Examination of Witnesses (Questions 320-339)|
WEDNESDAY 24 OCTOBER 2001
320. Is it not really important that if we are
going to have change we get it right this time? Now, if we are
going to get it right this time, do you really think that Newtrack,
or whatever it is called, with just the same duties and responsibilities
as Railtrack, is going to be able to make it work?
(Mr Francis) I think that it does have an opportunity,
because the opportunity is to bring all parties in the rail industry
together, to work together.
321. But it is not going to bring them together,
is it, they are still going to be fragmented into all the operating
companies and whoever is responsible for the track?
(Mr Francis) I simply do not believe that is true.
I believe that there should be one infrastructure owner, it is
a national rail network. We could argue the case of how many Train
Operating Companies should actually run their trains on that;
but if you actually construct a vehicle that Train Operating Companies
plus others participate in then you may not have had, for example,
the paralysis that beset the network following Hatfield. Effectively,
there were three choices after the Hatfield tragedy: close down
the network, run trains at 20 miles an hour, or just keep running
trains as you had actually been running them. Now the reason that
a coherent decision and a sensible decision was not taken was
because no one party would take the risk. I would contend that
if all those parties were sitting round the table in one board
then they may have to take some shared decision, and they may
have come up with a better decision than the one that was made
Chairman: Mr Francis, I hardly know how to say
this to you, but I am required to suspend the Committee for ten
The Committee suspended from 5.09 pm to 5.17
pm for a division in the House.
Chairman: Gentlemen, I am going to risk the
wrath of some of my members and ask you to carry on.
322. Do you anticipate that your Council will
be represented on the new board?
(Mr Francis) The current information that I have on
the structure of the board is that there will be a board and then
there will be a membership of the company. If anybody were to
discuss the idea of us joining in, then I think that we would
want to make a positive contribution, but it would have to come
from a position where we would not be imprisoned in our major
role as passenger advocates, which enables us, of course, to criticise
when necessary. So if one envisaged the sort of structure that
is being discussed at the moment, it may be more appropriate for
the Rail Passengers Council to take a membership role rather than
a director role.
323. How do you think passenger interest should
be represented in the new structure?
(Mr Francis) I think that we can have influence without
being represented on the new structure; we have influence at the
present time, from outside. Our Council prefers to be proactive,
to participate and obviously to be at the centre when decisions
are made, that is how we can be effective on behalf of passengers.
But I can only repeat that I believe that that function may be
better carried out from a position of a member of a new organisation,
rather than a director, taking full fiduciary duties and other
duties that directors of that company would have to take.
324. In your evidence, you talk about the need
for the Strategic Rail Authority to be fully aware of the impact
of its activities, and you talk about their needing to have dialogue
with local authorities, devolved government, regional assemblies,
PTEs and others; does that mean that you do not think the Strategic
Rail Authority has been doing that up to now?
(Mr Francis) I think that there have been certainly
some failures within the Strategic Rail Authority, one would identify
performance management as one, because clearly we have not had
the sort of performance that is required. But I think the important
point is that there is now the opportunity to address all of this
within the new structure. It is no good thinking in terms of son
of Railtrack, a bank comes along and Railtrack re-emerges, I think
we have to think more radically, we have to seize the opportunity,
and I think the SRA have to rise to the challenge of changing
their culture quite considerably.
(Mr Smith) Just to add to that point, I think the
ability of other stake-holders in the industry to participate
has been really severely constrained by the current structure.
The future of the industry is through a national rail network,
but operating through a number of regional boards, where those
other stake-holders, such as Regional Development Agencies, devolved
government, PTEs, can participate and be involved in regional
decisions, and getting funding possibly into the railways from
those sources as well. There is a really good opportunity now
to align the railway with emerging democratic structures, which
has not been there before.
325. Have you got any more thoughts on how you
see that operating?
(Mr Smith) I think it could operate under the umbrella
of a national Railtrust, is what we are provisionally calling
it, which owns the whole national rail infrastructure, but within
that it could have a number of operating divisions, called boards,
for the sake of something else, which could have management on
them, mirroring the national model, but also these other stake-holders
who could participate regionally. And this would seem to combine
the energies and enthusiasm and need for a whole broader group
of people to be involved in a much more accountable railway.
(Mr Francis) May I just develop that point one stage
further, because having listened to some of the other evidence
this afternoon it does appear to me to be crucial that this regional
question is answered in full. And I think at the regional level
we ourselves are a federal organisation, and to answer partly
the thrust of your initial question then one would expect representation
of the Rail Passengers Committees, representing local passengers
on a route-by-route basis there.
