BBC On The Record - Broadcast: 01.12.02

Film: Martin Popplewell reveals growing concern amongst Labour MPs at the state of the railways and increasing calls for the reform of the train operating companies.

MARTIN POPPLEWELL: Even if like me you were born long after the end of the golden era of Britain's trains, you've probably have a rather romantic notion of what it was all like then. The trains ran on time, you could afford to buy a ticket, you have no awful memories of terrible crashes and of course there were no leaves on the line. How things have changed. Despite a massive injection of cash, many problems remain on Britain's railways. Some in the Labour Party feel they were given the benefit of the doubt at the last General Election to improve things. Equally they fear if they don't improve them by the next General Election, in many constituencies, they could be derailed. CLIVE EFFORD MP: In '97 those people who were using networks such as these North Kent lines, it was certainly a very big issue in how they voted because on a daily basis they were suffering delays and cancelled trains. Now there was high expectation when the new Labour Government came in but people accepted that there were other issues. So leading on into the 2001 Election transport still wasn't a high priority for people and the economy was running well. But people are becoming increasingly agitated about the constant cancellations and delays on the rail network and I think you know transport is becoming a very important electoral factor and it's one that we need to address through the course of this Parliament. GWYNETH DUNWOODY MP: I don't think people realise the extent of the difficulties in the rail industry at the present time. There's a kind of melt down going on, firstly because Railtrack had to be taken over, there was no choice. But over and above that we now have a number of train operating companies that are being paid as management companies, just to run existing franchises, because there are so many severe problems. Now that was not a situation that was envisaged when the railway was privatised but it is an immediate and difficult economic problem. POPPLEWELL: There's nothing new about train crashes. But a series of accidents after privatisation including Ladbroke Grove, Hatfield and Potters Bar killed many and severally knocked public confidence in the trains. Some of the accidents were blamed on poor maintenance of the track and signals which were owned by Railtrack. The Government delighted many of its own MPs by effectively re-nationalising the company and replacing it with Network Rail. The move didn't surprise the man who masterminded rail privatisation. LORD PARKINSON: I have no doubt in my own mind that from the day that Mr Prescott arrived in his ministerial office he was determined to skewer Railtrack. He hated the privatisation, there's a story about him beating the table and saying at one of the early meetings: "I want my railways back!". I don't know whether that's true or not but I can well imagine that it is. And he just set out, he was hugely hostile to Railtrack from day one, they exploited Railtrack's problems and they set out to undermine it and they succeeded. POPPLEWELL: Now that Railtrack has gone - it's just the trains which are run by the private sector. Twenty-five companies have contracts or franchises lasting between five and twenty years to operate services between different cities and in different regions of the country. They're called train operating companies or TOCs. One of the aims of rail privatisation is to create a market place for passengers. The idea was that just as you have a choice of different airlines to travel to a major airport, so you'd have a choice of different train companies to go to a station. The best train companies would win more passengers and would thrive. The trouble is though is that for many stations, York included, that kind of competition just hasn't arrived. Even the man who represents the train operating companies concedes that competition on the railways hasn't happened. CHRISTOPHER GARNETT: The issue of competition on the railways is not what it's about. It is competition with the car and on routes such as GNER it is competition with the aeroplane. That is where the real competition lies. Rail has seven/eight per cent of the passenger market, the challenge for us is to get people out of their cars and on to trains. POPPLEWELL: Opponents of rail privatisation say the only type of competition which it has introduced is competition in the employment market. They say that drivers and other train staff who work for different companies but do exactly the same job are paid widely different rates of pay. This has led to a long running dispute, with more strikes planned between now and Christmas across the North of England and Wales. BOB CROWE: In the canteens and mess rooms that train drivers and guards sit in, you've probably got something in the region of nine or ten different companies, working alongside each other, all on different rates of pay, all on different conditions and that leads to bitterness, it leads to jealousy, it leads to resentment and ultimately, it leads to pressure on the trade union and that pressure in my belief, will mean more strikes in the railway network. GARNETT: There is not a great differential of pay between different types of companies. The Intercity train operators roughly all pay a similar amount. The London Commuter TOCs roughly pay a similar amount and the Regional train companies roughly pay a similar amount. But they are different jobs in different environments. A driver driving our train at a hundred and twenty-five miles an hour with five hundred people on board deserves a higher rate of pay than drivers working elsewhere. I don't have a problem about that, I think that that is right. POPPLEWELL: Competition for staff and the resulting higher salaries is just one of the reasons why