South Western Railway Franchise

Vince Cable Excerpts

Wednesday 5th December 2018 Commons Chamber

[Sir Vince Cable (Twickenham) (LD)]

It is something of a relief to speak on a subject that is not Brexit, and is not even vaguely Brexit-related, though if there were a people’s vote, South Western Railway would not survive in its franchise very long.

Let me relay a little history. The south western region, which is the Wessex part of the south of England and the south-western suburbs, which I represent, had a little over two decades of South West Trains, which was owned by the company Stagecoach. I do not think that they were regarded with enormous affection, but they provided a workmanlike service, and certainly nothing that could be described as disastrous. Since the change in the franchise, which was announced in August last year, there has been a rapid deterioration. That is the matter on which I wish to speak.

SWR, or South Western Railway, has joined Southern, Northern and Thameslink at the bottom of the league tables on almost every measure of performance. That is of concern to the people who use the eight stations in the area that I represent in Parliament. But it is not just me; many other MPs in south-west London are concerned. My right hon. Friend the Member for Kingston and Surbiton (Sir Edward Davey) has established an all-party group that is doing detailed work on the problem and will, I hope, produce a report to enliven this discussion. The concern goes much wider than my constituency.

[Jim Shannon (Strangford) (DUP)]

It has been brought to my attention that the disabled access points on this line are not up to the standard expected by disabled charities and organisations. Does the right hon. Gentleman feel that the Minister should address the need for modern disabled access points that are technically updated and correct for those who are disabled?

[Sir Vince Cable]

That was not on my list of complaints, but I am sure we can add it.

The central concerns that people have are the following. First, there has been a marked deterioration in punctuality and reliability. The consumer group Transport Focus measures satisfaction with punctuality and reliability and it has sunk to 65%, which represents a 12% deterioration in the past year.

The second problem is the ability of the rail company to deal with major disruption. When there is somebody on the line or a points problem, we have been used to recovery within a reasonably short space of time. Now, the whole network is disabled for prolonged periods, due to the apparent inability of either Network Rail or South Western to deal with the problem.

The third problem is a strategy that I would call the concentration of misery. Whenever there is a serious disruption, the rail company has the choice of whether to spread it widely or concentrate it on one or two neglected branch lines. What is happening in practice is that some of the branch lines, including the so-called Shepperton line that runs through Fulwell and Hampton in my constituency, are particularly badly affected. The justification given to me by the company is that that affects fewer people, but the effect is that an already poor service becomes impossible. People are not able to get to work or to school and large numbers of cancellations take place. I had a message yesterday from a constituent who boarded a train and it was then announced that it would not stop at any of the announced stops, but would go straight to Waterloo. That kind of experience is commonplace.

There is then the issue of industrial action. I am reluctant to ascribe blame and I am sure that the rail unions have their share of responsibility, but for almost a quarter of a century we had virtually no industrial action in this part of London. It is now frequent and we have had eight major strikes since the change of franchise. Clearly there is a complete breakdown of communication between the employees and the employers.

Then there is the issue of the new timetable that we were promised. It is probably a source of relief that the company has not tried to put it into practice. We are still offered the old timetable, which the company finds extremely difficult to operate.

Last but not least, there is the promise of a 3% fare increase. That has led to probably the most serious and general complaint about the service: that it simply is not value for money. The surveys recently carried out by Transport Focus suggest that only 36% of passengers judge the service to be value for money, and I am sure that is deteriorating by the day.

[Ruth Cadbury (Brentford and Isleworth) (Lab)]

I thank the right hon. Gentleman, who is my constituency neighbour, for securing this important debate on a subject that also affects the thousands of people who use the six stations on South Western Railway’s Hounslow loop line—not only my constituents but the thousands who work at GSK, Sky and so on. I agree with him about the disruption to people’s working, daily and family lives, and I share the concern of the hon. Member for Strangford (Jim Shannon) about what the promise to remove the guarantee of a second person on the train means for people who are disabled. The situation needs looking at urgently.

[Sir Vince Cable]

I thank the hon. Lady for that additional information, which is germane and extremely useful.

There have been a couple of serious and authoritative reports by the Office of Rail and Road. Sir Michael Holden was invited to carry out a study, and he has actually run railways, so we think he can be trusted for technical judgment. The analysis that is now available suggests that the following are the main sources of disruption. The first is that the franchise itself was not properly conducted. The company overbid or, to put it another way, underbid for subsidy and is now financially stretched. It appears to be struggling to maintain payments to its financiers, and the consequence is that passenger welfare is being sacrificed and the promised investment is not materialising. There are serious questions for the Department and the Minister about to how the franchise was allowed to take place and result in a serious deterioration of standards. The Government have plenty of experience of refranchising, and why they were allowed to disrupt what was a perfectly serviceable arrangement with the previous franchisee is unclear.

