Posted 18th July 2024 | 6 Comments
Government races ahead on rail reform
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Updated 14.00
One of the Bills mentioned in the King’s Speech is receiving its First Reading in the Commons today, but the Government seems likely to miss the first deadline for taking operators back into public ownership, just over eight weeks from now.
The Passenger Railway Services (Public Ownership) Bill provides for passenger operators to be transferred to the public sector by default instead of being re-offered as contracts to the private sector.
There are ten passenger operators still in the private sector, and the government intends to renationalise each one when the contract expires or reaches a ‘break point’. It has also warned that it could terminate agreements early if there is a breach of contract.
The passenger contracts let by the last government are due to expire on various dates between this year and 2027, and the first two come up on 15 September.
Both Greater Anglia, which is owned by UK Transport Group and Mitsui, and West Midlands Trains, owned by UK Transport Group Limited and JREM Train, reach their ‘core expiry dates’ then, when the contracts can be terminated.
But the change in the law needed to return the operators to public control by taking advantage of these ‘break points’ is unlikely to be achieved before next year.
Transport secretary Louise Haigh told PA today: ‘We need the first piece of legislation on the books and we are aiming for Royal Assent certainly by the end of the year, and then we can issue the first contracts three months after that. So early next year.’
The more complicated Railways Bill, which establishes Great British Railways, will need more Parliamentary time.
The next two contracts to expire will be Chiltern Railways and Govia Thameslink Railway, on 1 April next year.
(The database of contracts on Railnews Business has been updated since the King’s Speech to include all forthcoming expiry dates, as shown in the contract documents.)
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
david C smith, Bletchley
My understanding is that the 1953 Transport Act applied to road as well as rail, in that it did away with "British Road Services", an attempt at a nationalised road haulage outfit , which had turned out to be a bit of a " basket case".
Public ownership isn't in itself a good or a bad thing ; it seems that to be a good thing , it needs to be suited to particular circumstances such as the commuter networks round our big cities. For the sake of accountability too, it needs to be constituted with a high degree of direct democracy . The old British Railways was a " top down" / "one size fits all " sort of organisation.
[The 1953 Transport Act was concerned with several modes of transport, hence the name. It abolished the British Transport Commission's Executives (except the London Transport Executive), thus placing the BTC in direct charge of the railways while also giving the existing BR regions more autonomy. It reprivatised the road haulage industry but did not lift all the regulatory constraints on BR. The Act was the result of a Conservative government wielding the free market sword without much consideration for the consequences. Labour, on the other hand, was also in pursuit of an ideology when transport was nationalised in the first place. Today's situation is a little different: the franchise era was not uniformly successful and had to change. You can see the full 1953 Act at https://www.railnews-business.co.uk/docs library/1953 Transport Act.pdf--Ed.]
david C smith, Bletchley
Yes, it is true that a lot of fundamental readjusting has been needed since around 1920 regarding freight traffic progressively transferring to road . This in turn may well result in part from the existence of "hidden" benefits and costs involved in transport that ought to be present in the transport market but are not.
A useful role here for government would be to "inject" performance related subsidy ( and charges) into the above market so it responds to these influences. But leave the decision making with the operators, not by imposition from DfT .
{Freight moved to rail partly because the railways were much more tightly regulated than the road haulage industry. This imbalance became acute after the Conservative 1953 Transport Act, which pushed the railways into the red two years later.--Ed.]
Andrew Thomson, Leeds
The railway network's shift from a predominantly freight-based system to an overwhelmingly passenger-based one coincided with the nationalised era but didn't really have anything to do with it. Once road freight had established itself, rail freight became uncompetitive in all countries for distances up to 300 miles, which meant the end for most types of rail freight in the UK. And freight is the profitable part of the railway; passenger trains rarely earn money, but are necessary to connect people around the country. So government subsidy would always have been necessary if we wanted to retain anything more than a skeleton network.
James Hutton, Oxford
Chiltern Railways was very well run when Adrian Shooter was in charge. However, in recent years it seems to have been coasting, although still commendably reliable. The rolling stock now needs replacing and the sensible next step would be electrification of the whole route.
[Former rail minister Huw Merriman wrote to the industry at the end of January, setting out proposals for new rolling stock, including about 90 vehicles for Chiltern.
see https://www.railnews.co.uk/news/2024/03/04-monday-essay-the-case-of.html --Ed]
david C smith, Bletchley
I've no particular hostility towards Nationalisation , but am concerned at the way the years from 1948 to 1994 had witnessed a steady loss of many types of rail traffic , whilst overall "losses" steadily grew , parallel to having investment cash only available from government sources. Will we now witness a repeat performance ?
There are, of course some rail activities that need public ownership , particularly those that are captive market natural monopolies, hopefully with more localised and direct forms of democratic control. Those activities ( eg I ntercity / long distance passenger , Freight , the ROSCO'S ) amenable to competition ought to remain in the commercial domain.
The 1997 Labour government seemed to be moving in the direction of Public / Private organisation, but the reality was disappointing. It can't be that difficult to "get it right" , can it ?
Tony Pearce, Reading
I can understand why trying a new management structure at Avanti might bring benefits to the problems it is having, but I see no reason to change the management at Chiltern Railways which seems to have been exceptionally well run. But political dogma says that either Privatisation/Nationalisation is all good/bad. It seems to me a balanced approach is what is required.