Memorandum by RMT (REN 38)
RAIL SERVICES IN THE NORTH OF ENGLAND
INTRODUCTION
1. RMT welcome the opportunity to comment
on the Committee's Inquiry into Rail Services in the North of
England. We represent 58,000 workers across all sectors of the
transport industry. We are the largest union in the rail industry
and have an estimated 10,000 members employed by rail operators
in Northern England.
2. Our evidence is structured into the three
main strands of the Committee's Inquiry: an analysis of the existing
franchises; an exploration of the investment plans for the region;
and a discussion of the wider role of rail services in the economic
and social development of the North of England.
THE CURRENT
FRANCHISE HOLDERS
3. Services in the North of England are
run predominantly by the following companies:
| Area | Franchise Holder
|
| North East | Arriva
|
| North West | First Group
|
| Merseyrail | Arriva
|
| West Coast Main Line | Virgin
|
| East Coast Main Line | GNER
|
| Cross Country | Virgin
|
4. The structure of rail privatisation created companies
which were dependent upon national and local authority subsidy
for their survival. Rail Industry Monitor (RIM) note that while
the average operating margin for all UK rail companies was 2.2%
in 2000, so-called regional operators made an average loss of
6.6% on turnover.
5. The 11 franchises that made an operating loss in 2000,
include four who operate services within the North: Arriva Northern,
First North Western, Arriva Merseyrail and Virgin Cross-Country.
According to RIM, PTE subsidy per rail kilometre in the North
varies substantially from 34.7p in Greater Manchester to 14.8p
in West Yorkshire and just 10.5p in Tyne and Wear.
6. The overall quality of service for the North can be
gauged from the following table, which reflects punctuality figures
for the period 2001-02:
|
| Franchise | Punctuality Figures 2001-02
| % +/- National Average
|
|
| National Average | 78%
| — |
| Regional Services Average | 79.2%
| +1.2% |
| Arriva Merseyside | 81.2%
| +3.2% |
| Arriva Northern | 75.8%
| -2.2% |
| First North Western | 87.3%
| +9.3% |
| Virgin Cross Country | 63.7%
| -14.3% |
| Virgin West Coast | 68.8%
| -9.2% |
| GNER | 70%
| -8% |
| All "Northern" franchises | 74.5%
| -3.5% |
|
Source: DTLR. Figures for each quarter added and divided
by four
7. The picture largely reflects the poor levels of performance
of the national railway, with slightly more than one in four of
all "northern" services late during 2001-02—with
inter-urban services particularly poor. Local services in particular
have been the focus of substantial passenger discontent, since
privatisation.
ARRIVA TRAINS
8. The Merseyrail and North East were awarded to MTL,
a bus company, following privatisation. Arriva bought MTL and
took over the franchises in January 2000. The combined train kilometres
of the two franchises gives Arriva a 9.5% share of the national
rail market.
9. It quickly emerged that neither franchise was economic
at the subsidy levels set by privatisation, and Arriva received
an extra £64 million on top of existing subsidies of £199
million to retain both franchise for a further year in March 2001.
The SRA's justification for the additional funding into the Northern
Spirit franchise (and also the Mersey Electrics franchise) was
that there would be real improvements in service.
10. In reality, Arriva's North East franchise has been
beset by difficulties since extension was agreed:
— In November 2000, a landslip caused severe problems
on the Durham Coast route. Trains from Middlesborough and Hartlepool
to Sunderland and Newcastle were severely affected for six months.
— A chronic driver shortage led to the cancellation
of 80 services a day in September 2001 and the cancellation of
the winter timetable, with trains replaced by buses for five months
on busy commuter routes from Pontefract and Knottingley into Leeds.
The SRA fined Arriva £2 million as a result of its poor performance
in the aftermath of the driver shortage.
— In February 2002, Arriva was forced by the Advertising
Standards Agency to withdraw an advert for new staff, which claimed
they "provide efficient passenger rail services across the
North of England." The ASA demanded withdrawal of the advertisement
"until it can be substantiated."
