The Rail Review

Robert Key says...

Whatever romantic memories some of us have on the age of steam and branch railways (and I remember both around Salisbury in the 1950's) the truth is that nationalisation had starved them of new investment in technology, track and rolling stock. The subsidy was growing along with the debt. Passenger numbers were falling. It was poor use of a great transport resource. So, we were right to privatise the railways. It has led to a massive increase in investment and a big rise in passengers. Sadly, with the wisdom of hindsight, we got it wrong on splitting trains from tracks. This Government has thrown billions of pounds at the problem and reorganised railway management three times. The subsidy has gone up and the service has gone down - especially in rural areas.

We are serious about getting our railways on the right track - so I welcome this announcement from our Shadow Transport Minister on the way forward.

The Problem

Over the next 25 years, Britain's transport infrastructure will face immense pressures. The number of cars, in particular, is predicted to grow so fast that we cannot possibly provide for them through building more roads.

That means we will need an efficient, modern public transport system to help meet the needs of future generations. Railways will be an essential part of that.

Today our trains are carrying more passengers than they did before Beeching cut the network in the 1960s. They face a decisive crunch in the next few years. By 2014, official forecasts show more than 30 per cent more passengers, but no increase in capacity. So overcrowding will get much worse and fares are set to rise by above inflation.

It is simply not realistic to keep expecting passengers to pay more and more to travel on trains that will be more and more overcrowded. And people will not leave their cars at home if that is the alternative. Something has to change.

Value for Money

There should be no shortage of money to tackle the problem. Public subsidy to rail has gone up from just over £1 billion a year in 2001 to a record of more than £5 billion today. Revenues from fares are also at record levels. But despite this, nothing significant is being done to tackle capacity problems. Passengers are not getting value for all that money.

An important part of the problem lies in the structure of the industry that exists today. We think, with hindsight, that the complete split of track and train into separate businesses at the time of privatisation was not right for our railways.

In our view, the separation has helped push up the cost of running the railways - and hence fares - and has slowed decisions about capacity improvements. Too many people and organisations are now involved in getting things done - so nothing happens.

The Review

So we are launching a complete Review of the operation of our railways, with a view to securing a much greater degree of integration between track and train. We do not expect to recreate a new version of British Rail, but we do want to work with the industry to identify a better structure to ensure it can meet the challenges of the next decade.

Although we are open to different approaches, and will want to listen to views from across the industry, there are a number of things we regard as givens in the Review.

We expect any new integrated organisations to work under franchise-type arrangements (or something similar) rather than to own the network.

We do, though, want to see more scope for long-term investment decisions, often impossible under today's short-term - normally seven-year - franchise arrangements.

Any new structure must protect the interests of freight users and encourage future growth in rail freight while also protecting smaller train operators.

We want to see rail workers share in the future financial success of the railways, particularly in order to discourage future militancy and strike action.

Our goal is to publish a Strategy Paper on the future of our railways as an alternative to the document that the Government itself will publish during 2007.