Very good evening and thank you to Andy Bagnall and his group at Rail Companions for organising this occasion and for inviting me to produce what is my initial rail speech due to the fact turning out to be Transportation Secretary.
What a excellent location this is, surrounded by reminders of Britain’s wonderful engineering history and Bradshaw in whose identify we meet up with currently (7 February 2023). Whose timetables introduced get to the chaos of the Victorian community is as much a section of rail’s story as Stephenson, Brunel and many others honoured all through this setting up.
I would also like to spend tribute to Adrian Shooter who unfortunately passed absent in December. Around the past 30 a long time, few have played a larger part in the development and modernisation of the railways and I’m guaranteed he’s skipped by many a pal and colleague in this article these days.
I realise I’m the second Transport Secretary to give this prestigious tackle. And I’m happy to see Patrick in his seat. But me and Lord McLoughlin, Patrick as we all know him, or chief as I applied to get in touch with him, have a little bit additional in typical. We equally hail from doing work course backgrounds: my father a labourer, his a coal miner. We each grew up in historic railway cities: Swindon in my situation and Stafford in his. And we were both promoted from the whips office environment to managing the Department for Transportation. Even though admittedly, he was a little bit quicker than me I used an interlude on the backbenches.
Now, 6 many years may perhaps not seem like a extended time but, as Andy says, in the course of that time period we have given that still left the EU, emerged from a international pandemic, had 2 typical elections and my bash may perhaps have experienced a person or two modifications in management. Yet the much more factors have transformed outdoors the railways, the additional they seem to have stayed the identical within.
Patrick’s 2016 Bradshaw Address was a passionate contact for a far more versatile, additional accountable and a lot more joined-up railway. That continue to rings correct currently, as do the reflections of earlier Bradshaw speakers. Lord Hendy’s scenario for a complete procedure railway in 2018. Keith Williams, a year afterwards, with his relentless and right concentrate on passengers and even Rick Haythornthwaite’s warning at the inaugural Bradshaw Deal with in 2011 of a disillusioned general public not trusting the way our railways are run. Individuals all sound eerily common.
So, I have used my first couple of months in this task listening to the gurus, in fact to quite a few folks in this home, drawing on my knowledge in federal government and many yrs in small business, to comprehend what’s holding back significant alter and how we move forward.
There’s evidently a lot of aggravation in the market. There is a widespread want to conclusion the sense of drift. By relocating on from re-diagnosing the industry’s ills to having on with repairing them. The government’s policy is distinct. The Plan for Rail has currently been introduced to the Dwelling of Commons in Could 2021 so offering that policy, shifting from the words and phrases to action that is my precedence.
Simply because the railways, very frankly, are not fit for reason. We’re mired in industrial action, which lets down passengers and freight prospects down. And traditionally not able to provide key improvements at good benefit for the taxpayer. Britain is craving for a contemporary railway that fulfills the demands of the second. One particular trusted enough to be the 7-day-a-week engine for growth organizations expect. Nimble plenty of for submit pandemic travel, even though enabling more versatility for freight and economical ample when community paying out is rightly scrutinised like never ever before.
The railways need to have elementary reform and that is what we will deliver. And what I will attempt to established out this evening is how we re-energise that system. Releasing reform from the sidings and obtaining it back again on to the mainline.
But 1st, I will have to provide some important context. In putting an end to last year’s unwelcome political and financial turbulence this federal government promised to be straight with the public about the difficult choices forward. We established out a system to restore financial steadiness and that strategy is operating.
We have witnessed a sizeable settling of the sector, we’ve reassured buyers, calmed the markets and strengthened the currency. It is a potent foundation from which to produce the Prime Minister’s 2023 financial priorities: halve inflation, growing the overall economy, and lowering financial debt.
It is testomony to this industry’s massive economic possible that even amidst a demanding fiscal local weather we gave full backing to the £96 billion Built-in Rail Plan.
The major solitary expenditure at any time manufactured in our railways will choose HS2 from Euston to Manchester. Northern Powerhouse Rail throughout the Pennines. East West Rail between Oxford and Cambridge. And that has the Chancellor’s comprehensive help.
We’re not squandering any time. In December, I noticed the massive development exertion underway at the web page of Curzon St Station in Birmingham. It will be the first new intercity terminus created due to the fact the 19th century. Attracting tens of 1000’s of jobs and sparking housing and professional regeneration throughout the metropolis.
Never get my term for it go and converse to Andy Avenue and you’ll get a very passionate scenario about the transformation that HS2 is bringing to his city.
But we risk wasting that future infrastructure paying if our railway model is trapped in the earlier and many thanks to Keith’s painstaking perform, we know what the underlying issues are. A fragmented construction that immediately forgets the purchaser. Decision earning with much too minor accountability, but with way too much centralisation. And a private sector rightly criticised for inadequate effectiveness but with much too couple levers to change it. An market in “no man’s land” as Andrew Haines effectively described it in his Beesley lecture.
