EXCLUSIVE: Labour’s railway vision

• This feature was published in RAIL 890 (October 23-November 5 2019)
   

With a General Election looking increasingly likely, Britain’s transport policy could soon be in the hands of a “railway nerd who reads RAIL magazine” - as Jeremy Cobyn described himself in a Parliamentary debate back in 2006.

On winning the Labour leadership, Corbyn swiftly moved Labour’s policy to taking passenger franchises back as they expire. This approach was a sharp contrast to that of Ed Miliband, who proposed allowing the state to bid against private competitors for each franchise. Miliband’s predecessors Gordon Brown and Tony Blair, while abolishing Railtrack and establishing Network Rail, left the franchise system intact while in government.

The man Corbyn has entrusted with rolling out this vision is Labour’s Shadow Transport Secretary Andy McDonald. He wants to create “a railway that encourages people to use the rail system, where at the moment its complexity and cost means that people who could really benefit from using a reliable rail service would be put off”.

But what of freight, which unlike passenger services was not privatised on a franchise-based model?

McDonald sees the starting point for a state-owned freight service in the operator that already exists - Direct Rail Services, which is owned by the Nuclear Decommissioning Authority, a government agency. Would McDonald seek to expand it?

“We must retain a healthy and vibrant freight sector,” he says.

“One of the objects of an advanced railway putting increased capacity into the system is to move cargo from road to rail as much as we can. But freight exists also to sustain and maintain the conventional railway as we know it. Without a healthy freight sector, we’d be in real trouble.”

This means a more interventionist approach with freight operating companies (FOCs).

“For example, when we hear of DB Cargo in real difficulties, I don’t think government should sit on its hands and allow that critical part of the industry just to fall by the wayside,” he says, referring to the job cuts announced in 2016 following the sharp decline in coal traffic.

“That would be irresponsible. That also presents an opportunity for further involvement of the public sector.”

Andy Bain, a former president of the TSSA union who worked as a safety manager at the RSSB (formerly the Rail Safety and Standards Board) until his recent retirement, says freight operators could be “integrated” into a public operator over time. He also favours a significant expansion.

“The freight sector has much to offer,” he says. “As industries are planned and new factories and warehouses proposed, then rail connections should be the norm.”

This is crucial to Bain’s overarching contention that “you can’t have socialism in one industry” - a railway run on left-wing principles would not only need to be developed as part of a wider planned economy, it would also require a “significant change of consciousness” among the British people, who would need to grasp “the limitations of the capitalist system” which currently guides the development of our transport network.

Mick Whelan, general secretary of train drivers’ union ASLEF, says the ‘greening’ of Britain’s economy could be greatly assisted by a public sector freight operator, enabling modal shift. He argues that private provision of freight services has left some parts of the country - notably Scotland - without staffing levels adequate for the railway’s needs.

But McDonald suggests that private freight operations may initially remain: “There are a list of priorities for me when we come into government,” he says.

One industry insider has a pithy analysis: “Freight wagons don’t vote.”

McDonald is also critical of the current approach to rolling stock ownership: “I’ve said to the ROSCOs themselves that they ‘got away with murder’. They received our rolling stock at a knock-down price and they have been extracting value from that ever since, and been leasing our rolling stock back to us at eye-watering charges, for which the passenger and the taxpayer have to foot the bill.”

But, he concedes: “That was then, this is now. If you look at examples such as Merseyrail, they didn’t have to go through a ROSCO for new rolling stock. Government, at low interest rates, can go and finance directly. Surely that’s a better alternative for the taxpayer?

“Clearly we have long-term commitments here with the rolling stock companies, and clearly it’s going to be a challenge dealing with that dynamic. Our first priority when acquiring new rolling stock will be to deal with the financing directly, not through them.”

McDonald praises the rolling stock companies for their offer of “technology and development” opportunities, but states: “We’re not going to be paying through the nose for something we can avoid. I’d much rather put those wasted costs into green investment in the railways… rather than just pouring it down the drain in massive leasing costs, which is just an anathema.”

He also sees the outsourcing of maintenance as unsustainable, saying that the flaws of the model were apparent from the collapse of Carillion.

“How can it possibly be that a contract was awarded to them for the building of Phase 1 of HS2, when everybody including the hedge fund managers knew they were on the brink of collapse, and yet the Tory government still awarded them that contract?

“With the collapse Network Rail did the right thing, and brought the maintenance work by Carillion in-house. And it makes sense to say this is something that needs to be sustained. There’s always going to be a programme that needs attention - why on Earth would you not bring appropriate responsibilities in-house rather than have them contracted out, with all the vagaries that contracting out brings in terms of precarious employment, and so on and so forth?”

This end to outsourcing would also apply to the maintenance and cleaning of rolling stock.

“What we want to create is one singular company where people say ‘I belong here, I am working for the railway’,” says McDonald.

“At the moment you have people who are employed on pretty scandalous rates of pay and insecure circumstances who are doing critically important work in keeping our trains safe for the travelling public. That simply cannot continue. Those people are working on the railway, they should be part of the railway family - not contracted to a company that can simply exploit and use their services for the maximisation of profit. That’s not the way to go.”

There is also the issue of the EU’s Fourth Railway Package, which the European Commission says aims to “revitalise the rail sector and make it more competitive vis-à-vis other modes of transport”.

State-owned railways on the continent have readied themselves for the package by separating infrastructure and operations into separate companies - the exact opposite of what McDonald wants to achieve. So, is he worried?

