John Redwood on Network Rail

<strong>Redwood calls for fundamental change in Governments approach to railway management</strong>

Ministers ought to demand much more from Network Rail in return for the ?3bn-odd Government subsidy, urged John Redwood in the Common yesterday. Residual monopoly in the structure has produced poor service of the kind experienced by commuters over the New Year. Ministers should lay down the level of performance they expect in return for the money, and Mr Redwood suggested that they prioritise the provision of more trains at peak times. The full speech, taken from Hansard, follows.

<strong>Mr. John Redwood (Wokingham) (Con): </strong>We saw a sorry performance from the Government Front Bencher this afternoon. There was a complete lack of analysis of what really went wrong, and a complete absence of remedies to make sure that, in future, money is not wasted and there are not so many delays. There was no real understanding of the structure that the Government created in their new Network Rail company, and there was no real, sincere apology to all the people whose travel arrangements, local stations and rail tracks were disrupted over the Christmas and new year period.

The Government are backed by Labour Members who seem to believe in a couple of myths??in ideological baggage left over from the old socialist period. One of them is the proposition that a nationalised monopoly railway, taking us back to the golden age of British Rail, would be a lot better, and the other is the proposition that fragmentation was the cause of the recent delays and problems. I shall consider those two myths before providing a bit of analysis on what is wrong with Network Rail, how it could be put right in the short term, and how it could be made a lot better through fundamental structural change in the medium or longer term.

Let us deal first with the myths. We are invited to believe that the nationalised monopoly between 1947 and 1993 was a paragon of virtue, which never delayed people, produced extremely good services, and delivered a much better railway for less money. Those of us who have read the history books, and some of those who are old enough to have lived through that period, will know that the reality was very different. Between 1947 and 1993, the nationalised monopoly was in continuous decline. I am not making a party political point. It did not matter whether there were a Labour, Conservative or Labour-Liberal coalition Government; the system did not work.

Over that long period, there was a continuous trend: a fall in the proportion of our freight carried by rail and of passenger journeys by rail. People voted with their feet and their pocket books for the flexibility of road travel. Hauliers came into the market and took the freight business. Indeed, the nationalised monopoly railway stopped competing for most freight business, because it decided that it would not do single-wagon marshalling at all. It decided that it was interested in rail freight business only if it involved complete train loads, and if there were a reasonable number of trains a day, or a week. There were only a few people in the country with enough business to get an offer from the railways to run rail freight.

It was not surprising, therefore, that there was a big decline in rail freight and passenger movements. The decline was accelerated by the gross financial mismanagement that characterised the nationalised railway under all Governments over a long period. During the period in question, huge subsidies had to be put into the railway. Despite those large subsidies, fares rose in real terms year after year, which put people off using the railways. Those on low income were deprived of any realistic chance of access to the railway, because rail travel became prohibitively expensive. It was a double whammy: the system was bad for the taxpayer, who had to subsidise it, and bad for the fare payer, because fares kept rising in real terms.

From time to time, under Treasury pressure, the railway was forced to cut services and to make closures. Sometimes there were a lot of closures all in one go, as in the case of the notorious Beeching cuts. More often, there was a dribble of closures, year after year, as and when Governments thought that they could get away with it. The nationalised monopoly always presented Governments of all persuasions with exactly the same cruel choices: ??Pay up, or we close lines??; ??Pay up, or we close services??; and ??Pay up, Minister, or we will pick on your line for particularly bad treatment.?? That was the brutal political reality that characterised the rows between the nationalised monopoly and Labour or Conservative Governments.

I find it surprising that after all these years of allegedly new Labour, the Labour party has not moved on in its thinking and realised that that was not a particularly good model. It was not even a good model for the people who worked for the railway. The nationalised monopoly kept sacking people, because as it retreated, made cuts and reduced services, it had to take cost out, although the costs still grew unrealistically. An awful lot of people were therefore made redundant into the bargain.

