119.The privatisation of British Rail between 1994 and 1997 marked a separation between the UK’s rail infrastructure and its rail services. In England, Scotland and Wales, rail infrastructure is owned, operated and developed by Network Rail, a public sector body regulated by the Office of Rail and Road (ORR). This network encompasses 20,000 miles of track as well as thousands of bridges, tunnels, viaducts, signals and level crossings.
120.Passenger and freight services are run by privately-owned Train Operating Companies (TOCs) and Freight Operating Companies (FOCs) respectively. TOCs are the consumer face of the rail network, and generally compete for franchises to run specific routes, leasing rolling stock (trains) from rolling stock companies.
121.The rail system in Northern Ireland, in contrast, is publicly run. The Northern Ireland Transport Holding Company (trading jointly under the name Translink) is a public corporation, established in 1967 to take over the rail and bus activities of the Ulster Transport Authority. It is accountable to the Northern Ireland Department for Infrastructure for the operation of its subsidiary companies, including NI Railways, the railway operator in Northern Ireland. We explore future arrangements for road and rail transport on the island of Ireland in more detail in Chapter 8.
122.The UK’s rail network connects with the EU at two points, the Channel Tunnel link between Kent and Coquelles in northern France, and the Belfast-Dublin Enterprise Line. Services through the Channel Tunnel are discussed in Box 5.
The Channel Tunnel encompasses three 50 kilometre-long undersea tunnels between Folkestone (Kent) and Coquelles (Pas-de-Calais). Three types of services—Eurotunnel Shuttles, Eurostar passenger services and freight trains—run on two monodirectional single-track tunnels, while the third tunnel is a service tunnel.
The Treaty of Canterbury between the United Kingdom and France, signed in Canterbury Cathedral on 12 February 1986, authorised the construction and operation of the cross-Channel fixed link. It also established an Intergovernmental Commission (IGC) to govern the Tunnel on behalf of the UK and French governments.
Getlink, formerly Groupe Eurotunnel, manages and operates the Channel Tunnel under a Concession Agreement. It also runs the Tunnel’s vehicle shuttle services.
Eurostar is a separate company running high-speed passenger services through the Tunnel, connecting London with a number of European cities, including Paris, Brussels, Lille, Lyon, Avignon, Marseille, Rotterdam and Amsterdam.
In 2018, more than 22 million passengers travelled through the Tunnel on all services, amounting to a daily average of 60,000 passengers. The Tunnel carries approximately 26% of trade in goods between the UK and continental Europe, at a value of €140 billion per year.
123.Between 2001 and 2016, four EU legislative packages were adopted, with the aim of developing a single European rail area by gradually liberalising rail markets and making EU railway systems interoperable. The technical aspects of the legislation covered measures such as common provisions on railway licensing, train driver certification and safety requirements, as well as the creation of the European Railways Agency and its successor body, the European Union Agency for Railways (often still referred to as ‘the ERA’).
124.The fourth and final Railway Package of EU legislation was designed to complete the creation of a Single European Railway Area and make rail more competitive vis-à-vis other modes of transport. The ‘market pillar’ of the package opened domestic rail markets by introducing the right for railway undertakings established in one Member State to operate passenger services anywhere in the EU. It also provided mandatory tendering for public service contracts and set requirements for impartiality in the governance of railway infrastructure.
125.The EU’s Railway Packages have not yet been fully adopted in non-EU EEA countries. In particular, the recast Single European Railway Area Directive—which sets out high-level provisions on rail development, operators’ licensing and infrastructure charges—has as yet not been incorporated into the EEA Agreement, although predecessor legislation continues to apply.
126.The Government’s position on future UK-EU rail arrangements has remained unchanged from its negotiating slides published in June 2018: the UK will seek to conclude bilateral agreements with France, Belgium, Ireland and The Netherlands to ensure the continued smooth functioning and operation of services through the Channel Tunnel and on the Belfast-Dublin Enterprise line. This approach is reflected in the Political Declaration.
