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Any other business

The state of the railways

A growth industry, despite all efforts

15 April 2009

12:00 AM

15 April 2009

12:00 AM

The Treasury thought the railways were in terminal decline. John Major’s government thought they were a political nuisance — vexed commuters meant lost voters. Privatisation would get the railways off the government’s back, and breaking them into 100 pieces would mean that if one piece was on strike, the other 99 would not be. In the event, they refused to go away, and have maintained an obstinate tendency to put on business. Successive governments have had to cope with the consequences, and we must soon be due for the next set of answers.

For New Labour, sweeping into power a dozen years ago, the first and easiest answer was to abandon its costly threats to buy the railways back. Instead a vast new ministry headed by John Prescott would take charge of transport, and the railways were to have a ten-year plan and a Strategic Rail Authority to make it work. To show that this meant business, it would be run by Sir Alastair Morton, who could fairly claim, and did claim, to have built the Channel Tunnel.

No such great achievement followed, as Terry Gourvish says in his new book*, for the SRA had been given much responsibility but little power and no chequebook. For major investment, Morton told ministers, a public contribution would be needed. Predictably, the signals in Whitehall turned red.


Railtrack was meant to be the big investor, using shareholders’ money and borrowing more — but Railtrack (as an old railway hand put it) was a property company, not an engineering company. It had made a ruinous contract to rebuild the West Coast Main Line with unproven technology. The rebuilding straggled on until this year. We could have had a whole new railway, better and faster, in less time and for less money.

More visibly, Railtrack fell behind with the task of keeping the existing network safe. Accidents followed, a collective nervous breakdown (Morton’s phrase for it) followed them, and Railtrack was doomed. For connoisseurs of rows, the row over Railtrack had everything. It proved fatal to transport minister Stephen Byers and to his adviser, Jo Moore, who thought that 9/11 was ‘a good day to bury bad news’ — while his top civil servant Sir Richard Mottram was shunted, exclaiming, ‘I’m flummoxed, we’re all completely flummoxed’, or four-letter words to that effect. Morton, on a farewell visit, claimed to have worked with 37 different senior officials and was asked, ‘So where do you rank me?’ ‘Bottom but one.’

The only winner was Shriti Vadera, the adviser who was reported to have called the shareholders ‘fat cats’ and (though she denies this one) grannies who would lose their blouses. She impressed Gordon Brown and is now a Baroness. The dust settled, and Railtrack made way for Network Rail, a company limited by guarantee, with shoals of ‘public interest’ directors and a remit not to make profits — as if this was ever going to be its problem. It could borrow with the Treasury’s backing but without overloading the Treasury’s balance-sheet. Off-balance-sheet financing was in vogue just then.

As its accomplice in all this, the Strategic Rail Authority struggled on, but its glad confident morning was over. Richard Bowker was brought in from Virgin Trains as a successor and antidote to Morton — but as railway costs rose and frustrations ran high, Bowker (as Gourvish says) appeared to metamorphose into his predecessor, complete with pronouncements, hyper-vigilance, and inquests into leaks. The two had frustrations in common. Sooner or later, the piper’s paymasters would insist on calling the tune.

Sure enough, a new minister — this time it was Alistair Darling — called for a rail review. As any student of Yes, Minister would guess, it concluded that the Department for Transport could do the SRA’s job better. The work would be taken in-house (Great Minster House, to be precise) as DfT Rail. There, the standing temptation would be to micromanage and play trains. Railwaymen have cast doubts on DfT Rail’s plans for an electro-diesel pushmi-pullyu. It will be needed, we’re told, because expansion is in the air again, with talk of mainline electrification and of high-speed rail links. Expect these to lead the agenda of the next minister and the next review.

Of course, if the Treasury had been right and the railways had withered, they would now be off the government’s back — but privatisation stirred them up, as it is wont, and made them more commercial. Major’s ministers should have had more faith in their own nostrum. In the eight years from 1997, freight and passenger traffic both rose by one fifth — and these were the years of Railtrack’s implosion and the collective nervous breakdown. My comment from those times has found its way into Dow’s Dictionary of Railway Quotations: ‘Railways are a growth industry. Their most sustained attempts to drive away their customers have not succeeded.’ No more they will.

*Britain’s Railways 1997-2005: Labour’s Strategic Experiment by Terry Gourvish is
published by Oxford University Press, £30.


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