Future of Rail Services

Jim Shannon Excerpts

Tuesday 20th December 2022 Westminster Hall

[Stephen Hammond (Wimbledon) (Con)]

I beg to move,

That this House has considered the future of rail services.

It is a pleasure to see you in the Chair, Mr Robertson. I want to thank Mr Speaker for giving me the opportunity to host this debate. I have always believed that rail is critical to the success of our country. It connects our cities, towns and communities; it drives economic regeneration and growth; it is the employer of the present but also of the future, as new technological skills will be required; and it is the key to achieving many of our decarbonisation ambitions.

It is clear that the pandemic has caused many industries catastrophic problems, and the rail industry is no different. When covid hit, ridership fell to about 4%, which was a record low. Train operating companies that had been providing the Treasury with £100 million every four weeks were requiring a subsidy of something like £600 million. The franchise system—which had been broadly successful from 1992 to 2016, when it experienced a number of problems—collapsed and the Government became the operator of last resort.

It is not the case that all the problems of the industry came merely from the pandemic. The franchising system had worked well until 2016, but the more prescriptive franchising system set out in that round saw too much prescription and too little room for initiative. A distinguished predecessor of my hon. Friend the Minister recounts a story of how he was required to set the time of the last train from Southampton to Bournemouth. It should never be the role of Ministers to set timetables. There was too much interference.

Network Rail was the cause of 80% of the delays, which is what caused most passenger dissatisfaction. The new timetable that was introduced in 2018 collapsed in September that year, which triggered the response from the Department to have the Williams review. It is true that the Williams review took some time, but it has now come forward and highlighted some problems. There are some very good elements of the Williams review. I have already mentioned the incentives to decarbonisation and the suggestion that no one disagrees that the industry needs a guiding mind.

Equally, however, the review has embedded a number of problems. The concept of the guiding mind, the acceptance that the railways can drive social mobility and a cleaner, greener transport system, and that technology must be at the heart of future investment, are all absolutely key. However, I want to concentrate on two flaws of the Williams plan. First, the creation of Great British Railways as the guiding mind, the system operator, maintainer, enhancer and controller of operations, with the setting of passenger service contracts, safety and ticketing—I could go on—is to all extents and purposes the renationalisation of the railway system. Some in this room might think that is a good idea. Those of us old enough to have experienced British Rail will realise that no one in future would want to wear such rose-tinted glasses.

There is also concern that there is too little emphasis in the plan on the benefits that the private sector has brought to the railway. It gives no incentive for operators to offer an enhanced service, and suggests little punitive action if it is a poor service. The passenger service operating contracts may well be a short-term palliative, but if adopted in the long run they would drive the private sector from the industry.

[Jim Shannon (Strangford) (DUP)]

I commend the hon. Gentleman for securing this debate. The key thing for me is the customer, and I know that that is the key thing for him as well. Does he agree that connectivity is essential to rural communities? The ability to jump on the tube or a train is missing in too many communities. We must look at not simply holding on to what we have, but at expanding the network so that we can tackle rural isolation. That is what the customer wants.

[Stephen Hammond]

The hon. Gentleman is exactly right. If he listens to my speech later on, he will hear me say that the passenger must be at the heart of the new railway system. The new system needs not to go back to what it was previously but to evolve. In a few moments’ time, he will hear me make that point.

I have always been in favour of privatised railways, although I accept that there are some legitimate criticisms. However, the creation of a not just fat but staggeringly obese controller at the centre and heart of a hybrid railway system is likely to be the worst of all worlds. I can only echo the view of so many senior rail experts who believe that, as the Government are soon to finalise their plans, now is the time and opportune moment to consider not just the best of the Williams-Shapps proposals but radical change.

The first test of this iteration of the Government’s plans has come with the recently announced SoFA—statement of funds available—for control period 7, which is £44 billion. That is a huge sum of money, but it is £4 billion less than the amount given for control period 6. That partly reflects the fact that, while Network Rail has excellent leadership at the top, all too often there are layers of permafrost that stifle initiative, do not give clear prioritisation to investment plans and do not get them delivered. In some cases, they have prioritised engineering over the customer. I reiterate that if this money is to be used sensibly, as I will say in a few minutes’ time, it is absolutely clear that the future plans for this industry must have well-defined, accountable plans for investment.

I have also looked at the HLOS—the high-level output specification—which was even more revealing, probably for what it did not say as much as what it did say. I saw no reference in the HLOS to either the rail review or Great British Railways. Although I accept that I may well be overinterpreting the HLOS, the optimist in me thinks that that means that the Government are actually signalling that they intend to revise their proposals.

Disappointingly, there was no reference to encouraging the participation of the private sector in the development of projects nor in the financing or funding of specific projects, despite that being one of the core suggestions that the transition team works on as it moves from the old system to the new. In response to the point about connectivity made by the hon. Member for Strangford (Jim Shannon), I accept that paragraph 24 of the HLOS refers to engaging with regional transport authorities, but I believe that local, regional and national schemes are all equally important. I hope the Minister will confirm that that was an error of omission rather than intent.