Select Committee on Transport, Local Government and the Regions Minutes of Evidence

Examination of Witnesses (Questions 281-299)




  281. Gentlemen, I am very grateful to you. I am sorry to have kept you waiting, I am afraid we are running a little bit behind time. This is the sort of modern railway attribute that you will recognise; instead of sticking to the timetable, I am afraid we are late. Can I ask you, firstly, to identify yourselves for the record?

  (Mr Rosser) I am Richard Rosser. I am General Secretary of the Transport Salaried Staffs Association.

  (Mr Rix) Michael Rix. I am General Secretary of ASLEF.
  (Mr Hince) Vernon Hince. Acting General Secretary of the RMT.

  282. Perhaps I could just make absolutely certain it is quite clear to everyone that I am a member of Mr Hince's union and have been for a very long time. Gentlemen, do you have anything you would like to say, individually or collectively, before you start; if not, can we go straight to questions?
  (Mr Hince) Yes.

  283. Thank you very much. Can I ask you, by placing Railtrack in administration and developing proposals for its successor, has the Government grasped the nettle and restored sufficient public control over the railways?
  (Mr Hince) We feel that there is a good opportunity on this occasion now to take back over the national network, and I must emphasise the national network; we do not see the point of breaking it up and allowing regional Train Operating Companies to have any involvement. We need a national service and a national network and a publicly-owned public board, with a guarantee but with no conflict of interest, and if we are not careful we could have a conflict of interest if the engineering companies or the Train Operating Companies had control on that board.
  (Mr Rix) If I may just supplement that. I believe that the Government have grasped the nettle, so to speak; there might be some observers that might think they should have done it some time ago, and perhaps I might privately share that view. However, I think the recent announcement has been taken in the context where, yes, there has been enormous and perhaps erroneous press speculation over the way it was handled, but I do not believe that that has been shared by the majority of the public, neither, indeed, the majority of the people that work in the industry. I think the public and the people that work in the industry do believe that it is a step forward in the right direction, but, like my colleague Vernon has just said, I believe, that looking at the aspects of Railtrack, I think it would be a mistake if we just looked at the aspects of Railtrack, I think we need to look at all aspects of restructuring of the industry as well, this should only be seen in the context of a small part in the restructuring of the industry.
  (Mr Rosser) I do not know, is the answer to the question, whether the Government will now have sufficient public control over the railways from what they have done. I support what they have done because the status quo was not an option, clearly action had to be taken. The test will come on whether the new structure that is being proposed to be introduced, and it remains to be seen what it is actually going to be, delivers a safe railway, and whether it delivers a railway where the various activities that are so crucial in actually running a service at the end of the day, whether it be the maintenance or the operation or the rolling-stock, that those activities are reintegrated together so that they are all working towards the common objective of providing a public service. And it will also depend on whether the new structure, in fact, or it becomes clear that it is the provision of the public railway services that is the priority and not any other considerations.

Mr Donohoe

  284. Given that both ASLEF and RMT, in their evidence to us, have made very clear that there are reservations on the amount of private money under the ten-year plan by the Government, where do you see that money coming from?
  (Mr Hince) That, at the present time, is a problem, because, originally, of course, the ten-year plan was a very good way forward, and, probably for the first time for a long, long time, the railways could see a future. But, however, since then, of course, we have had Hatfield and other industry hiccups, if we can put it like that, that really has not given licence for that private money now to come forward, and, certainly, under the proposals that were there prior to Mr Byers taking back Railtrack, there was no opportunity whatsoever. If we are to do that, I am sure that first of all what we must bring is confidence to the industry, confidence to the Train Operating Companies, confidence to the passengers and the general public.

