Annex A
CV WITH SPECIAL
ATTENTION TO
1993-98
My experience of the rail privatisation process
started on 18 January 1993 when Roger Salmon, Franchising Director
designate, and I moved into the ninth floor of Number 2 Marsham
Street, acting as special advisor to John McGregor MP, Secretary
of State for Transport.
The Railways Bill was highly controversial and
took the best part of the year to go through both Houses before
gaining Royal Assent; there were many amendments, some technical
but others involving serious points of substance, including guarantees
of control over fares and of protection for special groups.
I saw my role as advising on the "public
interest" aspects of the future regulatory matrix, that combination
of licence obligations and access agreements which would form
the legal basis on which the track authority and the train operating
companies engaged in the business of running a national railway
network. But control over the management of the Bill and the establishment
of the "matrix" rested with Government.
The rail regulator's statutory powers came into
effect in April 1994 by which time the "matrix" had
been established for shadow running of the railway, still under
the ownership of British Railways but with responsibility for
privatisation resting with the Government.
The process of privatising the passenger train
operators was not completed until April 1997, a month before the
general Election, but Railtrack had been privatised in 1996 and
the ROSCO's well before that. Thus by the time the Labour government
was returned to power no railway assets remained in the public
sector and very few powers of control remained for the Government—the
franchises then running on seven years or more contracts settled
by the Franchising Director.
Our aim from the period 1994-98 was to seek
to ensure that the matrix contained sufficient incentives and
obligations on the industry to take forward improvements in the
management of the assets transferred and to keep up pressure for
improvements. Privatisation was simply a means to an end: the
employment of access to the capital markets and to "new thinking"
to make substantial improvements to the railway network for the
benefit of passengers and freight users.
During that period we set charge controls for
Railtrack, for the first time allowing the company to look ahead
and plan for a six year period without annual recourse to the
Treasury for funds: once Railtrack had been privatised it was
no longer subject to the External Financing Limit and could access
the capital markets to fund the necessary programme for modernisation
of its assets. When Railtrack appeared unresponsive to demands
from its users for funding we changed their licence so as to make
them more obviously accountable than under the terms of their
existing license. We also introduced and applied Key Performance
Indicators and obtained legally binding agreements from Railtrack
in lieu of penalties. We were also actively engaged in seeking
to improve the performance of the train operating companies over
and above their minimum franchise obligations.
Our activities were recorded in the five Annual
Reports made to the Secretary of State. In 1997 and 1998 it was
clear that the Secretary of State was seeking new legislation
to change the basis of the institutional control over the railways
and to introduce a Strategic Rail Authority, which would acquire
many of the functions of the Rail Regulator including those of
passenger protection. That was not introduced until the Transport
Act 2000 but provision had been made for shadow running under
the Chairmanship of Sir Alastair Morton in 1999.
My term of office closed at the end of my five
year contract at 30 November 1998.
John Swift QC
18 February 2003
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