11. The attempts by Arriva to resolve the driver shortages
have led to serious industrial relations problems. A restructuring
agreement boosted driver pay by up to 18%. At the same time, low
increases for guards and station staff resulted in ballots for
strike action by both RMT and our sister union TSSA.
12. Arriva's current position with regard to the guards'
dispute is that they are unprepared to negotiate further and that
they consider themselves in dispute with RMT until the end of
their franchise in 2003.
FIRST NORTH
WESTERN
13. First Group, which runs the North Western franchise,
is responsible for 12.9% of national rail kilometres, and has
been subject to similar stinging criticism to Arriva.
14. David Butterworth of the Rail Passengers Council
summed up the year for First North Western customers as follows:
"Workers who arrive late for work as a result of late
running trains face the sack, whilst passengers bound for Manchester
Airport have a nerve-racking start to their holiday." First
North Western must work very hard to improve performance if it
is to attract passengers back."
15. The RPC also singled out First North Western for
criticism regarding lack of information on services and litter
on trains.
INVESTMENT PLANS
FOR THE
REGION
16. The DETLR's 10 Year Transport Strategy has been rightly
criticised by the Transport Select Committee for its lack of vision
and vagueness on the question of resources. It can also be attacked
as being focussed on the South East to the exclusion of the North
and other regions. This is despite the fact that, as the SRA acknowledge,
the current wave of economic prosperity has seen ridership increase
substantially in the North, particularly in urban areas.
17. The 10 Year Plan includes only two projects (West
Coast Route Modernisation and Cross Country upgrade) for which
there is already committed funding. Beyond that the 13 investment
projects identified by the SRA as having major priority, but no
committed funding as yet, include only three which will provide
any potential improvements for passengers in the North (Midland
Main Line upgrade, East Coast Main Line upgrade and TransPennine
upgrade).
18. Even these projects are reliant upon private sector
funding which, as the Committee will know, has now been revised
downwards from the £34.5 billion envisaged by the Government
over 10 years to £23 billion by the SRA in their 2002 Corporate
Plan. Unless the Government are able to provide more money it
is now clear that a number of these projects, and the TransPennine
Express proposal in particular, will not take place.
19. The Greater Manchester Passenger Transport Authority
have stated that they are:
"extremely disappointed by the Strategic Rail Authority's
long term plan for the future of Britain's railways and the lack
of financial resources allocated for the North. Addressing the
capacity issues in Manchester city centre is one of the Authority's
and the region's top priorities, as the problem with bottlenecks
in the city is having an impact on the whole of the network. In
the long term of course, it is having an adverse affect on the
economic and social development of the region."
20. The SRA/Government investment plans sits alongside
the SRA's proposals to redraw the franchising map fro the North.
It is proposed that two new franchises will provide regional services.
The first, TransPennine Express, will be drawn from the existing
inter-urban services currently provided by Arriva Northern and
First North Western. The second will combine whatever is left
from the two franchises into a new Northern franchise. It is intended
that the current Merseyrail franchise will be retained as a distinct
area.
21. One of the problems of the current privatised structure
is that because of the dominance of the industry by a small number
of operators, franchises can often be awarded to companies who
have a poor record elsewhere.
22. Most passengers, for example, would be disappointed
to learn that the bidders for the TransPennine and Northern franchises
included Connex, who were stripped of their SouthCentral franchise
for poor performance, Arriva who were recently voted the Uk's
worst rail operator and First Group whose performance in the North
and South West has attracted heavy criticism and threats of passenger
strikes.
THE TRANSPENNINE
EXPRESS
23. The history of the TransPennine project (TPE), in
RMT's view, serves as an indictment of the failure of the privatised
railway to deliver improvements for passengers in the North.
24. The TPE was announced with a fanfare by the SRA in
2000. It proposed a new inter-city franchise, which would connect
towns and cities in the North of England with the major transport
hubs of Manchester, Liverpool and Leeds.
25. Sir Alistair Morton, the then Chairman of the SRA,
described the project as follows:
"The TPE network is to be upgraded to full high-speed,
intercity status, running more trains per day than operators such
as Midland Main Line or Anglia, and carrying more passengers than
Gatwick Express. We aim to put in place major improvements in
East-West travel, linking Newcastle, York and Hull with Manchester
and Liverpool."
