Getting railways on track is some task

Times

18 hours ago

That's the trains for you. Have a squint at the government publicity for its new transport quango and there's some Union Jack-flagged graphic, saying: 'Great British Railways — coming soon'. Only soon? What's the problem this time? Signal failure? Leaves on the line? The wrong kind of snow?
None of them, apparently. Just the time it takes to pass into law the Railways Bill. It will, the government says, create a 'single 'directing mind' bringing track and train together', with GBR running a largely state-owned passenger railway, even if the rolling stock and freight companies will stay private. Already ministers are taking back control of what once were 14 private passenger franchises, most recently South Western and C2C, when their contracts expire.
Listen to Heidi Alexander's transport department and GBR will end 'decades of fragmentation and private profiteering'. Yet, you shouldn't really need a new report from Tony Lodge at the Centre for Policy Studies to spot that GBR — a product of Labour's state-knows-best mentality — risks 'morphing into the ghost of British Rail'. Or that it seems a 'solution looking for a problem': one prioritising rail nationalisation above 'efficient operation'. Ministers' antipathy to private 'open access' operators, running without government contracts or subsidy — Hull Trains, Lumo and Grand Central, say, on the east coast line — tells you that.
• Virgin Trains' attempt to get back on to the railways blocked
Sure, privatisation had its faults, the most glaring the separation of train and track. And some of the passenger growth would have happened anyway. Yet, as Lodge points out, in the two decades up to the pandemic, passenger journeys rose by 107 per cent, services were up by 32 per cent and the private sector invested £14 billion in new trains.
Of course, some private outfits failed. A former Labour government shunted Railtrack into the buffers, aghast at its £7 billion of debts, even if its state-owned successor, Network Rail, now has a net £61 billion. Then, there was a trio of financial derailments on the East Coast line: GNER, National Express and Virgin Trains. Yet, franchising largely worked until ministers started to micro-manage it, while also requiring train operators bidding for contracts to forecast the economy 15 years out: a feat patently beyond the Treasury, the Bank of England or the Office for Budget Responsibility.
Whether in public or private hands, three problems stand out: the railways need too much subsidy, given they account for just 2 per cent of passenger journeys; capacity is not being used efficiently enough; and ticketing is a mess, with many fares too pricey. All are interrelated. But there's nothing yet from Alexander or GBR to address them.
The operational railway needed £12.5 billion of taxpayer subsidy in the year to March 2024 (the latest figures): up by £4.6 billion versus the year to March 2020. A key reason? That even if passenger numbers are nearly back to pre-pandemic levels, working from home has killed season ticket sales — 13 per cent of journeys in the year to March 2025 versus 34 per cent pre-Covid.
As Lodge points out, that puts the emphasis on three things: new income streams, such as exploiting rail's 52,000-hectare estate to use unused land for everything from solar power to property schemes; shifting capacity from commuters to leisure travellers; and a simplified ticketing app that includes such innovations as a loyalty scheme.
He says 'one of GBR's first tasks should be to carry out a full train utilisation study' to match capacity to 'in-demand' services. And he's right that, here, the government is showing 'misguided hostility' to open-access operators. Private companies are far more likely than civil servants to spot a gap in the market for a new service. And the latest annual figures from the state-backed LNER suggest that, rather than eat into its sales, competition on the east coast is driving them up — from £867 million to top £1 billion. Notably, while Britain clamps down on open access, Europe is going in the opposite direction, with France, Spain and Italy finding it cuts fares and lifts service frequency.
What, too, of the political risk with GBR? As Lodge notes: 'Creating GBR gives ministers both complete responsibility for the railway and all of the blame' — not least if the unions bring the network to a halt. Alexander is far from proving that her new quango is the best route to getting the railways back on track.
Luckily, Rachel Reeves's budget was ingeniously designed to have no impact on 'working people'. So, she won't have to worry about the latest 'Red Flag Alert' report from Begbies Traynor, the business rescue and recovery outfit. It's found that nearly 50,000 UK companies are on the brink of keeling over — up 21.4 per cent on 2024's second quarter.
True, as the Begbies boss, Ric Traynor, notes, 'tariffs' and 'geopolitical uncertainty' haven't helped. But 'businesses across the UK are being put under immense strain by the increases to employers' NI' and 'the national minimum wage', with consumer sectors such as bars and restaurants, tourism and retailers particularly hard hit. Still, what a relief for Reeves that working people don't do those sorts of jobs.
One day is a bit quick to judge what the EC's Ursula von der Leyen hailed as 'the biggest trade deal ever'. But, having locked in 15 per cent tariffs on most US imports from the EU, the euro fell by 1 per cent-plus against the dollar, Germany's Dax dropped by a similar amount, with France's Cac also down, while the German chancellor, Friedrich Merz, spoke of the 'considerable damage' to come. As for the S&P 500 and Nasdaq, they touched intra-day highs. An inescapable day one verdict: Von der Leyen's been trumped.
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