Grant Shapps says rail overhaul WON’T ‘instantly’ reduce ticket prices
Has the Great British Rail revolution already hit the buffers? Grant Shapps admits ticket prices could RISE as unions warn reforms ‘paper over the cracks’ and Trainline shares drop by 33% after government unveiled biggest overhaul in decades
- New public body to oversee key areas of the railways to be set up and called Great British Railways (GBR)
- It will replace Network Rail to operate 20,000 miles of track, signals and tunnels across the UK by 2023
- GBR will set most fares and timetables, sell tickets and issue contracts to private firms to run the trains
- Flexible season tickets will offer savings on routes for those who travel to work two or three times a week
Transport Secretary Grant Shapps today admitted the price of train tickets could rise as he revealed the biggest overhaul of Britain’s railways since privatisation almost three decades ago.
Mr Shapps said the Government would have to ‘weigh up’ how the taxpayer had plugged a £12billion hole during the coronavirus crisis to keep the railways operating and pointed out that fares were subsidised.
Rail union leaders and politicians have attacked the sweeping plans to reform the system, accusing the Government of merely ‘papering over the cracks’, while Labour said it raised more questions than answers.
One campaign group accused ministers of ‘rearranging deckchairs on the Titanic’, while a union crucified a ‘missed opportunity by the Government to make a clean break from the failures of the past’.
A new public body to oversee key areas of the railways will be set up, with Great British Railways (GBR) replacing Network Rail to operate 20,000 miles of track, signals and tunnels across the country by 2023.
GBR will have additional powers to set most fares and timetables, sell tickets and issue contracts to private firms to run the trains themselves, under plans revealed in a White Paper today.
Many reforms will be brought before the body is launched, with flexible season tickets being introduced to offer savings of up to £300 a year on certain routes for people who travel to work two or three times a week.
These will go on sale on June 21 for use seven days later, and the Department for Transport said there will also be a ‘significant rollout’ of more pay-as-you-go, contactless and digital ticketing on smartphones.
But the shares of UK ticket provider Trainline, which sells 70 per cent of all digital fares, crashed by 33 per cent this morning amid planes for GBR to sell fares. By 10.30am, share were still down by 24 per cent on the day.
The move was welcomed by passenger watchdog Transport Focus because it moves ‘towards a more accountable and joined-up railway’, while the Rail Delivery Group said flexible tickets were ‘good news for passengers’.
Among the changes announced in the reforms today are:
- A new flexible season ticket for two or three-day-a-week commuters, for eight days within a 28-day period;
- Great British Railways will be able to force timetable changes through and set fares, rather than rail operators;
- Franchise model where private firms bid for contracts will be ditched and replaced with ‘concession’ system;
- Rail firms will receive a fixed fee for running services but can lose some of this if they fail on punctually;
- Contactless pay-as-you-go train travel, like London’s Oyster system, to be rolled out in all towns and cities.
Three years to the day that the infamous May 2018 timetable changes caused chaos across the network, Mr Shapps was asked if ticket prices could rise, and said: ‘We might as well have a grown-up conversation about it.’
He told BBC Radio 4: ‘There is a balance between the fact that the taxpayer has plugged a hole of £12billion during the coronavirus to keep our railway afloat and the fact that people who use the railway are already subsidised by the wider taxpaying public. Of course, any government in the future will have to weigh those things up.’
Transport Secretary Grant Shapps (at Leeds station in January 2020) said there would be ‘no instant changes’ to ticket prices
Commuters walk through London Waterloo train station yesterday morning ahead of the UK train reforms being announced
People walk through London Waterloo railway station during the morning rush hour yesterday before the reforms emerged
The shares of ticket provider Trainline, which sells 70 per cent of all digital fares, crashed by 33 per cent this morning
Today, Mr Shapps was asked whether the cost of a ticket from Manchester to Birmingham would be cheaper under the new system, and said: ‘There’ll be no instant changes, this is going to take some time to come in.’
Pressed again on whether a ticket should be cheaper, he told the BBC: ‘My instinct is, of course, as a commuter I would love all train tickets to be cheaper.’