127.John Thomas, Director of Policy, Rail Delivery Group (RDG), explained how these bilateral agreements would preserve existing services: “Essentially, it would just be replicating the arrangements that we already have on driver licensing and cross-acceptance of rolling stock, along with arrangements for access, charging and suchlike.” HS1 stressed that bilateral agreements must “preserve current levels of fair and open access and provide an adequate enforcement mechanism to assure this”.
128.For the Channel Tunnel, Chris Jackson, Head of Transport Sector, Burges Salmon, explained that the “Treaty of Canterbury, the Concession Agreement and the rail usage contracts predate the European issues”, while acknowledging that a “formal arrangement” would still be required for the continuation of its services. Mr Thomas agreed, and said he would “find it difficult to believe that the French would not want a bilateral agreement to ensure that cross-channel services keep running”. This sentiment was shared by Eurostar, who supported the bilateral approach.
129.Several witnesses questioned why the Government’s approach should be limited to the preservation of existing services. RDG felt that a more ambitious set of agreements would “support future growth in the passenger market”. HS1 agreed, citing the example of a proposed direct service from London to Frankfurt: “It is not a question of if, but when, a new service on this route will happen.” It argued that “the lack of a bilateral agreement for trains between London and Germany will stand in the way of this growth opportunity and further delay this service”.
130.With regard to rail freight, FTA explained that “at present, operators tend to stop at the border where there is usually a change of locomotive and driver, but in the future our aspiration is that it should be possible to continue across borders in a more seamless way”. FTA therefore felt that limited bilateral arrangements were “not the most desirable outcome in the long run”, and that a rail agreement with the EU as a whole would broaden future options for rail freight.
131.Mr Thomas raised a specific question on the treatment of existing freight services that travelled beyond those states where a bilateral agreement would be in place: “What happens to the wagons that presumably have been certified in the UK … freight operators change drivers and [locomotives] in France anyway, and they would therefore be certified to go beyond France, Belgium and The Netherlands. It is about the wagons.”
132.Mr Jackson highlighted that the UK’s rail interests in the EU extended beyond operating services. He warned against conflation of the “actual trains flowing”, which required a bilateral agreement, and UK-certified exports such as rolling stock components, which would also require some form of recognition. This point was highlighted by the Government’s own ‘no deal’ notices on rail transport, discussed in Box 6.
The Government’s rail transport ‘no deal’ notice, published on 12 October 2018, confirmed that “if there’s no deal, operator licences issued by the ORR (as the UK’s licensing authority) to operators currently operating in the EU would not remain valid in the EU after EU exit”. This would mean that operators using ORR licences to run domestic services in another EU country would need to re-apply for an operator licence in an EU country.
A second notice, published on the same day, on rail safety and standards, listed UK certifications that would no longer be recognised in the EU if there was no deal, and advised stakeholders where it would be necessary to re-apply for certifications from an EU authority.
We note that on 27 March 2019 the EU adopted temporary measures to extend the validity of certificates, authorisations and licences necessary to main UK-EU cross-border rail services.
Sources: Department for Transport, ‘Rail transport if there’s no Brexit deal’: [accessed 18 December 2018] and Department for Transport, ‘Meeting rail safety and standards if there’s no Brexit deal’: [accessed 18 December 2018]; Regulation (EU) 2019/503 of the European Parliament and of the Council of 25 March 2019 on certain aspects of railway safety and connectivity with regard to the withdrawal of the United Kingdom from the Union, (27 March 2019)
133.Mr Thomas also reflected on the broader question of reciprocal market access for operators and manufacturers:
“We have welcomed the introduction of foreign companies in our market. They enhance competition … they also bring some of their expertise. For example, at c2c, Trenitalia has brought a huge amount of expertise in digital signalling. We should welcome that. Furthermore, the opportunities for market openings in the EU have allowed British companies to access those markets. For example, National Express and Go-Ahead in particular are operating franchise-type agreements in Germany.”