326. How important is it, from your Council
members' point of view, for the operation of trains, the operators,
and the infrastructure, Railtrack, to be integrated?
(Mr Francis) I think that, if we can just turn the
clock back six years to privatisation, to my mind, one of the
things that went wrong with privatisation was that there was a
`big bang' approach taken, everything had to happen within a very
short period of time; clearly mistakes were made and we have paid
the price for those. I would advocate a far more experimental
basis, to answer your question. I do not think you have to say
wheel rail joined up is good, apart is bad; we now have the opportunity
to take a longer-term view. We could experiment with that in a
particular area, perhaps where good practice already exists, perhaps
in Scotland. Perhaps we should proceed a little more cautiously
before making too many assumptions at this stage.
327. How long would the experiment take?
(Mr Francis) I would imagine you would have to give
it a reasonable period of time, which would be in years rather
328. But Scotland is not very typical, is it?
(Mr Francis) That depends, of course, on how one might
redraw the franchising map.
329. When you say a reasonable period of time,
that is nothing, is it, it does not mean anything; has your Council
considered this? You have made a statement to that effect. Surely,
when you were considering that, that you thought that, well, if
we have to have a test case, that should be over a period of five,
ten years; what do you think?
(Mr Francis) I do not think I can answer that question.
It has to be given a reasonable period of time. I think it is
more for us to promote ideas and for the industry to respond in
a coherent manner to those ideas.
330. What are the disadvantages to that kind
of approach, have you thought of that side of the equation?
(Mr Francis) I can think of far more disadvantages
of simply taking a renationalised, wheel rail interface coming
together, when, quite clearly, the industry itself has not made
up its mind about that. I think you will talk to as many Train
Operating Companies who do not want to be involved in that sort
of structure as those that do. There does not appear to be a consensus
in the industry.
331. One of the failures is that this would
disintegrate the system more, would it not, if you had regions
having to cater for other people's trains to run over their track;
so do you see that there are disadvantages?
(Mr Smith) I think you are going to get disadvantages
and advantages with any system. If you were to integrate the railway
vertically, in four big regions, you have got a fragmented system
332. Four big regions; which would be the regions?
(Mr Smith) Scotland, Wales, Southern, Inter-City,
or whatever, you could do it on that model by cutting it into
four, or five, and integrate it vertically. But I think, the Council's,
experience over the last few years has shown that the national
rail network must remain a national network.
333. Would you say London would be part of the
(Mr Smith) Yes, very probably, yes.
334. And you think that would work?
(Mr Francis) I think you are leading us down a route
that we do not necessarily want to follow. We are not advocating
vertical integration with four companies, I think we are using
some examples of where we could go down the wrong route on this.
335. I did not mention the four companies, it
was your colleague; but what the RPC says, they are in favour
of train operators running the infrastructure, that is the statement
that you have made; now, all I am asking you is, how do we do
(Mr Smith) I think you have got to do it in different
places in different ways, frankly, because there is no doubt that
there has got to be a much better link between train operation
and the rails; that is probably going to fall short of actually
joining them together in common ownership, but there is no sense
that the Government is pushing in that direction, and if you want
to retain a national rail network, if you go down that route you
are going to lose that national rail network. So where you could
go as far as possible in joining together without common ownership
might be somewhere like Scotland, because, I think, if you think
in terms of a freehold/leasehold situation, the way you have with
property, where one person ultimately owns the whole interest
in something but then leases out sections of it for long periods,
but the ultimate ownership, the ultimate insurance, the ultimate
say, rests with one owner, and it is only that way that you can
replicate a command structure, which I mentioned before.
336. I was just going to pick up on that point;
thank you, Madam Chairman. In the environment you were just discussing,
what happens to the Virgin Cross-Country Services, to Railfreight,
and so forth, where you are crossing long geographic areas?
(Mr Smith) I think, if you were to take Scotland as
a model, the incursions into Scotland by GNER and Virgin are actually
relatively limited, and it should not be that difficult actually
to cope if you had a slightly different model of ownership in
Scotland. Obviously, with the lines coming into Waterloo you cannot
have that type of ownership, I think, that looks a lot more difficult,
or the lines into Liverpool Street, where you have got two major
operators both competing for space in a limited area. So it is
going to be horses for courses. But I think that is where the
regional dimension comes very strong in this.
337. Going back to the events of the last couple
of years, just to understand your perspective on the industry,
do you have a sense, given the fact that Lord Cullen has indicated
in his Second Report that the industry has actually continued
to become safer over the past decade, do you feel that the industry
overreacted to Hatfield, and are you concerned that an unduly
intense focus on the safety on what is a relatively safe form
of transportation will actually handicap the development of better
passenger services in the new franchise environment in the future?