  285. Of the £30 billion that has been set aside over the next ten years by the Government, how realistic a figure do you believe that to be, as far as the needs of the industry itself are concerned?
  (Mr Rix) I do agree, in the way that the question has been put, that there are, indeed, in my opinion, severe reservations that the £30 billion set aside will be enough to develop or deliver what the Government's objectives are for the railway industry over the next ten years. I think the other question, of the private sector investment alongside that, also had some reservations, was that deliverable and would it be enough as well. And I think those plans and that money of investment was developed round a period of time when Railtrack were putting evidence forward because they had the monopoly of winning the contracts, and then after Hatfield and certain events that took place in the boardroom at that time there was an element of realism and some honesty that came out of that boardroom, and indeed those projects that were to be developed had doubled overnight in cost or had trebled overnight in cost. So I think, actually, that the monies that are projected are welcome, but I am not so sure it will still be enough to deliver, at the end of the day, and I think the Government might need to go back to revisit some of those figures.

  286. What figure would you believe would be necessary over the next ten years?
  (Mr Rix) I think, to develop some of the projects that have been talked about, I will be quite honest, some projections were that it was double the cost. I am not a financial accountant, in that sense, and I do not have expertise in the field of project delivery; however, I think the way the figures were actually presented at the time and the evidence that was matched to them, I now believe that there is indeed a need to revisit those figures, because there are more questions than there are answers.

  287. A final question. If the monies are not going to be there, and the level of spending then is going to be affected, you must be concerned about that, surely, as a trade union?
  (Mr Rix) Very much so. The Government have a wonderful policy and projection of growth for the railway industry; it is the first time in 30 years that there has been such a plan to actually deliver that. Most of us that are sat here giving evidence to you now have had experience in the railway industry of contraction; here was to be delivereth a growth. And, obviously, if there are to be shortfalls, I think that should be addressed now so that investment plans could be properly made and projects properly planned, rather than finding out, as we near the end of the plan, that there is going to be a substantial shortfall.

Mrs Ellman

  288. There is an opportunity now to rethink the structure of the rail industry; do you think that operators should have part ownership or responsibility for the network?
  (Mr Rosser) I have some reservations about that, and it would depend how the part ownership was done. The reservations that I have are, it would almost certainly, if we were talking about, for example, operators, say, the West Coast Main Line and the East Coast Main Line, owning the track and the infrastructure, one can see difficulties arising with other companies also using the same track, and it certainly would, if we were going to say that, the train operators, for example, the signallers were employees of those train operators as well, what happens if you are employed by East Coast Main Line and you have got to make decisions affecting not only your own company's trains but also another company's trains that may be using the same track, if that arose. I am not sure the freight company would be very excited about seeing the passenger Train Operating Companies owning the infrastructure as well. But if, as a result of the kind of thing the Government appear to be proposing, we end up with a body that does have responsibility for the track and the infrastructure and on which all the different parties are represented, and are therefore able to influence policy and how that company is going to behave and what its priorities are going to be, how it is going to function, then maybe that is the kind of vehicle that could be used. But I could see difficulties if it were simply going to be a case of saying, "If you're the principal train operator on this stretch of line, you have responsibility for the infrastructure."
  (Mr Rix) May I just supplement that point. As I see it, the Government are trying to rekindle the debate about reintroducing the wheel-rail relationship and to get back to some form of vertical integration; we fully support that, as a trade union. However, and this is what the problem with this whole exercise really is about, for the Government to move forward to try to restructure the industry without legislation, to actually look at the ownership issue, will mean that there will be some nuances that I do not think anybody can fully explain. And I think that Richard has just made a very good point. If there was a Train Operating Company that solely used those tracks, one could see the value of introducing that wheel-rail relationship and vertical integration, through joint ventures, of a joint operation; however, because of the multiplicity of Train Operating Companies and Freight Operating Companies, that operate over the entire network, I think it will be very difficult to move away from the vested interest scenario and what would work to be best. So I think really the whole issue is, there are a couple of issues, restructuring should be looked at in what is wrong with the franchising new map that was produced by the SRA last year, which drew up an entirely new map of franchising plans for the industry, where really, to be quite honest, they missed a golden opportunity to actually merge Train Operating Companies together. So still at this moment the plan is, basically, to have too many Train Operating Companies competing over the past; that is why I think it would be very difficult for the Government to introduce, under a form of restructuring, the wheel-rail relationship of vertical integration while there are too many competing TOCs over the same amount of lines.
  (Mr Hince) Could I just say also, Madam Chairman, a major station in your own constituency, Crewe, you have Virgin West Coast, Virgin Cross-Country, shortly to be Wales and Borders, North-West Trains, the freight companies, Central Trains, Pennine, and one or two other companies, all running through there. Who would be the dominant operator; it would lead to more fragmentation, not less.