But he added that ‘any government has to make the very legitimate play-off between ‘should people who don’t use the railways be subsidising people who do and to what extent?’ and we are always trying and get that balance right’.
Asked if fares were bound to increase as a result of the reforms, he said: ‘No, is the answer.’ He told BBC Radio 4’s Today it would be a ‘more efficient railway’ as a result of having a single organisation in charge and the formula for setting regulated fares will not change.
But asked if he could promise that fares would not rise higher than inflation he said: ‘I’m not here to give guarantees for years to come.’
Mr Shapps said there was ‘absolutely not’ a ‘hidden agenda’ but pointed out that the taxpayer had plugged a £12billion hole during the coronavirus crisis to keep the railways operating and fares were subsidised.
In a statement to the House of Commons today, Mr Shapps told MPs: ‘This is not renationalisation, which this Government continues to believes failed the railways – rather it is a simplification.
‘While Great British Railways acts as the guiding mind to co-ordinate the whole network, our plan will see greater involvement of the private sector. Private companies will be contracted to run the trains and services, and fares will be set by Great British Railways.
‘But it’ll work more like London buses and London Overground – delivered by private companies but branded as a single national service.’
But shadow transport secretary Jim McMahon said: ‘While I welcome steps to increase public ownership and control over the railways, as you’d expect, it doesn’t go far enough in this current plan.
‘I believe there is ample proof that demonstrates that fuller public ownership rather than a concessionary model would better serve the state, the public and long-term investment.’
And Manuel Cortes, leader of the Transport Salaried Staffs Association, said: ‘The Conservatives have admitted that their Frankenstein privatisation experiment on our railways has failed and the franchising of train services has hit the buffers.
‘Rather than take the bold action that our rail network desperately needs, this is an attempt merely to paper over the cracks.
‘A concessions-based model will still see passengers and taxpayer money leak out of our industry in the form of dividend payments for the greedy shareholders of the private operators who will hold them.
‘In some ways we are going back to the future with the creation of a strategic body for our railways. We used to have one called the Strategic Rail Authority and it was abolished because it failed to end fragmentation.’
Mick Whelan, leader of the train drivers’ union Aslef, added: ‘It is deeply disappointing that we have had to wait 18 months for the publication of a report which was finished in November 2019.
‘We welcome the belated admission that the privatisation of our railways by John Major’s Tory government in 1994 has been an abject failure. Everyone is delighted to see the back of the franchise system.
People walk through London Waterloo railway station during the morning rush hour yesterday as they travel to work
Commuters are pictured at London Waterloo railway station yesterday morning during the rush hour
People get off a South Western Railway train at London Waterloo train station during the morning rush hour yesterday
South Western Railway trains are pictured on the platforms at London Waterloo railway station during rush hour yesterday
Commuters walk through London Waterloo railway station during the morning rush hour in the capital yesterday
‘The big question is why are private operators still involved? Under these plans the private companies will still pocket a profit, but all the risk is being dumped back on the public purse. The Government is changing the model, but protecting the privateers, and privatising any profit.’
And Mick Lynch, leader of the Rail, Maritime and Transport union, said: ‘This is a missed opportunity by the Government to make a clean break from the failures of the past that have left Britain’s railways in the slow lane.
‘The Government talks about ending a generation of fragmentation but then leaves the same private companies in place under this arrangement to extract management fees that could be invested in to building a truly integrated national rail network.
‘If the Government was serious about recognising the impact of failed rail policy it would cut out the middleman, strip away the dead weight of the private companies and work with their staff on building a transport system fit for the future where investment in staff and infrastructure comes first.’
Robert Nisbet, director of nations and regions for industry body the Rail Delivery Group, also said the reforms did not go far enough.
He told ITV’s Good Morning Britain: ‘We would much rather see the bonnet opened and the whole system be tinkered with so it really does benefit the passengers.
‘Because it’s not just the people on the trains, it’s about the economic recovery of Britain. That’s what really matters, and if you get the railways right, that should help Britain as it comes out of the pandemic.’