some of the train companies have run into difficulties. Since privatisation taxpayers have had to hand over an extra two hundred and fifty-four million pounds to keep the train companies afloat. CHRISTIAN WOLMAR: I mean the whole nature of franchising has been a complete failure because those franchises that have done well have pocketed the money and said thank you very much. Those that have done badly have basically gone back to the government and said please, please can we have some more money because we've run out of money because we over estimated how we could cut costs, or we haven't had enough passengers or we've been affected by strikes or affected by the Hatfield rail accident, whatever the excuse they've asked for more money. And on every occasion they've got it. GARNETT: I think the train companies have done a really good job since privatisation. The train companies nowadays receive a billion pounds a year less in subsidy than they did at the start, we up to Hatfield were carrying thirty-five per cent more passengers and running twenty-five per cent more trains. POPPLEWELL: The train regulator the Strategic Rail Authority - or SRA - is responsible with the Secretary of State for Transport for granting the franchises to the train operating companies. Ironically, critics have questioned much of the strategy of the Strategic Rail Authority. But the SRA defends giving the privately owned train companies so much taxpayers' money. RICHARD BOWKER: At the time of privatisation which I think most people would now accept in many ways was a botched privatisation, mistakes were made when the franchisees were led in terms of how much they would cost, bidding was probably too aggressive, the cost base has gone up quite significantly over the last five or six years and frankly whoever had been the franchisee in these companies in virtually all cases, additional funding would have been required. POPPLEWELL: Mallard is the fastest steam locomotive here at the National Railway Museum in York. When this locomotive was built Britain's railway system was divided up into a number of regional privately owned companies. Unlike today's train operating companies they owned the track as well as the rolling stock. This is known as an integrated system and some people think it's the best way to run trains. WOLMAR: There is only one sensible way to run a railway and that's been proved the world over because all the countries that have tried to break up the railway into an infrastructure company and into franchises have found that it hasn't really worked. The only way to run a railway is to have an integrated railway, that is to have one company which is in charge of the whole operation. LORD PARKINSON: Alastair Darling is probably sensible enough to realise he's better off as he is, the last thing he would want on his hands I would suspect is another nationalised railway, a wholly re-nationalised railway with aggressive trade unions, pressure on government because the workers would know that the company couldn't go bust, the union at the end of the day would have to bail it out. POPPLEWELL: But many of the franchises expire next year. The SRA thinks this is an opportunity for it to improve the way the train operating companies are run and get tougher with those companies that don't deliver. BOWKER: We have in terms of removing franchises, we have looked extensively over a number of them over the last couple of years, the decisions that we've taken have always been to continue with the businesses but as I say, in terms of looking at the new franchise model going forward I want a position where franchisees are very clear about their obligations, very clear about the responsibilities, there is an effective process and if they don't deliver the ultimate sanction is that they will lose their franchise. POPPLEWELL: But many in the Labour Party are not convinced. They're stoking up the pressure on the government, signalling they want more profound changes to Britain's railways. EFFORD: My gut instinct is for a not for profit company because I think that the idea that when we have services as poor as we do at times on our on our railways and they have improved, I mean we have to accept that there have been improvements. But when we do have services that fail, at the end of the day it is the government that people hold responsible. WOLMAR: If you'd have asked me two years ago could you start bringing the railway back into the government's hands I might have said oh that sounds a bit difficult, in fact Stephen Byers re-nationalised Railtrack, I mean the government don't admit that but effectively he re-nationalised Railtrack, he completely changed the structure of the privatised railway. So anything can happen in the next three or four years. I think if this new way of franchising doesn't work then we can look to you know a third model of privatisation or even a virtual complete re-nationalisation although they'll never quite call it that. DUNWOODY: You begin to ask yourself is this worth the tax payers' while. Would it not be better to simply cut out many of these people and run an integrated service, it wouldn't cost any more and although you'd have to solve out immediate problems I'm afraid that there are people who see us getting to that situation very quickly. Are we getting value for money? - I'm not sure. Do we think there's another way of doing it? - I think there may be. Is the government prepared to envisage that at the moment? - no. Is it going to be forced to in the future? - quite possibly. POPPLEWELL: Whatever the final destination is for the train operating companies - the continuing problems with Britain's railways will keep them high on the political agenda until the next General Election. If improvements in the service don't arrive on time, Labour politicians fear it will have an impact on their party's electoral fortunes.
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.