  Chairman: Don't worry about it, Mr Hince, whatever happens in Crewe, Dunwoody is always in charge.

Mrs Ellman

  289. Is there an inherent conflict between the different ownership of track and train?
  (Mr Rix) Oh, yes. I think, over the last few years, everybody has concentrated on the deteriorating relationship between Railtrack and the Train Operating Companies and the Freight Operating Companies. The truth of the matter is, they are all in competition with one another, and, to be quite honest, they do not really like one another because it is a viewpoint of stealing customers, ticketing arrangements, and things like that. So I think it would be very, very difficult; because my experience of dealing with the Train Operating Companies as an entire group is, well, they will not even sit down and meet the trade unions in proper dialogue on a number of issues that could be resolved in the industry, so I do not see how they could actually manage the entire industry if it were left to them to have certain parcels of the project, so to speak, because they cannot get agreement amongst themselves.
  (Mr Rosser) The thing we lack in the railway industry at the moment is, there is nobody in overall charge, there is no leadership, there is leadership of individual companies, there is nobody who provides the leadership for the industry as a whole. You saw it in the immediate aftermath of Hatfield, where, in my opinion, Railtrack made a decision, namely, putting on all these speed restrictions, which may have been in the interests of Railtrack but I do not think they were in the interests of the railway industry and certainly not the passengers as a whole. But there was nobody there who was in a position to provide that leadership and say, "Look, the decision we need to make is the decision that's in the interests of the railway industry and its users as a whole." It was one company. And you will always get this conflict if you have got lots of separate companies, with different responsibilities, and all responsible to their own shareholders and looking after number one. And that is the trouble in the industry at the moment, it is contract based, not command based, nobody in overall charge.

  290. Does the Strategic Rail Authority have sufficient powers to show that leadership?
  (Mr Hince) It probably could have, but it certainly has not led the industry in recent times, and, I think, when it was set up by the Deputy Prime Minister, of course, that and the Rail Regulator had strategic jobs, and could have had. However, when you finish up with the amount of fragmentation and the blame culture that you have got in the industry at the moment, there certainly has not been the leadership from either of those two quarters, and one would question, in the future, with the opportunity that we have now got, whether there is a need for both of them, or either of them, in relation to what could be set up under this new body.

  291. What is the problem of the individuals in charge, or how you would like to see it changed now?
  (Mr Hince) Sorry, I would not wish to get into personalities, in that way. I do not think that it has shown leadership, it has looked at individual—


  292. Is it the structure, Mr Hince?
  (Mr Hince) It is not a structure that would help the railways at the present time, in the way that it is fashioned.

Mrs Ellman

  293. How should it be changed then?
  (Mr Rix) Very briefly, the SRA, in its current form, has only been in existence for a very short time. When it was originally formed, it was called the SSRA; there are many industry experts, including ourselves, that believe they dropped the wrong S from their title. And I do believe, if you witnessed the events of Hatfield last year,—


  294. It was the Shadow Strategic Rail Authority?
  (Mr Rix) I am sorry, I do apologise. That people witnessed people running for cover, rather than taking leadership. I believe that the SRA, in itself, lacks a strategic vision, which is completely at odds with what it is supposed to deliver, and I think there is a very good reason for that. Really, the SRA, the major part of its staff, were people that were brought in from other departments that put privatisation in the first place, and I believe they have an inherent interest in believing that there was nothing wrong with the original privatisation. And I think that is why it is very difficult actually to receive agreement or a strategic vision, because there are people there that believe there is nothing wrong with what they developed in the first place. They are completely at odds with the majority of public opinion.