And in the end it’s rail’s customers that put up with. Like on the East Coast Mainline, wherever travellers still await the complete benefits of billions of pounds in taxpayer financial commitment and many years of infrastructure updates. I know this initial hand. As a backbench MP, when I was trying to get a Sunday train from my constituency to London, I bear in mind constantly refreshing the Very first Great Western timetable to obtain half the trains weren’t operating. Like several passengers, I had no alternative but to give up and just take the motor vehicle instead.
Andrew, who was then functioning To start with Group, almost certainly remembers my fairly irate e-mail from the station system, interrogating him about why the support was so unreliable. 4 months into this task, I now know why. I maybe owe him an overdue apology. It wasn’t totally his fault. For the reason that Sunday products and services are basically dependent on motorists volunteering for time beyond regulation. Which means, irrespective of most effective endeavours, we cannot run a trusted 7-day-a-7 days railway on which prospects can depend. It is why I and the Rail Minister, Huw Merriman, have been clear through this period of industrial motion that modernising operating techniques will have to be part of reform.
Eventually, the pandemic has produced a lousy problem worse, a whole lot worse. Thanks to hybrid operating, an financial product dependent on 5-working day commuting is out of date. Acquire year ticket gross sales, which are at just 28% of pre-COVID amounts.
Unsurprisingly, and you don’t have to have a chartered accountant like me to explain to you this, the impression on the industry’s bottom line has been stark. Earnings is close to £125-175 million decreased each individual month and expenditures keep soaring year on calendar year.
Any other sector would have collapsed years back but the railways have only survived simply because of the taxpayer and the public purse. The source of about 70% of cash flow more than the previous 2 several years at a price tag of £1,000 for every household. I won’t mince my words: running the railways is at this time monetarily unsustainable and it isn’t fair to continue asking taxpayers to foot the invoice. Most of them never frequently use the railways. Which includes a great deal of my constituents in the Forest of Dean.
But they find on their own subsidising an sector that provides only 1.5% and 2% of all journeys that are taken by the community. That disproportionately serves commuters in the south-east and whose funding comes at the cost of other very important transportation upgrades. At a time when sacrifices are currently being made across the economy we must be informed of the trade-offs when it comes to general public paying out and remind ourselves, as Patrick rightly stated in his address, that the Office for Transport isn’t the “Department for the Railways”.
So, we have a damaged model. Unable to adapt to client requires and financially unsustainable. Still left untreated, we will travel passengers absent with lousy general performance, that will lead to less products and services, that will generate additional travellers away and so on and so on. Only big reform can split that cycle of drop and Keith’s blueprint is the appropriate put to commence. So sure, we will build a more customer focussed and joined up railway. But we want to go further more, I want to go even further, and truly boost the position of the personal sector. Not just in jogging expert services but in maximising competition, innovation, and revenue growth right throughout the sector. Which the gains of the private sector has delivered time and again.
Permit me get started, even so, with shoppers. To raise profits, we have to instil a purchaser first tradition. That usually means dependable products and services, comfortable journeys and accessible stations. But it also implies tackling the concern which tops passenger lists of largest considerations, which is fares and ticketing. With 55 million fares accessible how can everyone experience confident they are having the ideal benefit for money? Ticketing should really be headache cost-free, one thing you barely have to feel about. Which is why, now, I can validate the extension of Pay-As-You-Go ticketing, with 52 stations across the south-east set to be completed this calendar year which include on Chiltern, London Northwestern, and C2C services.
Ticket selling prices must also be fairer but often there is tiny distinction in between the expense of a single or a return. Operators are often unable to considerably decrease rates on quieter providers. So, soon after LNER’s prosperous solitary leg pricing demo we’ll increase it to other pieces of the LNER network from the spring and then diligently consider the results of people just before extending extra greatly. It indicates a versatile solitary fare will generally be 50 % the price of the equal return – giving passengers additional adaptability and superior benefit. This is not about raising fares, I want travellers to benefit from less difficult ticketing that meets their wants.
We’re also likely to master from the aviation sector and improved regulate potential as properly as raise profits by trialling need-centered pricing on some LNER providers way too.
Still, passengers are not the industry’s only consumers. Carrying tens of billions of pounds really worth of goods we can’t overstate rail freight’s untapped possible for green development. So I intend to develop a duty to guarantee the new industry structure realises that possible with a committed Strategic Freight Unit tasked with building far better safeguards, extra national coordination and, later on this 12 months, listening to what was claimed earlier, placing a lengthy-phrase freight expansion focus on.
Having said that, turning toward customers necessitates us to transform away from the current market construction. So, we will create Fantastic British Railways, or GBR. As we get ready for that, we’ll select up the speed of reform. I am pleased to announce that the winner of the GBR HQ level of competition will be revealed in advance of Easter. And by the summer season, we will react to the consultation on GBR’s legislative powers.
The business has lengthy named for a guiding head to coordinate the network so GBR will be accountable for track and teach, as effectively as profits and price tag. Which implies lastly managing the railway as the entire procedure it should really be alternatively than a website of disparate passions that it is come to be. Passengers won’t more time deal with the excuse-generating and blame-shifting of yrs previous. Rather, GBR will be wholeheartedly consumer-focussed. Serving as the one position of accountability for the performance of the railway and crucially, adhering to ministerial direction, the GBR Changeover Team will build the guiding long-term method for rail which we will publish afterwards this 12 months and I hope will deliver strategic course to the sector.