Earlier today, Mr McMahon, the shadow transport secretary, said: ‘Nearly three years after it was commissioned, this report raises more questions than it answers.
‘With fare hikes, £1billion cuts to Network Rail and broken promises to communities across the country, it’s yet another example of ministers talking a good game with very little substance underneath.
‘A lack of proper detail on flexible tickets and whether it will make travel cheaper for the average commuter renders it meaningless for millions and completely fails to meet the scale of challenge required to encourage people back onto the rail network post-pandemic.’
Johnbosco Nwogbo, campaigns officer at campaign group We Own It, said: ‘The Government has somehow managed to run a three-year review into our railways – billed as the ‘biggest shake-up’ – and yet come out of it proposing no meaningful change.
‘The reality is that the Government’s proposals are merely rearranging deckchairs on the Titanic – the changes are cosmetic.’
A man walks past a bicycle point at London Waterloo railway station during the morning rush hour yesterday
Commuters walk through London Waterloo railway station during the rush hour on Wednesday morning
People travel through Waterloo railway station during rush hour yesterday as coronavirus restrictions continue to ease
People walk along a platform at London Waterloo after arriving at the railway station during the morning rush hour yesterday
But Mr Shapps said the creation of a new public sector body will simplify a system that is ‘too complicated’. GBR will absorb Network Rail in a bid to end what the Department for Transport (DfT) branded a ‘blame-game system’ between train and track operations when disruption occurs.
Mr Shapps said during the 2018 timetable fiasco there was no ‘Fat Controller’ in charge of the system, referencing the Thomas The Tank Engine stories.
He told Sky News: ‘It’s just too complicated. But I don’t want to go back to the days of British Rail either. We had declining passenger numbers and railway stations closed.
‘This will be still with the involvement of the private sector, running the concessions, running the actual trains, but they get paid for running those trains on time, keeping them tidy and clean, and it will be a single organisation selling you the tickets and running the timetable.’
He also sweeping reforms to the running of the railways will end a ‘ludicrous’ situation where hundreds of officials are involved in working out who is to blame for delays.
Mr Shapps said 400 people had to debate the issues, with one case revolving around a dispute over the size of a pheasant. Under the rules at the time, delays from hitting a large bird were the responsibility of Network Rail but striking a smaller one would have been the fault of the train operator.
Mr Shapps said that would mean ‘when things go wrong’ there is a ‘fat controller’ figure running the network. ‘By having that kind of set-up it means you get rid of – in the case of the current set-up – 400 people who have to debate and work out whose fault a delay is at the moment,’ he told the BBC.
The Williams-Shapps review said Network Rail and the train companies employ hundreds of ‘train delay attributors’, to argue with each other about whose fault a delay is.
‘Whilst this plays an important role in measuring performance across track and train, it is symptomatic of a misaligned focus on blame, rather than solutions,’ the report said.
‘Around 40 per cent of delays are disputed, representing significant sums of money, and as a result are debated over through an extensive escalation process, 199-page principles and rules document and an adjudication process overseen by an independently-chaired panel.
June 2018: Commuters pack out London Waterloo station when rail services faced major disruption after a fire under a train
October 2018: Passengers crowd London Victoria station after Southeastern services were cancelled due to a power failure
January 2017: Commuters attempt to board a full South West Trains carriage at Clapham Junction station during strike action
‘Previous adjudications include, among other things, who was responsible for a train being so crowded that a passenger fainted, causing delays while they were taken off; and whether a pheasant is a small bird (in which case, according to the principles at the time, the train operator was to blame for a delay caused by hitting one) or a large bird (Network Rail’s problem).’
Mr Shapps said ‘you get into some ludicrous situations’ but under the new system ‘all that nonsense will go, we’ll have a single, simplified organisation running it’.
The Cabinet minister, who described himself as a commuter who wants ‘a railway that works’, added: ‘It’s a simplification which I think people will broadly welcome.’
