Select Committee on Environment, Transport and Regional Affairs Minutes of Evidence

Examination of Witnesses (Questions 326 - 339)




  326. Good afternoon to you, may I begin by making a personal declaration. I am an individual member of Mr Knapp's Union, I would like that recorded. I have been proud to be for many years. May I say what a pleasure it is to see you here this afternoon, Mr Knapp. Can I ask you to introduce yourself and your colleague?

  (Mr Knapp) I am the General Secretary of the Rail, Maritime and Transport Union. Steve Yandell works in our Policy Unit at the Union headquarters.

  327. Thank you very much. Did you want to make a few opening remarks?
  (Mr Knapp) Except to say that I have spent a lot of time at home in recent weeks and I have been looking on in horror at the Hatfield tragedy and the aftermath, and the damage that has been done to the industry, the loss of freight traffic and passenger traffic. I just wanted to mention that because these happenings have, unfortunately, come along since we submitted our evidence. Apart from that, I think the time would be best spent talking to the members of the Committee.

  328. Thank you. Could I ask you, first, do you see any conflict between a safe railway and one that is punctual and reliable?
  (Mr Knapp) There is a clear conflict within the present structure of the industry. The first thing you have to bear in mind is that we have a large number of companies operating in a fragmented situation. They are all driven by a need to look after the bottom line in the balance sheet and to give the shareholders a return. I notice that Railtrack raised a dividend this week to shareholders. I think it has to be understood that the answer to the question has to be counted against the framework and the structure of the industry at the moment, because repairs to the track means disruption to services. There can be a temptation not to do that, to get around it in other ways, like repairs to trains. Some of that came out in the Southall Inquiry. Within the current structure there is, without a doubt, a conflict.

  329. Need there be?
  (Mr Knapp) No, because we need to change the structure. I did not come this afternoon to talk about how you could tinker around the edges with the present structure. The time has arrived for a radical approach towards changing. I think as a very minimum you need to have an integrated core involving Railtrack and the infrastructure work force to start to get rid of these pressures and potential conflicts. I believe that the state should have a stake in that integrated core in respect of the capital investment that has been promised from the Government. The answer to your question is there need not be but I do not see it getting any better under the present structure.

Mr Donaldson

  330. Mr Knapp, you are very welcome. I want to talk a little bit about the West Coast Main Line. Do you think that the Government should provide direct capital support for the West Coast Main Line modernisation project?
  (Mr Knapp) I think the answer to that is that if it is going to get done there is no choice. The Government have already had to bail out the Channel Tunnel Rail Link. If this job is going to be finished—and it needs to be done, it is years and years overdue—I do not think there is any alternative but to make a contribution from the Government. The thing that concerns me about that is that there is nothing in it for the taxpayer. It is not even like London Underground where it will get handed back after 30 years. If you put £4 billion of Government money into Railtrack it is all gone. If you take the last big modernisation under British Rail, which was the East Coast Main Line, all of these modernisations bring about increased revenue, that is a proven fact down the years. There is a feedback there to the industry, but there is nothing coming back to the Government or the taxpayer in that kind of way. I do not think there is any choice here, otherwise the whole thing is going to collapse, that is the important thing about the whole structure that we are operating in. Railtrack can just not deliver the amount of capital investment that is needed for a project of that size.

  331. What do you think the Government should do to obtain a better deal for the taxpayer from the upgrading of the West Coast Main Line?
  (Mr Knapp) I have always argued—I hope I have been a prophet before my time—I do not see why the Government should not take a stake in Railtrack in return for the capital investment that is being deployed here. I do not know a lot about the City and private business but I do not think anybody would put money into a business if they did not get something back, whether it is a seat on the board or shares. We cannot just go on and on putting public money in on this scale. I believe as a first step that could be done. The Government, ie the taxpayer, could have an equity stake in Railtrack thereby exercising some direct influence over what is going on. I think that would be a step towards the integrated core I was talking about earlier.

  332. You talked about the danger of the whole thing collapsing, do you have a concern about safety on the West Coast Main Line?
  (Mr Knapp) There is general concern about safety, you know, which tragically have come out at Ladbroke Grove and Hatfield in the past 12 months. There is lot of pressure, as I said earlier, to avoid penalties, to avoid delays. There are companies arguing with each other about who is to blame for the delays. There are general problems about the pressure on safety standards. The West Coast Main Line is no more unsafe than anywhere else but it needs to be modernised, because the longer it goes on more of these kind of dangers will threaten. The only way you can avoid disaster is to reduce speed, which is what was not done in respect of Hatfield.

  333. You seem to imply in what you are saying that the pressure of deadlines and penalties, and so on is leading to inadequacies in terms of safety. Am I interpreting what you are saying accurately—I do not mean specifically to the West Coast Main Line—generally what you are saying is because there are deadlines and penalties, and so on, mistakes are being made?
  (Mr Knapp) There is a temptation to avoid those penalties and to cut down the liability towards those penalties. There are a whole number of other things as well. The work force face pressures now that they did not have to face before. They all work for different companies and they are under pressure to keep their own company on the right side of the line, if that is the right way to put it. Is Railtrack to blame for the delay? Is it the train operating company to blame for the delay? They have to speak to their own company controller before they talk to the Railtrack controller, who are actually the ones that have to control the network. These are things that happen now that never, ever happened before, those kind of pressures and that kind of eventuality.