(Mr Francis) Safety and performance are the different
sides of the same coin; you cannot separate them. Clearly, the
travelling public was substantially let down by the tragedy that
happened at Hatfield; that clearly proved that in that case the
railway was unsafe, and it clearly proved that mismanagement led
to that situation. So could the railway be safer, yes; using all
criteria, is railway the safest form of transport, the answer
to that question is yes. A balance has to be struck, we have to
have a properly safe service that passengers can take as a given.
With our discussions with passengers, with our enormous number
of letters, complaints and all the things that we receive, safety
is not addressed by passengers; the reason for that is clear,
because they take it as a given. It is a highly technical subject.
And that is where it must rest. It is clear to me that we are
lagging behind, in terms of our safety systems, other countries
in the world, and I think that Government has to recognise that
we have to play catch-up in this area, and therefore there is
likely to be a disproportionate amount of investment in safety
over the next few years.
(Mr Smith) I think you used a very interesting word
there, because you say that the industry took certain decisions
which led to the network being disrupted; it was not the industry,
it was Railtrack took that decision, acting in its own self-interest.
If the same type of problem were to emerge in the future, the
crucial thing is to get all the decision-makers round the table,
Government, the Strategic Rail Authority, passengers, all those
people, to take an informed decision that is in the best interests
of passengers and the country, not of one part of a fragmented
industry. And that is what the Government has got to try to achieve
in restructuring the rail industry now, to get that collegiate
approach to major decisions so that we do not get exposed again.
338. Can I ask you, briefly, about franchises,
really two questions. One is to give an assessment of the service
quality provided by most of the Train Operating Companies, given
the constraints that are imposed upon them by the network limitations
that you have mentioned; and also to touch on the two-year franchise
extensions, do you feel that that approach is more or less likely
to deliver a decent service to passengers?
(Mr Francis) Shall I take the first part and maybe
Anthony may like to take the second. The answer to your first
question is, patchy in the extreme. When we say that punctuality
and reliability are no better than at the time of British Rail,
pre-privatisation, that is true as a generalisation across the
whole network; that, of course, masks some quite good performance
and some quite appalling performance. Has privatisation brought
some benefits, yes, I believe it has, there has been additional
investment, there is a greater customer focus, there has been
marketing, a whole range of things. But on the basic principles
of what passengers want, punctuality, reliability, frequency,
cleanliness, no, we have not moved forward; and that is the challenge.
(Mr Smith) On your second point, one thing the Council
has always reiterated is, we have got to have some quick wins
in the railway, passengers have got to see some improvements.
And one of the chronic problems with the current system is its
inability to deliver short-term, relatively small-scale improvements
which deliver value for money. It can work away at some bigger
things, it cannot seem to do the small to medium things. Therefore,
the idea of quick wins from two-year franchises is quite attractive.
However, those quick wins have got to be in the context of long-term
planning and long-term investment, because long-term investment
is what makes the difference to the railways, in terms of building
big things, big capacity, more space, more rolling-stock, etc.,
etc. So, quick wins, yes, but in a long-term context.
(Mr Francis) I think you can only do short-term franchises
on a limited number of occasions; some have already been let,
some are already on long term. So we are not looking at the overall
picture when we talk in terms of short-term franchises.
339. Just one final point. There is a case that
says many of the problems with punctuality and performance over
the past few years have been caused by the fact that in many areas
the system is simply bursting at the seams, if somebody sneezes
on the way into Waterloo the whole system is disrupted for a day.
Given the potential to make that case, is it actually possible
to deliver improvements in the short term under any industry structure
whatsoever without the investment that expands capacity?
(Mr Francis) Yes, I believe you can; and there are,
and I think Anthony has referred to them, a number of less expensive
projects that would make quite a big difference, passing loops,
some changes in signalling, could make a substantial difference
to capacity issues. So I certainly do not give up on quick wins.
I believe they can be achieved, a quick win would be something
over a two-, three-, four-year period. And I can only echo what
Anthony Smith has said. It is vitally important; passengers have
had a rotten time. We have talked in terms of a rail renaissance,
that largely meant that passenger numbers have increased a lot.
Passengers have to understand they are in a rail renaissance,
and the way they will do that is if they are sitting on a new
train, the trains run more frequently, and if their station is
smarter, tidier and provides the facilities they want. The industry
has to recognise that against putting billions of pounds into
the ground, which is also needed too.