“The Fourth Rail Package will become effective in its full form in 2023, and I’ve got contingency plans settled to deal with that eventuality, were that to bite,” he reveals.

“Of all the significant challenges this country is going to face in the next few months, I think the Fourth Rail Package is not going to be top of the agenda.

“If we need a derogation from the Fourth Rail Package then so be it, but there are other ways to achieve what I am determined to achieve, which is a fully integrated railway uniting track and train, and devolving the governance of that railway system to the nations and regions of Great Britain.”

But how can more devolution be achieved while absorbing separate operators in Scotland and Wales into a national company?

“I see it as essential that we get buy-in at a national level from Scotland, from Wales and the English regions,” says McDonald.

“They will have that buy-in, a seat at the table, along with trade unions and passengers.”

More specifically? A formal structure has not yet been announced by Labour, but McDonald says it will be “democratic” with input from local as well as devolved government.

“They’re best placed to describe what services are needed in their nation or region. Take Transport for the North: across 16 million people, it makes sense that there be some democratic relationship between the people who receive the services and how we’re investing in their region.”

Whelan says devolution must take a different model to that seen in today’s railways: “I’m not against devolution of railways, under a national rail umbrella. But what we’ve had in the last 20 years, when we’ve talked about devolved railways is devolved cuts.”

Bain believes that a quick reduction in fares would be a “quick win” for a Labour government, helping to convince passengers that public ownership is a worthwhile project despite the inevitable hiccups in the early weeks, months and years.

On a tight budget, how would the government fund the buy-back of elements sold outright - such as the freight and rolling stock sectors? One option would be to exchange shares for government-backed bonds. This was mooted in The Times as early as 1995, concerning the recently privatised Railtrack, when Blair’s Labour was still committed to renationalisation.

A key pillar of Labour’s plan - perhaps obviously, given the party’s roots in the union movement (and its recent journey back to them) - is greater involvement for workers in running the railways.

This never came off in 1947, with workers feeling nationalisation amounted to “no more than exchanging one set of employers for another”, according to Mike Berlin, a historian of the RMT union. And as London mayor, Ken Livingstone appointed the late RMT leader Bob Crow to Transport for London’s board - but Crow resigned after Livingstone called for Tube workers to cross picket lines.

“The difficulty for us will always be juggling the two hats,” says Whelan.

“How can you be part of the employer - poacher and gamekeeper at the same time? I think there would have to be a two-degree separation for somebody like myself, but having the right people in place.”

But it should be a “real voice with real authority and a real share” rather than the “social contract” and “social dialogue” approach favoured by other railways, he stresses.

McDonald agrees: “This is only going to work if all stakeholders have a true stakeholding in the organisation. And that means that the trade unions as well as passengers will have to have seats at the Supervisory Board level, both nationally and regionally. If we’re going to develop the advanced and successful railway, it’s essential we have the workforce working in concert with the other members of the Supervisory Boards in pursuit of a 30- to 40-year vision of what the railway should be.”

This taps into issues such as driver-only operation, on which Labour has been outspoken in supporting striking union members.

Says McDonald:“One of the conflicts that will often arise is how advanced technology will impact on the railway - what does that mean in terms of employment and security of employment?

“Hitherto, the culture has been that well-advanced technology means the ability to cut costs and cut jobs, and that has been a recipe for disaster. This has always been a people-intensive industry, and indeed I’d argue for an increased people-intensive working. We have to make sure everybody adapts to a constantly changing environment that doesn’t have an adverse impact on employment and terms and conditions.”

Under the 1947 Act, government established passenger “consultative committees” to hold British Railways to account. These bodies have evolved over the years into what is now called Transport Focus, which carries out (among other duties) the National Rail Passenger Survey. Should a left-wing government expand and empower this existing watchdog, or start from scratch?

“I think you’re right, this has to be looked at fundamentally,” says McDonald.

“If you look at the funding for Transport Focus, that’s dependent on its revenue stream from government. And I wonder: is that really setting out to achieve its objectives of representing passengers?

“I think there is an argument (and we’re not there yet in terms of our complete thinking, but there is an argument) for looking at the fare books and utilising a tiny, tiny fraction of that fare book to establish a passenger representative organisation that has a seat at the tables. That can be truly a democratic structure, where passengers themselves are saying who will represent them.”

He is conscious that passenger representatives “can come forward and be properly trained to be an effective voice, because more often than not in all aspects of the transport industry, it would be dominated by people who have very significant professional experience, and their voices are loudest”.

What kind of demands would passengers make? Would they seek more comfort, or a no-frills service at the lowest possible fares?

For Whelan, the railways should be about more than ‘just getting from A to B’: “I love the romance. Part of rail travel shouldn’t just be the Japanese-style commute. It should be the ability to look out of the window, daydream, look at the countryside and enjoy the moment. If we want people to use the railway, it has to be an experience. We need legislation that stops people being treated worse than livestock that are travelling - particularly when people are paying such high fares.”

McDonald says the railways are currently “far too prone to government interference and micro-management, even down to the seats on Thameslink”.

He says: “The DfT shouldn’t be anywhere near that. The Tory challenge to me is: ‘Why do you think you can run the railway, why do you want to run the railway, and why do you think you can do it better?’

“The answer is I, individually, do not want to run the railway and I will not be running the railway. I’ll be putting a nationalised company at arms’ length from the government and where - if you set the structures up correctly - you have the right political oversight, you can completely revolutionise the railway.”

■ This article is an extract from the latest issue of RailReview, RAIL’s quarterly business title. See www.railreview.co.uk