Travelling by train ought to be a low-cost, low-stress and low-carbon way of getting around. The railways ought to have a simple ticketing system, a timetable set a year ahead, along with the designated platforms. Railway technology is pretty simple, the assets are obvious and well-defined, and digitalisation ought to be massively reducing the costs, bringing labour costs down to a much more automated service.
That’s the theory, and that is what some other countries manage. Switzerland comes to mind. So why are UK railways so bad and yet so expensive? Why are trains often late, cancelled at short notice, reduced in the number of carriages? Why is information so poor? Why do minor technical problems with the trains so often cause chaos? A train door not opening, a hooter not working, toilets out of use, no catering or hot water, no seat reservations, trains in the wrong order and too often a simple lack of information?
The problems are not easily explained away by the two standard and mostly unconvincing scapegoats: the unions and privatisation. They reflect a railway that has lost its basic sense of purpose. There is a culture of decline, and a widespread view that improving the railways is a hopeless task, a bit like reforming the NHS. It is what it is and will ever more be like this.
So is it all the fault of the unions?
The all too easy answer is to blame the unions. Obstructing changes in working practices (driverless and guard-free trains, drone usage in place of manual track inspections), insisting on following antiquated rulebooks dependent on overtime and going on strike – these are all laid at the door of the unions. UK unions are not unique on all this. France experiences some of these difficulties.
It is easy for industrial relations to become sour and an entrenched set of grievances to emerge and then get baked in. Years of a declining railway, of staff reductions and pressures to push down costs have left their legacy – as they have in the Royal Mail and/or they did in the coal mines. The two sides get fixated with their narratives, and a dash of politics gets laid on top.
The lesson from other declining industries is that this history is not solved by a bit of negotiation and compromise at the margins. It requires a fundamental re-set. The rail industry has the opportunity to do this because the long declines since the Second World War are over, and demand should be pushing ever upwards. More demand should mean more revenues and the ability to handle the legacy costs of the past and those of the existing workforce. The railways have the opportunity to start again.
Did privatisation mess it all up?
There is little doubt that the privatisation of British Rail was badly botched, and it is not surprising that it has been slowly unwound back towards nationalisation. Back in the 1990s, there were two core objectives in privatisation. The first was to deal with an industry assumed to be in decline, and hence the task was to manage that decline. The second was to transfer more of the costs from taxpayers to rail passengers.
The first objective was to be met by breaking up the industry and trying to inject more competition, on the assumption that this would lead to sharp efficiency gains, and reduce the ability of the unions to organise national strikes. Breaking up British Rail involved the creation of leasing companies for the rail stock (the rolling stock companies, ROSCOs), creating franchised rail operating companies, introducing the possibility of entrants bringing on competitive rail services, and Railtrack to provide the core rail network infrastructure. Behind this lurked an entirely inappropriate model – that used in electricity and gas. And as with electricity and gas, it was deliberate that there would be no one responsible for the system as a whole, no “fat controller”, and not even a national ticketing system.
The second objective meant that rail ticket prices would go up, and the result would be amongst the highest ticket prices in developed countries. This further suppressed demand, reinforcing the sense of decline. Like the Royal Mail, the response to weaker demand was to raise prices.
It is no accident that the three last great privatisations of the 1990s were all very badly designed, badly implemented and all fell apart. The Royal Mail, British Energy (the nuclear assets) and British Rail are all sorry shadows of what they once were. It is hard to argue that any of these privatisations improved their industries, and easy to point out obvious failures.
Privatisation did not even help with the union problems. New legislation did hamstring the ability to strike, but as this winter has demonstrated, the unions are able to cause great disruption. Multiple parties in the negotiations on wages and conditions have not weakened the ability of the unions to make their stands, and multiple unions have added to the chaos.
What is to be done?
If the railways go on like this, the results will be further haemorrhaging of the networks, and an acceptance that poor service is all that can be delivered. Alongside this crumbling network, new lines and services will be kept separate. HS1 and HS2, as well as Crossrail, are like this: £100 billion is spent on HS2, whilst the existing network receives only short-term funding.
Try for the moment a thought experiment. Imagine a well-run, punctual, clean and reliable service, at reasonable cost. Imagine being able to book trains and seats, to travel on trains in which everyone had a seat, to get good seat service, toilets that work and tickets that are clear, transparent and interchangeable. Imagine if the train is the default choice of travel between towns and cities, and imagine that it is interconnected with bus, metros and other travel modes, and would be preferable and cheaper than regional flying. Is this all beyond a modern economy in the third decade of the twenty-first century?