134.Mr Thomas said RDG had “heard nothing to make [them] believe that access to the UK market will be restricted for those companies”, and hoped this would be reciprocated. Mr Jackson concluded that this would be a matter for future UK-EU agreement on procurement arrangements.
135.Both of the Government’s ‘no deal’ notices referred to the UK’s continuing obligations under the Convention concerning International Carriage by Rail (COTIF). The Government explained that COTIF sought to “facilitate and promote international passenger and freight movements by rail through increasing interoperability and harmonising standards”, adding that “the UK is a member of COTIF in its own right, as are both the EU and the individual EU Member States”.
136. RDG explained that COTIF included relevant appendices on international carriage of passengers, use of vehicles and carriage of freight, which “may be used to back-fill some gaps”. It said it was “currently working with the Intergovernmental Organisation for International Carriage by Rail (OTIF) and the International Transport Committee (CIT) to understand the framework”. The Community of European Railway and Infrastructure Companies (CER) asserted that rail arrangements under COTIF “would not match existing access”, but could provide a stopgap.
137.The Secretary of State reiterated that the Government would only seek bilateral rail agreements in the “limited places where they are really necessary at the moment”.
138.In our later evidence session with the Minister of State, Mr Jones added:
“The UK is essentially a very large domestic market with one connecting service to the continent and the cross-border service on the island of Ireland. The conclusion was reached early on that actually all we needed to do was ensure that we had the arrangements in place for those services through the Channel Tunnel and the Enterprise service from Dublin to Belfast to continue.”
139.On franchising, Mr Jones said that although “EU law provides some help and guarantees … there is nothing to stop the UK opening up its franchise markets to an EU country [and] nothing to stop EU countries opening up their franchise markets to UK companies as well”.
140.Mr Jones concluded that the implications of separating rail from the overall UK-EU trade agreement were therefore “very limited”.
141.On the progress of bilateral negotiations, Mr Jones said there was “quite a bit to work through”, but “good contacts” had been made with Member States and operators.
142.While the UK’s railway is largely domestic, the UK has strong interests in the wider EU rail industry. The fact that UK and EU operators, manufacturers and drivers access each other’s markets, to mutual benefit, must not be overlooked.
143.The Government has rejected the option of a rail agreement with the EU. Cross-border services, namely the Dublin-Belfast Enterprise Line and services through the Channel Tunnel, will instead be addressed through bilateral agreements. This approach has been agreed with the Commission and is reiterated in the Political Declaration. We believe that securing the continuation of these services as they operate now is in the interest of all sides and we encourage the swift conclusion of such agreements once the UK becomes a third country.
144.While we accept that maintaining existing services is the most urgent priority, a more far-reaching set of bilateral agreements would provide greater certainty for long-distance freight services and support the future expansion of UK international freight and passenger services. We note that the wording of the relevant text in the Political Declaration does not preclude additional bilateral agreements.
145.While bilateral agreements would ensure the continued operation of international rail services, such agreements would not support the recognition of UK operator or train driving licences in the EU generally nor UK certified components placed on the market in the EU. The extent to which the UK’s continuing obligations under the Convention concerning International Carriage by Rail (COTIF) could alleviate these effects, if at all, are unclear. The Government should provide clarity on this matter.
146.The primary role of the EU Agency for Railways (ERA) is to support the development of the single European rail area by developing common technical and operational standards, in the form of Technical Specifications for Interoperability (TSIs). From 16 June 2019 the ERA will become the authority responsible for issuing authorisations for rail vehicles placed on the market and for issuing single safety certificates for railway undertakings. It will also become the system authority for the European Railway Traffic Management System (ERTMS). Subject to certain conditions, and with appropriate financial and staffing contributions, third countries can participate in the ERA and be represented on the management board (without voting rights). Norway and Switzerland have arrangements for ERA participation and cooperation respectively.