I think that Ministers understand those points, because we are 11 years into a Labour Government and there is absolutely no sign that they wish to recreate a nationalised monopoly. One cheer for that. We have some common ground, and some agreement. I do not expect any Minister to leap to his or her feet this evening and suggest that the record of the nationalised monopoly under Labour Governments was particularly fine. Ministers know that what I say about fares, service quality, delays, reliability and redundancies is all too true of the nationalised railway monopoly. Those on the Front Bench have at last realised that there needs to be a different model, and that a nationalised monopoly is not run by the Government but runs the Government, bosses the Government around and does not deliver for all the money that is put in.

However, many Labour Back Benchers seem to think, fondly, that there was a golden age of nationalised monopoly and, fondly, are misled into believing that their Government might one day recreate that nationalised monopoly. I should like to assure Labour Members that I do not believe that there is any chance of the present Labour Government recreating the nationalised monopoly of their dreams. The Government could not afford to nationalise the train companies, and they know that it would be a disaster trying to run the railways as they were in the 1970s and 1940s under Labour Governments and in the 1960s and 1980s under Conservative Governments. It was the failure of the nationalised monopoly that drove the Conservative Government into fundamental change, which ushered in a new era for the railways.

As someone who was involved in the decision for railway privatisation but who did not recommend the scheme that was chosen, I have no need to defend that scheme. The decision to introduce some element of private capital and some element of competitive choice and challenge did enough to transform the railways. We need turn no further than to the right hon. Member for Kingston upon Hull, East (Mr. Prescott), who has praised the way in which the privatised railway post-1993 moved from retreat and decline to an era of growth and development.

Ministers regularly use figures for the 1993 to 2007 period and, of course, they like using figures for the 1997 to 2007 period, when they can claim more of the credit. Whichever period one chooses, it presents a very different picture from the previous 40 years. It is a picture of growth in passenger travel and in freight transportation. Many of the present problems of the railways are the kind that one wants in a business. They are the problems of too much pressure of demand??more people wishing to use the railways and more people frustrated that better use cannot be made of those fabulous routes across the country and into the centres of our leading towns and cities, which are at present in the monopoly custodianship of Network Rail, the subject of the debate this evening. We seem to have some agreement that privatisation kicked off something that was rather good.

<strong>The Parliamentary Under-Secretary of State for Transport (Mr. Tom Harris): </strong>In spite of myself, I am enjoying the right hon. Gentlemans contribution. It is good to know that we do not have to wait for the publication of his memoirs to see that he disagreed with his Cabinet colleagues on the nature of the privatisation of the railways in 1993. Before he goes on to the consequences of that privatisation, would he mind sharing with the House his specific reservation with regard to the financial structure of Railtrack, the rolling stock companies and the passenger franchising system?

<strong>Mr. Redwood: </strong>My problem with the structure that we chose and with the Governments structure is that I think we left too big a monopoly element in the track. The evil is monopoly??it is not public ownership so much as monopoly. As all the economic textbooks rightly tell us, monopoly does in the customer. It always charges too much and delivers too little. It always looks after the interests of the owners and the senior managers. It does not look after the interests of the customers or even of the more junior employees, who do most of the work. So it is a nasty system, and even public ownership does not tame monopoly sufficiently to get rid its evil consequences.

At the time, I favoured splitting the railway into regional rail companies, which would allow competitive challenge over time, because they would have to re-bid for franchises; so it was not a perpetual monopoly for them. At the same time, it would allow others to come in and build new track or suggest new services, so that there was some element of contestability where the tracks could, in certain circumstances, be used as a common carrier and would not necessarily remain the monopoly preserve of the regional company. The basic structure was to go back to regional companies.

Although I do not think it necessary, reconnecting track and train can make sense. I was a strong opponent of the London underground system developed by the Government, because I thought that splitting track and train in confined tunnels was particularly foolish. I proposed the pro-competitive solution of splitting things into competing companies that owned track and train entire with their own lines; I think that that would still be a better answer, given that the system has gone bankrupt in one major company and is obviously struggling.

<strong>Mr. Harris:</strong> I am grateful to the right hon. Gentleman for giving way once more. Would he like to share his thoughts on the fact that European legislation prevents the ownership of trains and tracks together?

<strong>Mr. Redwood: </strong>I am not an expert lawyer on that issue; nor am I any kind of lawyer. However, my understanding and reading of the situation is that European legislation does not prevent that. That legislation requires more competitive challenge than a nationalised monopoly would allow, so I find myself in the curious position of supporting the thrust of those European regulations and that legislation, because competitive challenge is a good thing.