[Sir Edward Davey (Kingston and Surbiton) (LD)]

My right hon. Friend is right to say that the all-party parliamentary group that I set up is looking at this matter in detail. We have a draft report called “Passengers must come first” which focuses, among many other things, on the fact that South Western Railway does not have the money to do what is right for passengers. It is looking after the investors first, and it is not putting money in to deliver on what it promised in the franchise. Unless the Government act, either by taking the franchise away from SWR or by imposing a new contract, passengers are going to keep suffering under shocking performance.

[Sir Vince Cable]

That is a helpful intervention that anticipates what I am now going to say. Many of the problems do originate with the franchise and the franchisee, but there is some shared responsibility with Network Rail, which of course is a nationalised industry. Network Rail’s failings have been exposed throughout the network, but they are particularly serious here, because the decision was made several years ago to switch the control centre from Waterloo to Basingstoke. As a result, many staff were shed, and a disconnect was established between the running of the trains and the running of the crews, so at least part of the disruption is attributable directly to Network Rail. I think the common consensus is that the nationalised company suffers seriously poor management and many failures, among which is the fact that Network Rail has not updated any of its contingency planning since 2011. It is important to accept that it is not just the franchisee that is responsible for the many failures.

An additional problem is the lack of integration between Network Rail and the franchisee. Under a previous dispensation, the two things were run together. It would probably have been better if the original rail privatisation had properly integrated the franchise and the network, but that was done informally in the south western area under the previous franchise, and it has now completely broken down. There appears to be no integration at all, minimal co-ordination and just an instinct for blaming each other.

The combination of those all factors has led to the serious situation that we have at present, and I would hope that the Government recognise that. To prevent the situation disintegrating to the point at which we have another Southern railway scandal, the Government might intervene now to prevent the situation slipping further. There are several actions they can take, and my right hon. Friend has just summarised them. In relation to the franchise, there are essentially two options, one of which is to take the franchise away and replace the existing company with another—preferably a public service company, but there is a variety of options—and the other is to impose on the franchise a set of performance-related measures so the company is paid only when it delivers on its undertakings.

There are various ways of dealing with this problem. Unlike the Labour party, I do not believe nationalising the franchisee would necessarily help, but we have to find a mechanism by which it can be properly held to account and rewarded for success, rather than rewarded for failure.

The second area of activity that is needed is within Network Rail itself. It is fortunate that Network Rail has just appointed Andrew Haines as its head. I dealt with him extensively when he ran South West Trains, and he is generally thought to be a good manager. Whether he can personally turn this around, I do not know, but it would greatly help if there were proper integration of Network Rail and the franchise in this section of the system. I would be grateful if the Minister could indicate how he can help achieve all of that.

There are clearly questions for the Department to answer, notably on the franchise, how it has allowed this to happen and the options available to it to turn the situation around. Although Network Rail is a free-standing operation, though nationalised, it would be useful to have some indication from the Government on how they can push it in the direction of better management and better attention to the serious problems in this region.

[Sir Edward Davey]

I am grateful to my right hon. Friend for giving way a second time.

The point on Network Rail is crucial. Like my right hon. Friend, I have a lot of time for Andrew Haines given our mutual experience of him. However, Network Rail will not be able to get to grips with the challenges of an extraordinarily high level of emergency speed restrictions and temporary speed restrictions across the network. A decade or so ago, there were zero speed restrictions; now there are 70 or 80, which is because of the lack of essential investment. Unless the Department for Transport supports Network Rail with more cash to solve those restrictions, we will get nowhere near the level of timetable resilience that will prevent cancellations and delays, meaning that people’s trains actually run on time.

[Sir Vince Cable]

My right hon. Friend is absolutely right, and he leads me to my concluding point on the role of the Department itself.

The national rail review is looking at overall performance, and I hope it is able to look at the role of the Department and not just of the rail companies, but there is the additional and crucial point, as my right hon. Friend has just said, that a lot of this depends on available investment. Some of that, of course, has to come from the franchise company, but Network Rail ultimately depends on the willingness of the Treasury and the Department for Transport to make capital spending available in light of what is necessary.