26. Best and final bids for the franchise were originally
received by the SRA in March 2001. Strong industry rumours suggested
that the already discredited South East operator Connex were the
preferred bidder.
27. After the 2001 General Election, bidding was restarted
following concerns about the robustness of the process and its
vulnerability to legal challenge from the other bidders. At this
point, the scope of the franchise was reduced substantially, so
that the winner of the bidding would now be the company that offered
"best value".
28. The current plan is that the new franchise will start
in 2003. However, SRA have now scaled down Sir Alistair's "intercity"
concept so that there will be:
— No infrastructure investment in the first contract
phase.
— Proposed major infrastructure enhancements to
the infrastructure surrounding Manchester Victoria now "off
the agenda".
— New bids will be focussed around Manchester Piccadilly
at which there are major train path constraints.
— No re-opening of the Sheffield/Manchester route
via Woodhead Tunnel as proposed by the South Yorkshire PTA because
of lack of funds and train paths at Manchester.
— Rolling stock is now likely to be pre-owned or
cascaded (probably ex-Midland Main Line) rather than new "intercity
stock.
29. In two years, the dream of a Northern intercity network
has been downgraded to a smartening up of the existing network.
RMT's view is that this is a microcosm of the wider problems of
the privatised industry. Investment is dependent upon private
finance, which itself is vulnerable to the type of downturn that
happened across the network after Hatfield. Meantime, the SRA
is reliant upon franchisees like First Group, Arriva and Connex
to pick up the pieces whose own record with their existing franchises
is poor- and in the case of Connex resulted in them being stripped
of their franchise.
THE WIDER
ROLE OF
RAIL IN
THE REGION
30. Northern England takes up 16% of the area of Great
Britain, accounts for some 25% of the population and provides
21% of GDP. It contains the major business centres of Manchester,
Leeds, Liverpool and Newcastle.
31. The importance of rail to the region can be gauged
by the figures for car ownership:
Households with No car
| Great Britain | 27%
|
| North East | 39%
|
| North West | 30%
|
| Yorkshire and Humberside | 32%
|
32. The Region is more heavily dependent upon public
transport in general, and rail in particular, than any other area.
However, despite a small number of high profile light rail schemes,
which have attracted increasing numbers onto public transport,
the general pattern created by deregulation and privatisation
is of a region that has been forgotten.
33. Bus patronage across the region has fallen dramatically
since deregulation (journeys down 34% in the North East, 22% in
the North West and 30% in Yorkshire and Humberside) and the real
fear must be that a similar pattern will emerge for rail unless
substantial investment is made in our rail infrastructure.
34. This is important because the Government policy to
reduce social inequality and exclusion are intimately bound up
with access to public transport—particularly in an area
with low levels of car ownership and therefore mobility.
35. This is despite the growing importance of Manchester
and Leeds as business centres, and of Manchester Airport as key
drivers for prosperity. Major improvements are needed across the
region, not just to the TransPennine routes but also on the Cinderella
lines. Commuter services in and around major cities like Manchester,
Leeds, Bradford and Liverpool continue to be overcrowded, while
the growth of Manchester Airport may well be seriously impacted
by the downgrading of the TPE franchise.
36. Equally, it is often forgotten that for many passengers
in the North the flagship West Coast and East Coast Main Lines
are not simply corridors to London but rather are an important
link between relatively close Northern cities.
CONCLUSION
37. RMT welcome the Committee's Inquiry into rail services
in the North of England. We believe that the problems in this
area illustrate wider problems with the Government's rail strategy:
lack of coordination; lack of clarity on future plans; and over-reliance
on private funding and discredited private companies.
38. The current franchising process serves to institutionalise
these problems rather than resolve them, and RMT's considered
view is that without a properly accountable public railway improvements
will be difficult to deliver.
39. RMT will welcome the opportunity to provide verbal
evidence in support of this paper.
10 June 2002
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