Mrs Ellman

  295. So what would you like to see changed; would you like to see a change in the remit or powers of the Strategic Rail Authority, or do you feel that Ministers should take more responsibility?
  (Mr Hince) The question must be, if we have now got this opportunity, as we have at the moment, the SRA and the Rail Regulator were brought in to control a privatised, fragmented industry, and if we get the opportunity to bring in the engineering infrastructure, maintenance and renewals within Railtrack and control the TOCs in a different manner, and the freight operators in a different manner, from what it is, there must be a question as to whether that body is needed or whether it cannot be built into the powers of the new board that is set up.
  (Mr Rosser) Can I just say, I do not think the Strategic Rail Authority can provide the role of providing the leadership; by definition, it is called Strategic, it is not involved, you need actually leadership on key day-to-day issues, I do not mean whether the 6.22 runs on time. But what happened after Hatfield was not about strategy, it was about leadership in a key day-to-day matter; and it was one particular undertaking, in my view, taking a decision which was in its own interests. We are only going to put it right if we move back to some sort of command structure, instead of a contract-based structure, Railtrack ought to take over responsibility for its own maintenance and renewal work, that will reduce the number of interfaces that there are there, and you need a command structure, which we are still going to have, separate Train Operating Companies and another version of Railtrack; we do actually need somebody there who can bang heads together and make sure people co-operate.

Mr O'Brien

  296. How will the skills shortages in the rail industry service be tackled; how should it be addressed?
  (Mr Hince) That can only be tackled if we have got a national body, and at the present time we find that the industry itself competes with each other, whether it is for train drivers, whether it is for station staff, whether it is for engineering staff, whether it is for electrical control staff, or whoever, at the present time, except for the signalling grades within Railtrack, and they are the only employer, except for the Isle of Wight. There is competition, and there is no encouragement to set up proper training boards in that way, they poach each other's by various means, and as far as that is concerned, and we do need a national industry so that we can have national concern. If I can give you an example, very briefly. We find that Railtrack, with some of their expertise, have to outsource those to the engineering companies to get the experience and the necessary registration and licensing to come back and work inside Railtrack; that is a ridiculous situation for a whole industry that is there for the public good.
  (Mr Rix) There are many issues on this. In the last couple of weeks, because of the Strategic Rail Authority's plan, the Wales and Borders franchise has been created, and what has taken place is, they have done two TUPE mergers with four Train Operating Companies' existing staff, and nobody has been trained, nobody has been dedicated to that arena, there is no identity, and hence people have just been transferred in. Now there are four different sets of working conditions, there are four different sets of rates of pay, people have come from other arenas; and this is a train service that is running today, or apparently trying to run today. And so the skills shortage which is created around uncertainty and the competitive market that they have created internally in the industry is creating major shortages in very many areas because people will move to the other competing companies within the industry. And, because there is no defined national training programme in the industry, we are suffering with a lack of mechanical engineers, so the projects for the future cannot be developed, we are suffering with a lack of civil engineers, we are lacking a robust resource plan for the industry to move forward on a future basis, because there is nobody coming through behind.

  297. What approaches have the unions made to the universities and colleges in this country to have schemes and the opportunity for people to learn the skills that are required in the industry? After all said and done, you have a responsibility also, on behalf of your members. What approaches have you made?
  (Mr Rix) We have made approaches inside the industry authorities, to the Strategic Rail Authority, to Government Departments, where these issues have been raised. The Rail Industry Training Council is looking at some of these issues, and we have seats on the Rail Industry Training Council. But there has been a realisation in the last 12 months that certain things are wrong. So really we are at the development stages of plans, and, to be quite honest, there is not entirely complete agreement between certain people on national training programmes.

  298. Have there been any approaches to any academic organisations from the unions?
  (Mr Hince) That is normally done through the Railway Industry Training Council.

  299. It is normally done, Mr Hince, I can accept that, it is normally done, but here we have got a chronic situation of skills shortages in the industry, and one of the ways that we can overcome that is to get the colleges and universities to set up courses, to train people, because I understand it takes about 18 months to train a skilled worker. Now, surely, if there is a skills shortage, why should we not ask in the academics, to say, "Can you help us?"?
  (Mr Rosser) We can.

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