John Major’s bungled privatisation.
Bojo has come out against!
Supporters of rail privatisation seem to come up with ever more contorted schemes for making the market in rail transport work: but it can’t, can it? The choice of two lines between London and Birmingham (post-HS2) is exceptional; nowhere else is likely to be in this position. Most towns and cities will still have just the one line. In any case, once HS2 is built, isn’t the likelihood that it will take all the intercity services, leaving the existing line for slow or stopping trains? More problematically, your model has an inherent contradiction. If the rail infrastructure is going to be owned by the TOCs that use it, the result will be regional monopolies, not price competition. I can’t see any way in which that can be avoided (indeed, wasn’t that must have been the justification for setting up Railtrack in the first place?). The outcome you seem to want- vigorous price competition on the easyjet/ryanair model- will never be possible across most of the country because of the limits of infrastructure. Trying to make it happen is a fool’s errand, potentially wasting another twenty years in which our transport will remain unmodernised and embarrassingly outmoded. You correctly point out that the current system is really a form of management by the DfT, on the sly. Rather than attempt (hopelessly) to contrive a way out of this situation, surely the lesson must be to accept that the railways will always have to be managed, in some way, by the government, and that private sector involvement should be through management contracts rather than franchises (in the same way that Transport for london runs the buses). Transport in London- in contrast to the rest on the country- runs far better than it did ten years ago. It’s a rare success story, due in large part to centralised management, careful design of services, integration of different modes etc. Private companies are involved- they operate most of the services- but the constant conflicts between TOCs and government in the rail system are not reproduced. Most convincingly, it offers a model that has actually been shown to work in the 21st century- unlike yours, which is essentially a return to the pre-war rail service. Why should that work any better? Rather than proposing another new system, why don’t we learn from what we’ve already achieved?
Luke I think we agree more that we disagree on this. Firstly, I think we agree that the chief problem is the role of the DfT and how much control it has and I totally agree that government needs to have some control. For example, it’s not profitable to operate trains late at night and we need to ensure that they are operated at such times; railway has a public service element. However the current level of DfT involvement is unacceptable and I don’t accept that it’s hopeless to reduce that. If you were to suggest to the TOCs that they were to manage infrastructure, they are often initially sceptical because incorporating Network Rail’s procedures into their own would be a nightmare. However both sets of procedures are driven by the DfT’s requirements and so if we can look at the whole issue again fresh, it might be possible to streamline the whole thing so that one entity can operate rolling stock and maintain infrastructure at the same time. To clarify therefore, I am not arguing for a completely free market in railway. Your suggestion of management contracts would certainly be a place to start looking at how we can reform government control, noting of course that transport across London is a totally different concept to transport across the country. I totally accept that if the TOCs were to manage infrastructure that would result in regional monopolies, but that is much better than the current national monopoly. It doesn’t have to be the TOCs of course, but the advantage of using the TOCs is that it will create a direct link between the fare payer and the entity responsible for infrastructure maintenance. However, not having the TOCs do it would help stimulate a market more like that for owning and managing airports for example (noting its flaws as recently pointed out by the Competition Commission). The intention would not be to create an Easyjet/Ryanair type of competition – as you point out the nature of the infrastructure and the fact that we currently only have one set of infrastructure means that is impossible. The choice as to Network Rail’s successor would need to be considered carefully. Your assumption about HS2 dominating inter-city travel and existing infrastructure being used for commuter travel, whilst logical, is flawed. This might be the intention behind HS2 but all the research shows to one thing. If you create a new way from getting from A to B, people don’t move from the old way to the new way, they simply travel more. The existing railway will almost certainly continue to be used for inter-city travel, particularly if the TOCs operating the two ways of getting from A to B compete on price, speed, reliability and comfort. Depending on how much the government will want to recoup of its investment in HS2 (the pitiful rate of returns means it will have to be government funded or guaranteed), HS2 is certainly more likely to be the more expensive way to travel. Granted, all HS2 will initially do is create two sets of infrastructure between two destinations only, but it’s a start. It should be noted that HS2 will do nothing to relieve the voters’ more pressing issue; overcrowding on trains particularly on commuter travel. However as we can’t put more trains on the current infrastructure and we can’t operate bigger trains because of the limits of current infrastructure we have two options. Either develop current infrastructure resulting in massive disruption (and also more of a temporary than permanent solution) or develop a new set of infrastructure. Unless a third rail system is developed in addition to HS2, people will in the future start to ask the question of how the HS2 network can be utilised to relieve overcrowding on the current network. I don’t like where that train (no pun intented) of thought leads me…