BBC On The Record - Broadcast: 20.01.02

Film: PAUL WILENIUS Reports on the problems facing the railway industry and the risks facing the Government if passengers don't see improvements soon.

PAUL WILENIUS: Labour promised a new golden age for rail. But five years on, we're still waiting. John Prescott took a gamble on Railtrack, and lost. Now everybody's looking to Stephen Byers to get on with the job and get the trains moving. SIR ALASTAIR MORTON: Saying that we're going to make the railways feel better by just operating them with more zest and enthusiasm in the next few years and a lick of paint and a bit of expenditure there, is not going to achieve any more than John Prescott's exhortations achieved frankly, they need investment. GEORGE COX: The question is the delivery, at the moment so much in terms of our national infrastructure is not being put right and people haven't got confidence that the government knows how to implement the things it wants to do. WILENIUS: Tony Blair has a new top priority. To put Britain's crumbling rail system back on the tracks. This is putting enormous pressure on Transport Secretary Stephen Byers , to find a replacement for Railtrack , but also to decide the fate of plans to partly privatise London Underground. But government policy is facing the same blight that has dogged trains in recent years - delays, delays, delays. Paul Gentleman, co-founder of the Better Rail Action Group, knows a lot about delays. He's an advertising executive, and has been travelling from Swindon to London every day on the train for eight years, at a cost of more than five-thousand pounds a year. Following disasters like Hatfield, many rail users are increasingly fed up with the state of the rail network. And now he says his protest group is gaining momentum, and the backing of a new breed of middle class militants. PAUL GENTLEMAN: We are approaching journey times now which are longer than they were in Victorian times - why is that? The passengers want to know. And that's the frustration behind the passengers. That's why our group's really come about. The March 1st boycott has been brought about because enough is enough now. We've put up with this for long enough. What we want is the general commuter rail travelling public to boycott the rail network for a day, we've got eighty-five per cent public support with that and I think it will be bigger than the fuel tax protest. PAUL WILENIUS: But patching up the crumbling rail system isn't enough. Last week the Strategic Rail Authority unveiled a ten-year year plan to pump thirty-three-point-five billion pounds of public money into the aging system, with a similar amount coming from the private sector. Many industry experts say it's not enough. MORTON: The government is now accepting to a degree it was denying last Spring that the railway situation is dire and that there's a lot to be done and Stephen Byers talks of tough decisions, well the really tough decision to be taken is to accept that a lot of money has to be invested, not just spent annually on maintenance but invested in improvement and development of the railways if we are to have a network that is safer, bigger and better, which is what we're all asking for. WILENIUS: Many in the City and business believe the government's current plans to help rail passengers are fatally flawed, because they rely on private investment. They say that won't be possible without a big increase in the income the industry gets either from fares or government subsidy. It'll be even harder winning back the trust of the private sector after killing off Railtrack. MORTON: Frankly the private sector doesn't finance uncertainty except in return for a significant payment, it charges for risk, and if the risk at any point becomes too large or too uncertain, it simply says, hold on I don't think we will do this until things become clearer. I think that we're in that situation right now, the private sector is simply saying what is the future structure we're being asked to fund, until we know a lot more about it and its sources of income we can't do it. COX: Now before I put my money in I'm now looking for some reassurance. So there will be a risk premium on this and I don't think it's just with Railtrack I think this now applies to any government project that you want the private sector to be involved in. WILENIUS: And in the short term the government's critics say that their action over Railtrack is making the situation even worse, not better. THERESA MAY MP: Things are not improving since Stephen Byers put Railtrack into administration, in fact they're getting worse. Passengers have seen something like an overall forty-five per cent increase in train delays since Railtrack was put into administration and of course there are an awful lot of demoralised staff in Railtrack because over ninety per cent of employees held shares, they've seen the value of those shares wiped, wiped out by what Stephen Byers did, for some of them they were their life savings, and they're feeling pretty sore about the action that the government took. WILENIUS: Guiding Railtrack out of administration and back into some new form will be Stephen Byers greatest test. Easing it into a 'not for profit' company, seems the preferred route. But many Labour MPs feel that the right direction is to go for renationalisation. JANE GRIFFITHS MP: 'Not for profit' for Railtrack wouldn't really be my personal preference, what would be my personal preference, and it could include 'not for profit' for Railtrack, is to say we must have public control of all our transport infrastructure. We must have sticks to beat train companies with and the successor to Railtrack and whoever else is involved but we must have ways not just to shout at transport operators but to be in partnership in a way where they have to listen. WILENIUS: Some industry experts are also worried that unless it has a government guarantee a 'not for profit' company would not have the financial clout to get the railways back up to full speed. MORTON: If the government is willing to guarantee the debts of the new Railtrack, whatever it is, then there's no problem - that's a triple-A credit and it can raise plenty of money but that's actually a new nationalised entity, why not say so. If however the company is not going to have a, enjoy a government guarantee for its debts then it's got to earn enough profit to accumulate enough reserve quickly enough and certainly enough, and that's the important point, certainly enough to convince lenders that they will get their interest and they will get their repayment. They're not in the charity business. WILENIUS: But no matter which route the government chooses, one thing's certain, there'll be more delays. It may take almost two years to get the new company up and running. MAY: When the plug was pulled on Railtrack the government said it would only be in administration for three to six months. We're well over three months down the line now and there's no sign of