This is not a gradual programme of change, with new bits of sticky plaster stuck onto the old. It is a complete system transition. There are two issues in getting from here to there. The first is the cost. The second is the transition and managing the legacy costs and working practices.
The system transition
Imagine not a blank piece of paper, but rather one that includes the existing main lines, the signals and stations. These would be treated as assets-in-perpetuity, providing a service for the foreseeable future and at least for the rest of this century. These core assets would all be in good shape and well-maintained. This does not mean shiny new kit, but rather capital maintenance that provides a cushion to absorb shocks. Swiss railways use wooden sleepers in places. They maintain them properly. It would not be just-in-time maintenance and just good enough, but rather a margin that demonstrates resilience against predictable potential shocks. Snow does not stop Swiss railways, and flooding, leaves on the line, snow and ice should not stop the UK lines.
The signals would be “modern” and smart, not analogue, manual and often dumb. Signalling is all about modern information flows, and this in turn requires information about the network and the location of the trains, aided by all the new source of information from drones, satellites and on-the-ground cameras and monitoring systems. It is a classic big data problem and AI is the obvious tool.
The stations are interchanges, and the core service is the platforms and information. Their primary purpose is not shopping malls, as terminals have become in airports, encouraged by regulation, notably at Heathrow. All the information available through the signalling systems can help to provide real live – reliable and up-to-date – information to travellers in stations everywhere.
Suppose for a moment that we all agreed that this is what a modern railway would look like. With it would come a sense of pride and status for those who worked on this railway. Railway staff would not spend their time apologising for the poor service and spend their days dealing with stressed and sometimes angry customers. But how would we get from here to there?
Making it happen
The first and obvious point to make is that the current malaise is not amenable to incremental change. Adding better signals, fixing the toilets and making better announcements are not going to change much, and certainly not the culture.
Throwing more money at the problem is not going to do it either. There have been years of doing this, and not just in the railways but also for the NHS and schools. More money does not necessarily mean better services
It is not accidental that most of these sorts of system changes happen after crises. The existing models are run and run until the outcomes are too intolerable and the system breaks (again as with the NHS and Royal Mail). It is only then that people stand back and ask whether the system is fit for purpose. This could be one of those moments, caused by strikes and the breakdown of the basic services. That would be a good outcome for the strikes, even if it not what the unions intended.
It is also not much good to negotiate line-by-line changes in working practices. It is better just to do them all in one go and face the consequences, even if it means paying off the passing workforce.
Such change will not happen if the main political parties see the railways as a football to kick around to embarrass their opponents. So there needs to be a plan, and one that attracts cross-party support. The way to do this is to start with a cross-party approach, and set up a commission to come up with a plan for a modern railway system and to spell out what it should comprise (just as it is for the NHS and postal services).
Is it affordable?
The Treasury will rightly focus on the costs and its affordability. It can do this narrowly, as it does now, or it can do it from an economy-wide perspective. The economy is facilitated by its great utility networks – energy, transport, water and communications. The economic benefits of a well-resourced and well-maintained and reliable railway network are considerable. The economic costs of the current railways are to be measured not just in terms of annual losses and subsidies, but in lower productivity and lower competitiveness.
Then there is the comparison with the higher costs of the current poor railways. It costs a lot to run an unpunctual railway. It needs replacement bus services, chauffeurs to drive train drivers around when trains end up in the wrong places, and much greater costs to fix things when they break, rather than maintain them properly so they do not break. This is a strong distinction with Switzerland: because every knows that the railways will be properly maintained and work effectively, there is no need for all these ancillary costs.
What the Treasury should compare is the costs of running a proper railway system with smart signalling, Big Data, AI, full capital maintenance and a resilient buffer of staff and kit, versus what we have now, and only then look to the costs of the transition. It should start from where we want to get to, not simply accept the status quo and look for marginal improvements.
Is this likely to happen? The state of the UK economy resembles that of the 1970s: there is a widespread perception that too many things are not working, of which the railways, the Royal Mail and the NHS are but examples. The default position will probably be to muddle through, with yet more poor productivity and weakened competitiveness. If workers can’t get to work, if the economy has to bear the costs of the railways disruption to the functioning of the economy, and at very high cost too, economic growth will continue to be elusive. The railways are a “burning platform”. The current approach is not sustainable, and therefore it will not be sustained. The longer the current chaos persists, the greater the eventual cost of putting it onto a firm foundation.