147.Unlike for other EU transport agencies, the White Paper did not envisage any ongoing UK participation in or cooperation with the ERA after Brexit. This was met with disappointment by our witnesses. The Railway Industry Association (RIA) was clear and unambiguous in its call for the Government to “negotiate membership of the European Union Agency for Railways (ERA) as part of a Brexit deal, mirroring its approach to the EU aviation, chemicals and medicine agencies”. RDG held that the absence of UK participation would “significantly reduce any ability to influence TSIs and Common Safety Methods (where the UK has successfully provided significant influence)”. Mr Thomas said that the UK would need to find ways of “influencing indirectly TSIs”.
148.RDG argued that the UK would need some form of relationship with the ERA after Brexit:
“There are a number of areas where it will be essential to maintain close relationships with The Agency to enable international train operations. These work in both directions, with the UK recognising the Single Safety Certificates issued by The Agency along with train driving licences issued by other member states and cross acceptance certificates for rolling stock. Equally this needs to be a two-way relationship with The Agency recognising UK based maintenance activity and UK-issued train driving licences.”
149.HS1 could not identify any positive impact arising out of UK divergence from EU rail standards. This assessment was shared by FTA. On the other hand, while emphasising the need for harmonisation on international services, Translink saw “some advantage in the UK being able to take an independent regionalised view of the precise needs of different rail networks and services”. Andrew Meaney, Head of Transport Team, Oxera, told us: “You need interoperability only where things need to interoperate.” He also saw a case for changing technical standards “relative to those that prevail in mainland Europe”.
150.RIA suggested that the application of EU TSIs had benefited the UK, as “UK rail supply chain products can be exported to EU countries for use without modification, thus avoiding unnecessary cost increases and retaining economies of scale and competitiveness”. They felt that divergence on technical standards risked the creation of a bespoke UK market, and would discourage exporting companies from basing themselves in the UK. Damian Testa, Senior Policy Manager, RIA, pointed out that EU multinationals had “manufacturing sites in the UK [and] … we want that relationship sustained”.
151.Dr Matthew Niblett, Director of the Independent Transport Commission, raised the related point that the UK industry had “been very active in the development of the EU TSIs … [and] widened the market for products incorporating the standards around the world”. He felt that non-EU TSI products would have more limited export opportunities.
152.RDG described a situation where UK rail suppliers were required to manufacture to one set of standards for export and another for domestic use as “unenviable”—it would risk “losing them economies of scale and potentially pushing additional costs to the industry and ultimately passengers and freight customers”. Despite a “presumption of convergence”, Mr Thomas anticipated some “instances where divergence makes sense”. He told us that “the industry” was developing a process to assess cases for divergence “based on a whole system and whole life costs … not on benefits to an individual part of the industry”.
153.While most witnesses focused on divergence from technical standards, Mr Meaney suggested that Brexit could present the opportunity to look at changes to the structure of the UK’s rail market, for example in relation to the separate of rail infrastructure and rail operations.
154.Oxera argued that the separation in Great Britain of rail infrastructure (owned and managed by Network Rail) and the passenger and freight services running on it (operated commercially under franchise arrangements), while adopted as a result of privatisation, was now widespread: “Since then, EU Directives have developed in a broadly consistent manner with the GB model.”
155.Mr Jackson recognised that EU policy on rail services had moved towards an open access model, but emphasised that the “main legal prohibition on amalgamating train and track is in primary UK legislation that predates the relevant implementation of the EU package”. Mr Jackson told us that “you quite often see infrastructure managers [in the EU] that are separated in governance terms but not necessarily in ownership terms from the big national providers”. He cited the examples of France and Germany, where operations were “quite close together”, but still compliant with EU law. He concluded that the desirability of separating track and train was a policy question, but a fully disaggregated system was not an EU requirement.
156.The Secretary of State was unequivocal on future UK participation in the ERA: “I do not expect or want us to remain part of the European rail regulatory body. I see no need at all.” He could not see “why we would want to be part of something that sets standards internationally”. Instead he believed that “we can follow the standards we choose to follow, but we can set our own standards for our own network”.