Nonetheless there remains a good deal of misinformation about GBR. So allow me tackle some of these myths head on.
This is not likely to be Community Rail 2., nor a return to British Rail. Having politics out of the railways is the only way to construct a genuinely commercially led marketplace and, for me, that is non-negotiable. That is why GBR will be an arm’s duration human body making sure a balanced tactic to the two infrastructure and functions. With the two sides receiving a seat at the desk and both equally sides offering an successful, high carrying out railway for buyers.
The job of ministers is to provide strategic course and be accountable to Parliament. It is not the function of ministers to pore above operational decisions. For case in point, I shouldn’t need to have to approve whether or not a passenger train should to be eradicated from the timetable to let a freight prepare to run as an alternative, as I was carrying out before nowadays. That will be still left to sector gurus in 5 regional GBR divisions doing the job in partnership with regional bodies this kind of as the Higher Manchester and the West Midlands Put together Authorities.
Similarly, we just cannot take the other extraordinary see. Public oversight of our essential infrastructure is necessary. In particular to support all those passenger providers that never change a financial gain, yet still perform an vital economic and social position. That is why we want a pragmatic partnership involving point out and industry, harnessing the essential oversight of the point out. With the dynamism, innovation and performance of the non-public sector.
This integrated model is effective, and not just with the railways. That was how we attained a person of the fastest and most effective COVID vaccine rollouts in the earth, and its what we want to do in the railways.
Private sector supply
Which brings me to the final spot of reform. To enhance the part of the personal sector, which I see as central to the upcoming of the railways. Below privatisation and many thanks to a resilient and world class source chain, passenger quantities doubled to 1.75 billion by the eve of the pandemic. With non-public sector investment in rolling inventory reached just about £7 billion over the previous 10 a long time.
I don’t want to change my back on that business experience. The Nationwide Rail Contracts and existing overcentralised technique are short-term, a small-term fix that has aided steer the field as a result of the pandemic and this will be phased out.
I want the non-public sector to play its most essential position in our railways nonetheless. To reinvigorate the sector, push innovation and most importantly, entice additional customers to the railway. It will do so in partnership with GBR. GBR will support established the ideal commercial conditions across various important parts.
There will be new Passenger Assistance Contracts that will equilibrium the proper performance incentives with simple, commercially pushed targets. But they won’t be a just one-dimension suits all tactic. In the previous, we know some operators took on far more fiscal hazard than they could deal with. So, now that chance will sit the place it is most effective managed and that contains with operators, but only the place it drives the best outcomes for travellers and taxpayers. We should not be fearful to enable managing directors of train working providers truly take care of and direct their functions. Which is not what they’re able to do at the minute.
We’ll also open up railway facts and techniques, although decreasing barriers to entry for the sector. For ticketing, that suggests a far more competitive retail marketplace and I will welcome new gamers to spur far more innovation and give passengers the solutions they want.
We will broaden commercial options close to land and assets near stations. In Japan, rail providers consider entire edge of these investments, producing even much more revenue for the railways and we need to search to do the exact same.
And at last, we will help more open obtain providers in which it advantages passengers and taxpayers. We have viewed this get the job done properly with Hull Trains and Grand Central as very well as with Lumo on the East Coast Mainline. All featuring passengers larger option and additional direct hyperlinks. Open up access operators will perform an vital purpose in the industry’s future, especially as we grow new markets and make ideal use of spare capacity on the community.
Let me finish by saying that regardless of currently being the next Transportation Secretary to deliver this handle I’m most likely the initial to be provided a biblical nickname. Present day Railways Magazine explained the rail market as ready for “Moses Harper to arrive again from the mountain with tablets of stone.” Even though I’m, of course, flattered by that comparison, unlike Moses, I do program to reside extended more than enough to access the promised land of rail reform. And while my phrases this night have not been divinely impressed they do have the whole aid of the Key Minister and the Chancellor, which, in politics, is the future ideal thing.
As a entire government, we are urgent ‘go’ on rail reform. Working day-to-day get the job done will be ably led by the Rail Minister, Huw Merriman, who’s right here tonight and has lengthy championed the will need for a reformed railway, such as when he was chairman of the Transport Pick Committee. He will give the stability and management wanted, although also offering the marketplace freedom to provide meaningful change and I hope you will all rise to the challenge:
- to set shoppers to start with
- to realise the rewards of GBR
- to enable enrich the purpose of the non-public sector
For the reason that only then can the railway generate the general public rely on it demands to develop.
As we appear in advance to the industry’s 200-calendar year anniversary in 2025, this is our prospect to resurrect some countrywide pleasure in our railways. A possibility to harness the political will that is there, the financial crucial and I imagine the industry purchase-in to build the modern-day railway Britain justifies.
It is a likelihood we simply cannot squander.