He said: ‘I want ticketing to be straightforward and simple. It won’t be going back to the days of British Rail – with terrible sandwiches and all the rest of it – it will be a new organisation.’
Mr Shapps said he was ‘essentially a fed-up commuter who became Transport Secretary’ as he explained the reason for his rail reforms.
He told the BBC: ‘It’s three years actually to the week since we had that terrible May 2018 timetable meltdown when everyone looked around and no one could tell you who was responsible for it.
‘Great British Railways will be a single, simplified organisation running all of the ticketing, all of the network, bringing everything together – the timetable and the rest of it – under one roof, in order to make sure that people get the service they demand.’
The Williams-Shapps Plan for Rail has been published as a white paper.
It is based on the recommendations of a review of the industry carried out by former British Airways chief executive Keith Williams following the chaotic introduction of new timetables in May 2018.
The plan was initially due to be published in autumn 2019 but was delayed by the general election and the coronavirus pandemic.
Prime Minister Boris Johnson said: ‘I am a great believer in rail, but for too long passengers have not had the level of service they deserve.
‘By creating Great British Railways, and investing in the future of the network, this Government will deliver a rail system the country can be proud of.’
GBR is not expected to be established until 2023. Its logo will be an updated version of British Rail’s double arrow. It will be released at a later date.
Rail franchises were effectively ended when the Government took over the financial liabilities of operators in March 2020 to keep services running amid the collapse in demand caused by the coronavirus pandemic, at a cost of £12billion.
The emergency agreements will be replaced by passenger service contracts, with GBR contracting private firms to operate trains.
This concession model is similar to the one used for London Overground and Docklands Light Railway services by Transport for London.
The new body will specify most of the timetables and fares. Operators will be incentivised to run high-quality services and increase passenger numbers.Mr Williams commented: ‘Our plan is built around the passenger, with new contracts which prioritise excellent performance and better services, better value fares, and creating clear leadership and real accountability when things go wrong.
March 2015: Passengers at London Bridge station after thousands of travellers were stranded after a person was hit by a train
January 2002: Passengers wait for a train at Woking station in Surrey during a 48-hour strike on South West Trains by the RMT
December 1989: Passengers argue with British Rail ticket inspectors at London King’s Cross railway station
‘Our railway history – rich with Victorian pioneers and engineers, steam and coal, industry and ingenuity – demands a bright future.’
Anthony Smith, chief executive of passenger watchdog Transport Focus, said: ‘Passengers will welcome this move towards a more accountable and joined-up railway.
‘Ultimately what they will care about is whether rail is the best option for them, if it is reliable, efficient and good value.’
Andy Bagnall, director general of the Rail Delivery Group, representing train operators, said: ‘These proposals can deliver the biggest changes in a generation.
‘Getting the detail right will be crucial to ensuring that the white paper fulfils its potential to improve journeys, offer independent oversight and clear accountability, and create a new set of fares which are simpler and more value for money.
‘Flexible tickets for commuters and more pay-as-you-go are good news for passengers. To really maximise the benefits and make it easier for people to get good value fares requires government to go further and get under the bonnet to fix the engine of the fares system.’
The review was ordered in 2018 after the introduction of new rail schedules led to the meltdown of services that May.
An inquiry blamed several factors for the fiasco, including Network Rail not completing maintenance and infrastructure projects on time, poor preparation by rail firms and a lack of meaningful oversight by the Department for Transport.
British Rail was privatised in 1993, handing responsibility for infrastructure projects to Railtrack and then Network Rail. The running of services was passed to multiple companies who bid for contracts.
Although private companies will continue to run trains, today’s white paper aims to bring more elements regarding running the network back under one organisation.
Mark Smith, founder of the Seat 61 international rail website, tweeted today: ‘The new body needs to be arms-length, which also avoids politicising every tiny rail-related decision. Creating a new stand-alone organisation would require new legislation.
‘Setting it up it within Network Rail avoids this, plus there are synergies between train operations and infrastructure. And you’ve got the right people already in charge, Andrew Haines and Sir Peter Hendy. So this is the obvious sensible move to make at this stage.’