  334. Are you saying that the result of that is human error as a result of pressures or are you saying that it is something more than that, that there are shortcuts being taken with regard to safety which could result in something serious?
  (Mr Knapp) It could result in human error, yes, if you are under pressure. But, of course the inquiry into the Southall accident revealed quite clearly the link between the desire to cut corners, if you like. As to the fact that the automatic warning system was not working in the Great Western train, if you read some of the background to that, there was a great debate going on between the companies about the cost of it and the cost of bringing it up to scratch. It had been there as a fire extreme for about five years, but allowed to dilapidate, and there are similar features coming out of the inquiry report in relation to train maintenance, where things were not being done up to the standard that you would have expected. So there have actually been manifestations of that in some of the tragedies we have had in the last couple or three years.

  335. Finally, therefore, you would like to see changes to the regime that, I suppose, address these issues of penalties and deadlines and so on, and give safety a greater priority when it comes to that kind of situation?
  (Mr Knapp) Well, safety should always be a number one priority. Nothing but nothing should ever come ahead of that. I doubt if you will achieve it by tinkering, for the want of a better word, with the present regime. I think the time has come for a more courageous approach to be taken to that problem, and that means fundamental change in the structure of the industry as it is now, to get rid of the fragmentation, to get rid of the pressures. The time is opportune, and I will be very interested to hear what Lord Cullen has to say on that very question when his inquiry report is published next year. But there has to be change.

Mr Stevenson

  336. Railtrack's Chief Executive, Gerald Corbett, consistently told this Committee that the suggestion that profits are put before safety is erroneous. Do you believe him?
  (Mr Knapp) No, I do not. I think he changes his mind in the aftermath of disaster. In fact, I think if you search through his public comments you will find he said something like that.

  337. In your evidence to us—we have had the main and the supplementary one—you say, "It is the view of RMT that public ownership of the network (inaudible) high levels of investment", and so on, and you have elaborated on that today, except you say the state should take a stake. Now my question is: What do you mean by "public ownership", and does that mean "taking a stake"? Do you see the distinction?
  (Mr Knapp) I think it is in a way, but it is a step removed from taking the whole industry into public ownership. What I am talking about initially is a stake in Railtrack, because there is a lot of capital expenditure going in there from the Government, and to create that integrated core of the infrastructure owner and the infrastructure work force. So my union's position has always been public ownership, since 1921 or something, but I am stepping back from that and we are trying to be realistic about the current situation that we are in.

  338. Are you aware—a leading question, perhaps—that the Government is intending to put £4 billion in direct grants into Railtrack over the next five years in the West Coast mainline, and was proposing that £14.7 billion of public money is put into the railways and the track over the next 10 years? Are you also aware that the total gross figure for the sale of the whole rail network when it was privatised was £4.638 billion? So it will appear that the Government is planning to put something like three times more in grants into the railway system out of the public purse than the whole railway system was sold for. Are you also aware that by July 2000 the total value of Railtrack on the stock market was £5.2 billion? So the Government are also proposing to put two and a half times more in grants over 10 years than Railtrack is valued at today. What is your reaction to that and how should the public interest be protected in those circumstances?
  (Mr Knapp) I find it inconceivable that in a situation like that there is not going to be any public stake. All that money is just going to be delivered. Where does it go? How does it get managed? How does it get spent? There is no direct public influence, there is no return for the tax payer on that level of investment. Of course the £4 billion you are talking about, as I understand it, comes out of the £14.7 billion which was the public end of the investment schedule for the next 10 years with something like £34.3 billion coming from the private sector. We have to move now, as I say. If we do not move now and make radical change, we are going to get more of the same.

  339. My last question, if I might, is about maintenance. Our recent evidence from Mr Corbett concentrated to some degree on the relationship between Railtrack and it maintenance contractors, and there are some Members of the Committee that were concerned about that, if not all. A report in the Financial Times of 11 November suggests that "Railtrack is considering taking maintenance of the railway network, which employs 19,000 workers, back in house." Do you believe that Railtrack are serious about that?
  (Mr Knapp) As I said a couple of minutes ago, I think Gerald Corbett has had a couple of flashes of light on the road to Damascus. I think his change of attitude—and profit is scheduled as one of his themes, and this is the second one—is where he is beginning to realise that a lot of these relationships are confrontational. You can talk to managing directors of these infrastructure companies, it is a totally confrontational situation, batting away at each other about what the cost of any given contract is going to be. In fact, these companies are subjected to what I think is a bizarre situation of having to re-tender for the work every five years. One managing director told me the other week in recent times 75 per cent of senior management time is spent on trying to secure the contract, as opposed to devoting time to what is going on out on the track. That keeps bringing me back to my central point that we have to change all that. Maybe by the comment attributed to yourself hopefully it is a sign that you are beginning to think that way as well.

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