Greenwood says that NR’s borrowing arrangements are now in “unfamiliar territory”, following the organisation’s reclassification and the publication of the Government’s new Framework Agreement with Network Rail, but she is open-minded about other ways of financing improvements to the network.
“It’s up to ministers to prove that the new arrangements are fit for purpose, but I don’t necessarily think that we should discount other ways of funding investment.
“Chiltern Railways has made use of the facility charge model for its Evergreen 3 project, and I am regularly lobbied by colleagues from Hull who wish to see the privately-funded electrification of their connection to the East Coast Main Line.
“As we devolve more powers and funding, transport authorities should be able to concentrate resources much more effectively, and indeed local authorities can often find creative solutions to funding challenges. These are all options that I’d be interested in looking at after the election.”
Greenwood does not deny the oft-repeated point that the Rail Delivery Group often reminds journalists of… that successive government policy has indeed lowered the taxpayer’s burden of paying for the railway over the years, directing it more towards the fare payer.
“We have already said that we will review fares and ticketing structures. We think that the ‘flex’ mechanism has been used to unfairly target commuters, and that’s why we are committed to scrapping it - not just for one year, as the Government has done, but completely. We have also set out other reforms, such as giving passengers a legal right to the cheapest fare.”
Greenwood also recognises that despite the unequal fare payer/taxpayer split, “there’s no doubt that the railways provide a service that benefits the whole country”.
She adds: “Record investment has been made in recent years. From 1997 to 2010, more was invested in the railways, in real terms, than under any previous government. The Government is still supporting the railways by around £4bn a year, and we believe that money could be spent more efficiently to provide a better deal for both fare payers and taxpayers.”
The party’s National Policy Forum has resolved to “ease the pressure on fare payers by capping annual fare rises on every route, simplifying fare structures, and creating a new legal right to the cheapest ticket.”
The NPF resolution recognises that since the late 1990s there has been significant investment in the railways, and that passenger numbers have grown sharply.
“But it is now clear that the rail system is not delivering a fair deal for passengers or the taxpayer, almost 20 years on from the botched privatisation of the railways. Both public subsidy and fares are higher than in other countries and there is no ‘guiding mind’ overseeing the railways, planning investment and ensuing results. We have also seen a chaotic franchising process in recent years that has cost millions.”
It continues to suggest that the situation whereby Directly Operated Railways cannot run franchises should be reversed (this would entail an amendment to the 1993 Railways Act), calling for the lessons of East Coast to be learned.
That could mean DOR or another form of not-for-dividend or public sector operator (perhaps a consortium of local authorities in the guise of a Rail North, for example) being able to “challenge the train operators on a genuinely level playing field in the public interest, to secure value for money for passengers and taxpayers”.
Says Greenwood: “We now have a situation where you can be a European public rail company and run our railways, but our own British-owned operator is unable to run lines in the future. We need a different approach that puts the public interest first, reverses the presumption against the public sector, and properly serves the passenger.”
Unsurprisingly, given the problems over the West Coast competition, Labour has pledged an overall review of the passenger rail franchising process “as a priority”, in order to safeguard taxpayer and passenger interests and put in place a system that is fit for purpose.
Under a Labour government, decisions over devolution (with the administering of rail franchises already devolved to Scotland and soon to Wales) could involve the operation of regional and local bus services, trams and ferries into a single network - much like many other European countries (particularly in Scandinavia). This would mark a significant shift in the way public transport networks overall are run and funded.
More recently, the party has also committed to an infrastructure commission to plan long-term investment, through the implementation of Sir John Armitt’s recommendation for a National Infrastructure Commission.
Passenger rail franchising survived a potentially fatal blow in 2012. But with the Inter City East Coast franchise let to Virgin/Stagecoach and a forthcoming deal for Great Western, there is a settled will (even from Labour, for the time being) that franchising will continue at least in some form.
Projects such as HS2, Crossrail and other improvements to the network (some of which have required cross-party support for Bills) are already either under way or are at least making good progress at the legislative or planning stages - proving across Labour, the Liberal Democrats and the Conservatives that there is a great deal of both funding and political commitment to the railway.
And although the Coalition parties don’t want to answer the difficult questions on railway finance (the taxpayer/farepayer split, or what to do about NR’s credit card), there is at least an acceptance that the railway is a good thing for the economy, even if the sums of money involved are large.
Benefits of major features become apparent years into the future. If today’s generation of politicians is confident of the benefits to the economy of something that may not open until 2019, 2026, or even 2033, it is a vote of confidence that the railways can be trusted to deliver and provide essential transport infrastructure for the future.
A speech given by McLoughlin at an event held by the Campaign for Better Transport in February hinted that there would be no substantial shifts in rail policy, from a Conservative point of view.
But having placed considerable emphasis on rail in the past five years, a 2015-2020 Conservative-led government might well choose to shift any spare energies and efforts towards aviation policy, and in particular the vexed question of South East runway capacity.
And while the planning process for Control Period 6 (2019-2024) is already under way, immediate questions of railway funding may not immediately concern political parties keen to address more electorally palatable issues such as health, education, the European Union and immigration).
There is a clear political appetite to keep rail fares down - particularly season tickets. But much of the pressure is on the South East, and commuters there already enjoy heavily discounted single journeys. If fares are to be capped, what will pay for new trains to replace the hated Pacers and other types of 1980s DMUs in the North of England?
Which future government will promise a massive increase in passenger subsidy to bring the 75%-25% farepayer/taxpayer split once more favoured towards the taxpayer? The answers given by all major parties inevitably generate more questions.
