Rail 2020: my thoughts on the Transport Select Committee report

The Transport Select Committee have now published their report on their investigation into the railways and a vision for 2020.  You can read it here http://www.publications.parliament.uk/pa/cm201213/cmselect/cmtran/329/329.pdf

I have had a quick flick through it and there is some real substance and some strong potential hidden within it that needs to be drawn out.  We always have to accept that it will be reported and spun in certain ways for certain audiences but the TSC has taken its usual approach of consensual rather than strongly ideological and focused on the problem set in the remit which is to be commended but which should also give this TSC report more clout rather than just being dismissed quickly and without proper attention.

Firstly, I want to highlight one important quote on my favoured topic and policy rule: “We believe that there are justifiable economic, social and environmental reasons for subsidising the railway “.  The fundamental role of transport is to facilitate/enable/support al other aspects of our daily lives and of a large number of wider policy goals and objectives.  This point must always be hammered home at every opportunity and I am really pleased the TSC continue to do so.

Secondly, the TSC have also drawn out the debate over subsidising the railways.  This really leads from the point above – given the fundamental role of railways, and indeed public transport generally, it is vital that we treat them as a public service providing a public good and that they therefore need public support ie subsidy.  Subsidy means taxpayer support from all of society rather than hammering solely fare payers.

Why should we?

Because of those wider policy goals.  By making greater use of public transport/mass transit we actually support a number of other policy objectives and these then create economic benefit that pays back for that capital investment into transport and the subsidy used.  As a simple example, taxpayer money builds an improved urban rail network with more capacity/trains that is reliable and attractively priced.  More people use it which allows the existing road network to become more focused on wider use for pedestrians and cyclists.  This makes those roads and areas more attractive for retail and business as well as creating public health improvements through walking and cycling as well as environmental and pollution and congestion benefits; these then bring knock on economic benefits through greater business rates, job creation, investment and development, saved costs to the NHS and improved quality of life and place.

Back to the TSC – a vital point about subsidy is not just that we need the philosophical debate but we need much greater transparency as to actual cost and what benefits it brings.  Fair point, well made.

I think that we need to appreciate the context.  Total rail journeys have doubled in the last 17 years, a number of interests will say this is thanks to privatisation but in the same breath the subsidy to the railways has almost doubled as well during privatisation so there is a paradox there, especially given that profits are generated which is the incentive for private companies to operate in the sector and also given that the TSC have found that costs have increased as well as rail has become a victim of its own success and the McNulty review found a 40% efficiency gap in costs in British railways compared to their European counterparts.

In terms of franchising, the TSC doesn’t get fully stuck in as we await the imminent Brown review on that issue.  But they make clear that the DfT has lost too many staff and are lacking in expertise and experience which led to the franchising fiasco of last year.  There are 2 propositions put forward: the first is to create an arms length body to let and manage franchises, the second is for some decentralisation to local and regional bodies.  It would be fair to say that this is going to be a hot topic of 2013 anyway…

I am really pleased to see the TSC come out and say that commuters should not have a quasi-work tax of much higher fares to use the railways to get to work.  Using rail fares as a demand management mechanism is insane as it goes back to the earlier point that this will fail on supporting our wider policy objectives and brings into question the purpose of public transport if people are going to be priced off it rather than encouraged onto it!

The overriding theme is of complexity versus simplicity.  The railways are expensive, inefficient and unnecessarily complicated.  But this is like many things in life – by making something complex and hard for outsiders to understand you can make things more costly, much in the vein of say the legal system.  The way the railways are run, the way that fares and ticketing is done, the organisation of routes, of information, of operations must be dramatically simplified.

My point at the start was that if we draw out what the TSC is saying and then follow their points to their conclusions, it is that we need more action to be taken.  That the symptoms we are all unhappy about ie the cost of travelling by train has a root cause much further up the line than merely the Coalition view of rail fares as being set at RPI+1 for now.  We need to go back to first principles of what the railways are for, what they can achieve in terms of wider policy goals and then do a fundamental redesign to focus on best value and maximum effectiveness and efficiency.  But for this to happen we need some brave politicians (and I am looking at the TSC amongst others) to take this report on to the next level and make that case.

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