Sir George regrets Railtrack decision
14 Oct 2001
Sir George Young, former Secretary of State for Transport from 1995 to 1997, said he was sorry to learn that the Government had decided to put Railtrack into administration.
“This means that all the private money that was going to be invested by Railtrack into modernising the railway - £34 billion pounds - will no longer be available. The Government will now have to find the funds itself– and the history of the railways is that Government never puts in the money that is necessary. The action that the Government has taken to put Railtrack into Receivership will have repercussions way beyond the railway. It will reverberate throughout the growing dialogue between public and private sector on joint ventures, and make the City ultra-cautious about investing in projects in partnership with the Government."

Sir George also pointed out that the Government’s policy for the railways sat uneasily with its policy for London Underground. “With the Underground, the Government wants to keep the operation of the trains in the public sector, but use the private sector to modernise the infrastructure. But with the Railways, the Government is leaving the running of the trains in the private sector, while the public sector assumes responsibility for the infrastructure. It is difficult to see a coherent approach in their transport policy. After the Government's intervention with Railtrack, the City will demand a higher price for their involvement in the Tube - and this may make it very difficult to show that this is value for money."

Sir George said that, what was really important in running the railways, was a determination by all the players to work together to build a better and safer railway. “After privatisation, we all wanted to work together – Ministers, Railtrack, the Regulator, the Franchise Director, and the Train Operators. The new people we attracted in - from other transport industries such as shipping, aviation and buses - worked with the excellent managers who joined from British Rail, to start a new chapter – accessing the funds we could never get from the Treasury. Initially, things went well – the number of passengers started to rise after decades of decline; freight was attracted back off the roads; safety continued to improve; key fare increases were pegged to protect commuters and extra services were put on. The subsidy being paid to the new franchise operators was less than the subsidy paid to British Rail to run the network, and the investment in new rolling stock and stations increased substantially. Railtrack began ambitious plans such as building new links between the lines north of London and those to the South – and to modernise West Coast Main Line. There was a real feeling that there was a renaissance in our railways and that, after decades of underinvestment, a new future was opening up."

"Privatising the railways was not the dogmatic application of a political ideology; it was the only way to achieve a sustainable transport policy. Simply building more roads was not an option; motorists and freight had to be attracted to rail. That required investment; and an industry that looked outwards towards its market with an incentive to win more business - not an industry that looked inwards to the Government for subsidy. Privatising the railways in order to maximise their role in moving goods and people was at the heart of our transport policy.

It would be naive to blame all that has gone wrong on the change of government in 1997 and I don’t want to politicise the problems – one of the difficulties I faced was the absence of a consensus on how the railways should be run. Had we been re-elected in 1997, I am sure we would have wanted to modify the structure of the railway in the light of experience and to make further changes.

But one key factor – the determination to make the new system a success and to work together as a team – began to erode in 1997. The new Government had consistently opposed privatisation; but they had neither the funds to renationalise the railways; nor the political will to make privatisation work. Ministers started to settle old scores and snipe at some of the new train operators, and a blame culture began to take over from the team spirit. A new and at times aggressive Rail Regulator began to make it difficult for Railtrack to raise the capital it needed; a new Strategic Rail Authority set up between the Government and the industry made things more complicated rather than simpler; the letting of new franchises was suspended and personality conflicts got in the way of the needs of the industry. The tragedies at Southall, Paddington and Hatfield – primarily caused by poor management rather than the structure of the industry, as the subsequent inquiries showed – compounded the problems. Railtrack began to lose public and political support, and then the City began to lose confidence. The rest is now history.

But if Stephen Byers thought he had a neat and inexpensive solution, he is wrong. His action has raised more questions than it has answered. The railways now face a period of uncertainty.

What they desperately need now is stability; a continuation of the flow of investment by Franchise Operators and the new Railtrack; and the restoration of public confidence in the management of our railways."
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Copyright Sir George Young Bt. 2015