it being brought out of administration. I fear that it's going to be in administration 'til the end of this year - indeed there some commentators who say it could be well into two-thousand-and-three before the company comes out of administration. WILENIUS: Richard Branson's Virgin Trains is investing hundreds of millions of pounds in new trains and rolling stock. But it is only one of twenty-five train operating companies. Some business leaders believe it's this fragmentation of the railways, not the question of ownership that's the real problem. COX: One of the problems with the whole rail scene is not privatisation but the way it was done, overly fragmented. You've got the track separated from the operating companies, the maintenance separated from the track, the sub-contractors for maintenance separated from maintenance. You're spending all your time negotiating with other parties involved, your profit concerns is concerned with those negotiations not with serving the customer. So the whole thing needs a much greater degree of integration and a much simpler structure than we're going for at present, and I don't see at present any plans to change that. WILENIUS: And it's that fragmentation of the railways which many people blame for the rash of strikes now facing rail travellers all over the country. There'll be more this week, as guards and station staff fight for pay rises to catch up with train drivers. And there's a growing threat of even more misery to come, as union leaders are forecasting walkouts in the coming weeks and months. BOB CROW: So there's a real reality out there that more action could take place directly as a result of the fragmentation of the industry because different people being paid different pay and conditions leads to resentment, leads to jealousy and it leads to pressure being put on our trade union to make sure that we get the same for all members who do the same job. I think there's a real possibility this will continue spiralling and, could spiral out of control unless some action is taken very quickly. WILENIUS: Stephen Byers has taken pride in his action over Railtrack, as many Labour MPs see it as rolling back a key part of the Thatcherite legacy of privatisation. But many people are waiting to see if he will go further, and kill off the long awaited plan to partly privatise the London tube. GAVIN STRANG MP: I personally hope that the PPP as it's called for London Underground will not go ahead, I do believe that the arrangements are too complex. I hope that Stephen Byers, and he's indicated this as a real possibility, will in fact abandon the whole, the whole approach. WILENIUS: London's tube system is straining at the seams. The government wants to bring in a new partnership to feed a potential thirteen billion pounds of public and private investment into the rundown system. But the scheme is still delayed and now Stephen Byers is waiting for a report early next month on whether it's value for money. But there are many who feel it would be a disaster if the plan went ahead as it is. KEN LIVINGSTONE MP: Looked at objectively no-one in their right mind would go ahead given the contract's got a rate of return of thirty-five per cent and it replicates exactly the same problems that we saw at Hatfield, with the loss of life we saw at Hatfield, by separating the running of the trains from the maintenance of the track. Everybody already who has looked at this has already come to the conclusion, every independent expert and assessment has been this is not value for money, that the scheme should be dropped. The only organisations that have ever said the PPP's a good idea are those employed by the government to say so. WILENIUS: There's a lot at stake for the government, as Stephen Byers wrestles with the future of Britain's railways. He's already admitted that Labour will be judged at the next election on improvements in rail services. But many political figures believe that unless things start getting better soon, that judgement may not be to their liking. The views of angry commuters are being taken seriously by the Transport Secretary. Last Wednesday Paul Gentlemen arrived at Westminster for a meeting where he presented his group's proposals to improve rail services to Stephen Byers. WILENIUS: How did it go? GENTLEMAN: It was very constructive. He listened intently to what we've got to say, and he's gonna take into consideration the ten-point plan that we've put to him. WILENIUS: And what happens with the protest planned for March 1st? GENTLEMAN: We've stated that we wish to call the protest off, but only if our ten-point plan is met. That hasn't been met yet, so the protest goes ahead. GRIFFITHS: I think it's got to be at least be seen for there to be progress by the time of the next election, we've got to see better railways, we've got to see more investment, and it doesn't just have to be put in, people have to know that it's there and feel the difference when they make their journeys otherwise we'll be in trouble. STRANG: If in fact we fail to make progress in the transport field and in particular, if we fail to begin to show real benefits in the rail system then the electorate can easily turn on us. WILENIUS: So further delays to planned improvements for the railways and London tube could be politically dangerous, as rail passengers are also voters and Tony Blair knows how important they could be. LIVINGSTONE: There will be no visible improvement on the Underground at the time of the next mayoral election if the PPP is imposed. And there most probably won't be any at the time of the next general election and there'll be huge political consequences for the government if people are still travelling in the present conditions when they all come up for election in, in three or four years. I think if PPP goes ahead you could see perhaps ten or a dozen Labour MPs lose their seats in London. WILENIUS: So the political stakes are high. The government is under growing pressure from the travelling public to show it has the vision and the ability to find a route out of this crisis. MORTON: Stephen Byers has said enough of vision, let's get on with the job. There's a problem, this government like many governments before it, doesn't think long term, railways are a long term problem, hospitals probably are as well but railways certainly are. COX: I think Stephen Byers has got a problem of restoring confidence and credibility, I don't know of anyone who's saying at present well at least Stephen Byers has got it in hand. WILENIUS: For many weary rail passengers the government's plans are too little, too late. So Stephen Byers will have his work cut out to find the right course quickly, if the railways are ever going to have a new golden age.
NB. This transcript was typed from a transcription unit recording and not copied from an original script. Because of the possibility of mis-hearing and the difficulty, in some cases, of identifying individual speakers, the BBC cannot vouch for its accuracy.