A ‘WHOLE SYSTEM’ APPROACH
“There will be many bits of the industry looking to get out of onerous standards requirements,” thought Mark Phillips.
“The risk is that things to change could be picked out in isolation. It is most important that we look at the system as a whole.
“If you start to change the standards required for infrastructure - I could cite the overhead power lines on the Great Western - that could have implications for designers of pantographs and the providers of the power supply. I think there will be pressure to amend European standards, and I think therefore there will be a need for clear impact assessments.”
Martin Fleetwood felt there would be a desire for the UK to have quicker decisions on standards than is possible under a system that relies on achieving pan-European agreements. Could we, he asked, have more rapid progress on the interface between light rail and heavy rail?
“In Europe the system is pretty heavily defined in terms of standards,” Phillips countered. “It would be disappointing if we suddenly started to unpick that. We will need to protect what is good about European standards, so that manufacturers in the UK can still export into the European market. We do not want to close that down.”
If the UK follows the Norway/Iceland economic model, the EU will continue to set standards which the UK will have to follow without having any say in them.
“European standards dictate what happens over here, and to a large extent that won’t change,” opined Stephen Joseph.
Tammy Samuel questioned whether European rules would be needed all the time. She pointed to a forthcoming order for 250 nine-car trains for London Underground, with Hitachi and Siemens joining forces to bid despite London Underground stock not being built to European standards.
“Why do we need to stay the same when they are already used to having a rolling stock platform they can adapt to different markets?” she asked.
Len Porter summed up the panel’s thoughts: “There is a threat to systems thinking. Network Rail thinks infrastructure; operators think about train services. It is now more important that the Rail Delivery Group really starts thinking about the system as a whole. Different groups cannot just go and make their own post-Brexit amendments to suit their needs, because that could be to the detriment of the industry in general.”
THE ECONOMIC IMPACT
Halfway through the debate, it was pointed out that no one had yet mentioned the effect on passengers.
“If you asked Chris Grayling, he would say that the railway does not work for passengers because it is full of people throwing contracts at each other,” said Stephen Joseph. “His view is that Brexit gives an opportunity to get out of that - a chance to have more integration between track and train.
“I told him the people who are most into this are the people in his own department, who spend their time working out which boxes have been ticked rather than working out what would benefit passengers.”
Tammy Samuel countered: “Our record is not good on integration. The SWT Deep Alliance with Network Rail failed. The experience in Scotland has not been terribly positive.”
Samuel is working with Transport for London on Crossrail. TfL will be the authority, the infrastructure manager and the controller of services. Yet European legislation requires the separation of track and trains.
“It can be done,” she said. “We decided to stop being vertically integrated long before Europe did. Brexit won’t necessarily alter that.”
“Germany and France made absolutely certain there was plenty of wriggle room to allow vertically integrated operations,” said Chris Jackson. “You just need to be careful how it is done.”
Most economic commentators think there will be a lessening of economic activity, at least temporarily, during the Brexit process. With less tax revenue, the Government may seek to spend less. It could turn to a Network Rail no longer beholden to European standards.
“Cancelling HS2, delaying electrification - these schemes could fall off a cliff,” warned Stephen Joseph. “Or it could go the other way. The Government might spend more on infrastructure to stimulate the economy. Brexit is both a threat and an opportunity, and it is too early to predict which it will be.”
“We can now make our own rules about funding, about state aid,” said Chris Jackson.
“Under European rules, the state cannot give an advantage to one commercial operator over another. If we relax those rules to have innovative partnership arrangements which have a commercial element in the mix, Brexit potentially gives the Government the ability to have new funding models.”
Will the UK seek to protect its own markets, possibly with state intervention? Although this could encourage home-grown jobs and promote skills, no one on the panel thought it would be constructive to discourage European firms that already have a strong grip in the UK.
“It was an unspoken rule that there were some markets in the EU where it was pointless bidding,” said Elaine Greenwood. “Decisions were made before looking at the bids. That is only going to get worse after Brexit. Protectionism will be a bigger factor.”
Tammy Samuel: “Will the foreign-owned train operators be put off bidding? The likes of Abellio, Arriva and Keolis? National Express is, in fact, mainly Spanish. Will we be limited to Stagecoach, First and Go-Ahead?
By leaving Europe, are we restricting ourselves to the UK competitors and restricting their abilities to bid in other European countries?”
Tim Durham, of Australian investor Macquarie, could take a non-European perspective. “Macquarie’s point of view is that London remains a global trading centre, and we don’t think its influence will change a great deal. We don’t think there will be tumbleweed blowing down City streets.
“We have a very strong financing market for rolling stock. There is so much interest in UK rail investment. But if you start to play with the structure in a big way, it will scare off investors and they will go somewhere that is more stable.