157.When asked for an example, Mr Grayling told us: “the European rail agency wants us to amend the platform heights on HS2. Doing so would mean we could not provide level access for disabled people to the trains.” He saw no reason why the UK “should … build platforms to the same height as the rest of the European Union after we have left”.
158.In our evidence session with the Minister of State, Mr Jones said that the ERA had only recently taken the role of “giving safety certifications, whether that is licences for train drivers or certifications for whole rail vehicles or individual components of those vehicles”, and that this role would revert to the UK. He conceded, however, that UK-certified products destined for the EU would then need “certification from an EU authority as well”.
159.On standards, the Government stated that the option of regulatory divergence should only be exercised “where it is clearly in the UK’s interests”, and that this would be “subject to consultation”. When pressed on the implications of divergence for manufacturers, Mr Grayling said: “If you are a successful business in the UK, selling in three or four continents, you are almost certainly going to have to produce products with different specifications to meet the needs of those continents.” He argued that exporters “manage to do business perfectly well, meeting a whole variety of standards in different places”.
160.In our follow-up evidence session, Mr Jones added: “Clearly, for rolling stock, standards for electronics, and that kind of thing it is going to make sense for everyone to build to common standards.” Although there was “no anticipation that we are suddenly going to diverge”, the UK would have “the potential freedom [to do so]”.
161.Through its membership of the European Union Agency for Railways (ERA), the UK has been active in the development of a range of common standards for European rail networks. The Government has ruled out participation in the ERA after Brexit. Consequently, the UK will not enjoy the same level of influence on European rail standards and cooperation but will have greater freedom on domestic standards.
163.Interoperability and harmonised standards have many benefits for cross-border services. There are, however, circumstances where divergence from EU standards would better suit local conditions on domestic routes. Such divergence should be approached with caution and on the basis of objective criteria. We call on the Government to work with the industry to bring forward more details on how this could be managed.
164.Future divergence on standards must also be considered in the context of the wider rail industry. Rail manufacturers benefit from the economies of scale and export opportunities associated with standardised products. We agree with the weight of evidence that large-scale divergence would decrease the UK’s attractiveness as a base for overseas manufacturers.
165.The separation of rail infrastructure and operations is a requirement under UK legislation (applied in Great Britain) and predates related EU legislation. We recognise that EU law has moved towards the GB model, but that it does not require complete separation. Indeed, some Member States have more closely connected infrastructure and operating services, which are compliant with EU law. We therefore conclude that membership of the EU has not substantially constrained GB’s ability to move away from complete separation.
166.We did not seek specific evidence on the impact of future customs and immigration arrangements on rail terminals. Nonetheless, this was a key concern for Channel Tunnel services. Getlink stressed that it was “crucial that the outcome of any agreement maintains the fast and frictionless movement of goods and people at the border that has contributed to the growth of trade through the Channel Tunnel”.
167.On customs, Getlink explained that there were sites either side of the Tunnel “for safety and security inspections”, but that “neither site was intended as customs clearance points”. They therefore had “space and capacity constraints”. Getlink cited warnings that the conversion of the UK site (Dollands Moor) for customs use would lead to “congestion and delays which would disrupt trading, business supply chains, and in particular just-in-time delivery”.
168.The Channel Tunnel plays a key role in UK-EU trade of goods and facilitates leisure and business travel for many millions of people each year. The Government has made clear its intention to secure a bilateral agreement with France to ensure the continued operation of Channel Tunnel services. We also recognise that the future of these services will be significantly affected by matters outside the Department for Transport’s remit, namely customs and immigration arrangements.
169.RDG highlighted that 20% of the UK rail industry’s workforce were non-UK EU nationals. Mr Testa added: “if you draw a line at Derby, south of that line almost half of the rail supply industry workforce is from the wider EU”. RDG called on the Government to work with industry to ensure “access to a sufficient number of skilled workers either trained domestically or from the EU”. Mr Testa said that RIA were “working very closely with the National Skills Academy for Rail, which is generating new apprenticeship courses to fill that gap”.
