Christian Wolmar
HS2, franchising, rail investment and industrial relations… CHRISTIAN WOLMAR argues that “a paralysed administration” is in no state to tackle key issues facing the rail industry
Uncertainty and instability.
“Whereas previously passengers would have blamed the unions solely for the dispute, they now share their anger pretty much equally between the unions, the management and the Government.”
WELL, that was a turn-up for the books. We’ve had the vote for Brexit, Trump’s surprise win, and Macron in France coming from nowhere to achieve two landslides, but actually the achievement of Jeremy Corbyn’s Labour party winning 40% of the vote and gaining 30 seats beats them all.
Certainly, that was the view of all the political pundits I have spoken to in the past few days. No one saw this coming, least of all Mystic Wolmar.
The outcome of a hung Parliament with a bunch of evangelical Christians shoring up the vicar’s daughter, while rather amusing, is a recipe for uncertainty and instability. And that is bad for the railway industry.
The reappointment of much the same Cabinet, including Chris Grayling as Secretary of State for Transport, may suggest stability but actually is only a reflection of Theresa May’s weakness rather than any innate loyalty. The one interesting addition is Michael Gove, who will face the immediate task of dealing with the result of the successful court case brought against the Government by ClimateEarth, over air pollution caused principally by motor vehicles. Just possibly he will look to push the Government into investing more in railways and less in mad highway schemes such as the £1.2 billion A14 widening, but don’t hold your breath.
While as former Chancellor ( and now Evening Standard editor) George Osborne put it rather unkindly, Theresa May is “a dead woman walking”, she will probably still be in Downing Street at Christmas. Mystic Wolmar reckons that there will be neither a General Election (she will not be allowed to run one - that’s for sure) nor a leadership one, because the Conservatives know they will get hammered in a new poll and a new leader would face demands to legitimise themselves through one. (Warning: I am writing this on the Monday following the election. By Friday, after this issue of RAIL has gone to press, Mystic’s fingers may well have been burnt).
Therefore, we will have a lame duck PM for at least a year, and quite possibly until the constituency boundary changes scheduled for next year are introduced next year, as they boost the Conservatives’ situation by around 20 seats.
It is difficult to discern what this may mean, apart from total inertia. There will be very little legislation not concerned with Brexit, and even that will be difficult to get through given that the splits in the Tory party are now being exposed daily.
The key issues facing the rail industry are Network Rail’s finances, industrial relations at Southern and elsewhere, the franchising programme, HS2, and investment in new projects - particularly electrification. All of these involve Government in one way or another, and a paralysed administration is in no state to tackle them.
Firstly, there is the problem of the Democratic Unionist Party. They are not going to go into any deal without extracting a pound of flesh. And where is that going to come from? It may only be a few billion here and there, but transport could well suffer given the overall shortage of cash, and it will be the capital programme that will suffer.
Everyone in the industry knows that Network Rail is facing a cash crisis. Whether it is a reduction in the use of the yellow trains, or additional speed restrictions not being sorted, the signs are evident. Only very clever footwork by Network Rail bosses and a policy of omertà during the election campaign (and indeed before) has prevented more widespread debate about the issue, but there is no avoiding it in the medium term. How will a maimed government respond?
The franchising programme is also in some disarray, with a paucity of bidders and the desire to improve the lot of the passengers conflicting with the demands of the Treasury.
Labour’s role could be important in two respects here. There is no doubt that the Labour surge was a response to seven years of austerity, stagnant incomes and cuts to public services. The electorate had clearly had enough, not least because of the reduction of 20,000 police officers under May’s watch which became a big issue as a result of the terrorist attacks.
The Tories have noticed this and they will be very reluctant to continue on a path of hard austerity, especially as it will not take many of their own side to revolt to reverse a policy decision in a hung Parliament. Therefore, cutting back on services or promised improvements may not be an option.
While transport played little role in the election hustings, the dispute on Southern may well have contributed to some of the enormous swings to Labour in the region. Again, the public has changed. Whereas previously passengers would have blamed the unions solely for the dispute, they now share their anger pretty much equally between the unions,
the management and the Government.
The other aspect of franchising in which Labour may well have an influence is over the very future of the franchising programme.
Labour is now within touching distance of power. I was talking to Peter Kellner, the political journalist and former chairman of YouGov, the night before the election. He said that the polls showing Labour doing well were clearly wrong because they suggested that Labour would need to win Canterbury (which, of course, Labour did!), and I confess I agreed with him.
This means that Labour’s commitment to allowing the franchises to run out and renationalise them could become a factor in the bidding process. It may well deter even more companies from bothering to enter into contests, which (given that an election may be possible at any time) would be money down the drain.
Lastly, HS2. This may well be a tempting one to kick into touch. The DUP MPs are hardly likely to be great supporters, and there may well be a new cohort of MPs - such as the new Scottish Conservatives - who have little interest in the project.
Of course, Parliament has had its say, but there is no guarantee that ministers will give the go-ahead to the diggers in these fraught times. Crossrail 2 may also be a victim of further delay, especially as London has gone even redder thanks to the popularity of Mayor Sadiq Khan, who featured prominently on Labour literature. Grayling is hardly likely to support a project to help his political enemies at a time like this.
All in all, as mentioned earlier, uncertainty is not good for the railways. It is an industry that requires long-term commitment and (euh!) a strong and stable Government. Instead we seemed to have ended up with a coalition of chaos, or even chaos and not even a coalition. Good for journalists chasing a story, less good for railway managers and passengers.