Freshwater Public Affairs visited the London headquarters of engineering consultants, Arup, to hear Shadow Secretary of State for Transport, Mary Creagh, set out Labour’s plan for the railways.
Labour’s vision will undoubtedly be fleshed out in their manifesto and scrutinised in detail in the lead-up to the general election, but the defining points of their agenda are as follows.
Labour will create a “single guiding mind”, a new arm’s length regulatory body which will consist of Network Rail and a new representative passenger organisation, possibly akin to Passenger Focus. This new organisation will have responsibility for planning investment and the coordination of services on the railways, contracting routes, overseeing the operation of stations, fares and ticketing, the procurement, lease, and planning of rolling stock, and promoting and improving industry skills.
Labour is committing to review the current franchising system.
Although, under questioning, Mary Creagh was clear to say that she didn’t envisage the end of franchising – no doubt to the disappointment of some Labour members – it was also apparent that she will seek to see how the current system can be improved for the passenger.
Ms Creagh evidently thinks that the current franchising system does not work for service users and, when tested against the vagaries of the market, fails to create an environment that allows services to be properly protected – citing the transfer of rolling stock away from First TransPennine Express to Chiltern Railways as an example of this weakness.
Confirming a well-trailed policy that came out of the National Policy Forum in Milton Keynes last month, it was announced that Labour will legislate to allow the public sector to challenge private operators and bid to run new franchises on a level playing field.
Many will see this as a compromise between unions and the Labour Left who want to see full re-nationalisation and those, such as the current government, who are committed to privatisation and moving the East Coast Main Line back into private hands. Ms Creagh stated that, were Labour in power today, they would have kept the East Coast under the control of Directly Operated Railways.
This halfway-house solution will also satisfy those who consider it wrongheaded that state-backed operators from Germany, France, the Netherlands and elsewhere are able to bid for franchises in the UK.
Labour would give passengers and rail employees (and, one would therefore expect, the railway unions) a bigger say in how services are run. In part this objective will be achieved with the institution of a passenger group into the new regulatory body (see Point 1).
The extent to which Labour would formalise the participation of passengers and employees in the structure of rail operators remains to be seen, but it is likely that elements of the cooperative or mutual business models would be applied.
Labour will give passengers a legal right to the cheapest ticket at the time of travel, and will apply a new cap on fares (a yet to be determined multiple of the Retail Price Index). Labour also commits to doing away with the “flex” ticketing arrangement, which gives operators the ability to raise fares on some journeys by higher than the government’s RPI+ calculation. Ms Creagh argued that the loss of “flex” will mean a lower average ticket price.
While Ms Creagh stated that train operating companies would be expected to take the loss in operating income of a strict fare cap out of their profits, but conceded that this would have to be negotiated separately.
The event was held in London on 19 August 2014.
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