170.We recognise the sizeable contribution made by EU workers to the UK’s rail industry, and note that concerns about future access to EU talent span many industries. We welcome initiatives to improve domestic training opportunities in the rail sector, which will be one part of maintaining the supply of skills post-Brexit.
138 Different arrangements apply to the HS1 high speed line between London St Pancras International and the Channel Tunnel. HS1 Ltd is responsible for the overall management and operation of the HS1 network and subcontracts delivery of operations, maintenance and renewals to Network Rail (High Speed) Ltd. Office of Rail and Road, ORR’s annual report on HS1 Ltd 2017–2018 (July 2018): [accessed 18 December 2018]
139 Network Rail Limited, Annual Report and Accounts 2018, Cm 9630, July 2018, p 4: [accessed 30 November 2018
140 Some franchises have been devolved to Scotland, Wales, London and Merseyside and are managed locally.
141 Translink, ‘History’: [accessed 18 December 2018]
142 European Commission, ‘Rail: Fourth railway package of 2016’: [accessed 18 December 2018]
143 Directive 2012/34/EU of the European Parliament and of the Council of 21 November 2012 establishing a single European railway area (recast), (14 December 2012). The Directive has brought together two pieces of legislation—Council Directive 95/18/EC of 19 June 1995 on the licensing of railway undertakings, (19 June 1995), and Directive 2001/13/EC of the European Parliament and of the Council of 26 February 2001 amending Council Directive 95/18/EC on the licensing of railway undertakings, (15 March 2001)—that were incorporated into the EEA Agreement and are still in force.
144 HM Government, Framework for the UK-EU partnership: Transport (June 2018): [accessed 18 December 2018]
145 (John Thomas)
146 Written evidence from HS1 Ltd ()
147 (Chris Jackson)
148 (John Thomas)
149 Written evidence from Eurostar International Ltd ()
150 Written evidence from Rail Delivery Group ()
151 Written evidence from HS1 Ltd ()
152 Written evidence from the Freight Transport Association ()
153 (John Thomas)
154 (Chris Jackson)
155 (John Thomas)
157 (Chris Jackson)
158 Written evidence from the Department for Transport ()
159 Written evidence from Rail Delivery Group ()
160 Written evidence from The Community of European Railway and Infrastructure Companies ()
161 (Chris Grayling MP)
162 (Martin Jones)
163 (Martin Jones)
166 TSIs primarily cover safety, reliability and availability, health, environmental protection, technical compatibility and accessibility.
167 The European Rail Traffic Management System (ERTMS) comprises the European Train Control System (ETCS) and the Global System for Mobile communications–Railway (GSM-R).
168 Regulation (EU) 2016/796 requires that third countries participating in the ERA adopt and apply Union law, or equivalent national measures, in the field covered by the Regulation. Regulation (EU) 2016/796 of the European Parliament and of the Council of 11 May 2016 on the European Union Agency for Railways and repealing Regulation (EC) No 881/2004, (26 May 2016)
169 Written evidence from Railway Industry Association ()
170 Written evidence from Rail Delivery Group ()
171 (John Thomas)
172 Written evidence from Rail Delivery Group ()
173 Written evidence from HS1 Ltd ()
174 Written evidence from the Freight Transport Association ()
175 Written evidence from Translink ()
176 (Andrew Meaney)
177 Written evidence from Railway Industry Association ()
178 (Damian Testa)
179 (Dr Matthew Niblett)
180 Written evidence from Rail Delivery Group ()
181 (John Thomas)
182 (Andrew Meaney)
183 Written evidence from Oxera Consulting ()
184 (Chris Jackson)
185 (Chris Grayling MP)
187 (Martin Jones)
188 Written evidence from the Department for Transport ()
189 (Chris Grayling MP)
190 (Martin Jones)
191 Written evidence from Getlink ()
193 Written evidence from Rail Delivery Group ()
194 (Damian Testa)
195 Written evidence from Rail Delivery Group ()
196 (Damian Testa)