He added: ‘The key difference between Great British Railways and the former British Rail will be that BR used its own staff to run trains directly, GBR will outsource, using contracts to incentivise everything.
‘More standardisation, less fragmentation? Probably. Less innovation and no Chiltern-style investment as it all now needs to come from government? Possibly. We shall see.’
Commenting on the political impact of the reforms, public affairs expert Stuart Thompson, of BDB Pitmans, told MailOnline: ‘These are the Government’s plans to solve all the apparent failings of the rail system in one massive reforming sweep.
‘They are an implicit recognition of the failings of rail privatisation but with just enough remaining private sector involvement so they do not have to admit to renationalising the entire system.
‘But the proposed reform is also about raw politics and levelling up. The travelling public and politicians across the North have long complained about having a second or even third class railway compared with the South.
‘The Government can now show that it is taking action to change that. There is still though lots of engagement required by all those interested in having a say in the reforms. Plenty of detail has still to be decided.
‘The proposals have also taken away one of the truly popular policies of the Corbyn-era Labour Party. Rail nationalisation was supported by the public in large numbers. The Conservative Party have now removed that from Labour, making Keir Starmer’s job even more difficult.’
Rocio Concha, director of policy and advocacy at consumer champion Which?, said: ‘Before the pandemic, passengers had been treated as an afterthought for too long on the railways – so it is good that the government’s plans seek to improve the passenger experience on trains, bring innovation to the ticketing system and make it easier to get compensation.
‘The true test of this plan will be whether passengers see real improvements to the way their train services operate, not only adapting to new needs but addressing the old challenges that could cause so much disruption to the lives of those reliant on the railways.’
GBR, which will be a taxpayer-funded public body, will take on the responsibility of awarding rail contracts.
But the reforms are not a nationalising of the railways because services will still be run by privately run train companies which are awarded the contracts. There are more than 20 of these firms currently running the network.
Network Rail, which GBR will replace, is also a public body. But it simply owns and maintains national rail infrastructure, including the tracks, signals and tunnels.
GBR will continue to do all this but will have more powers, including responsibility for setting timetables.
Mr Shapps said: ‘Our railways were born and built to serve this country, to forge stronger connections between our communities and provide people with an affordable, reliable and rapid service.
‘Years of fragmentation, confusion and over-complication has seen that vision fade and passengers failed. That complicated and broken system ends today.’
What was the old British Rail like for passengers?
By HARRY HOWARD
British Rail was the state-owned firm which operated Britain’s railways from 1948 until 1997, when the process begun by Prime Minister John Major to privatise it was completed.
Before 1948 nationalisation, four large railway existed across the country
The gripes of modern rail travel in the UK are well-known: delays, lack of trains, high ticket prices.
February 1995: Passengers including Transport Minister Steven Norris on a train service from Stockport to London Euston
August 1994: Commuters who took the train arrive at London Paddington station this morning during a period of rail strikes
June 1993: Passengers crowd to board a British Rail Intercity train on a Network South East service
But before private firms took over, British Rail suffered from poor investment and the cutting of smaller secondary routes to save money.
Perhaps the most infamous symbol of train travel before privatisation was the British Rail sandwich, varieties of which were sold across the network.
Victorian novelist Anthony Trollope wrote as far back as 1869 that the ‘real disgrace of England is the railway sandwich’.
The corners of the sandwiches were known to curl up due to sitting under glass domes in dining cars for so long.
April 1989: Passengers queue for buses or taxis outside London Victoria station due to train strike action
June 1979: Passengers wait on a platform a British Rail Intercity 125 train during rush hour at an unknown location
1951: Passengers are served drinks on board a British Railways buffet restaurant car which was newly-built at the time
One worker recalls being instructed in the art of putting the least amount of butter possible on the bread used to make sandwiches.
But despite the notorious food, a 2012 poll showed that 70 per cent of voters wanted the railways to be re-nationalised.
A similar 2013 YouGov poll found that 66 per cent of the public support bringing the railways into public ownership.