I turn to the second myth that I want to dismiss before going into the future, where the Minister wants to tempt me. That is the myth, which we have heard throughout this debate, that the particular problems of the constituents of my hon. Friend the Member for Rugby and Kenilworth (Jeremy Wright) and others were caused by fragmentation. That is complete nonsense. If Network Rail had been British Rail recreated, owning the trains that could not run, that would have made absolutely no difference to its mistake over the engineering works at Rugby and Liverpool Street. The same people would still have made the same miscalculation of failing to deliver enough engineers to sort out the complicated project within the deadline.

I am afraid that Labour Members who think that fragmentation caused the problems during the Christmas and new year are simply wrong. The problems were caused by Network Rails gross management miscalculation, and would have happened whether there had been fragmentation or not.

<strong>Jeremy Wright: </strong>I agree entirely with my right hon. Friend. Does he accept that if Network Rails management themselves say that there has been a management failure, there is no need for the Government to look for any other explanation?

<strong>Mr. Redwood: </strong>I agree, and I hope that the Government will not waste money on that. If Network Rail were a business reporting to me, the problem would be so obvious and would be sorted out with a timely and lively exchange with the senior management. I shall come to that when I discuss what power the Government have over that particular creature.

First, however, I should like to dismiss the fragmentation argument. If we compare the rail industry, which has all the problems that we have described??not growing quickly enough, fares too high, inadequate service for many people??with the aviation industry, a successful public transport industry in this country, the contrast is telling. The aviation industry is completely fragmented; on the Labour analysis, it should not work at all??it should be delaying passengers, putting fares up and doing all the bad things that the Labour Members I mentioned seem to expect.

The aviation industry is totally fragmented: there are competing public and private owners of airports, there is a privatised company dealing with air traffic services and a range of competing companies deals with luggage, other services and the retail offer at airports. Furthermore, competing companies own the planes and fly people around.

Aviation is more complicated to control. If there is a mess on the railways, all the signals can be put on red and problems can be sorted out. However, if a mess is made at an airport, a load of planes will stack up without much fuel and things cannot suddenly stop for a couple of hours so that problems can be sorted out. There would be a real disaster on our hands??the aviation system is much more complicated, working in three dimensions with limited runway space for landings. An awful lot of people would be at risk as they flew above the airport without much fuel in their planes.

The system shows that if we trust competition??what the Labour Members I mentioned would call ??fragmentation????we get much lower fares, much faster growth and much better passenger satisfaction. There is a much better range of offerings at a typical airport than at a typical train station. Airports usually offer a more pleasurable experience, except when the Government intervene on the security side. Aviation attracts a lot more people and delivers far more.

The Governments problem is that aviation is a runaway success. They do not like that, as they do not think it green enough and it uses a competitive challenge model. Railways, which they think a greener way to travel, are not a sufficient success. Whether railways are greener is arguable; that depends on how many people are travelling and how old the train is, although they could well be greener in some cases. The Government have problems with the rail industry because a lot of monopoly is still left in it.

Let me turn to the main focus of the debate, which is Network Rail. Ministers would lead us to believe that this business is an independent private sector company??that it just happens to have a different structure from all other private sector companies, that it just happens to be set up by the Government, that it just so happens that the Government own all the shares, and that it just so happens that the Government give it the bulk of its revenue. Ministers must be living in cloud cuckoo land. It is a Government creature??they can do anything they like with it. They can come to this House today or tomorrow and change its whole structure, and nobody will object because all the people on the board, the membership list and so forth are creatures of this Government, put there for some strange purpose??presumably to try to pretend that its borrowings are not properly public sector borrowings but are in some mysterious way private sector borrowings. Of course, they are as public as any borrowings could be, because they all have a Government guarantee. The only reason that Network Rail has been trading without qualified accounts and having access to banks is that it gets a guarantee from the taxpayer.

The companys financial structure is remarkable. It is a rather tiny company, as its net assets are only ?6.3 billion. After all the billions of expenditure and with potentially billions in assets??or so one would have thought, given all these fabulous routes??the companys net asset value is ?6.3 billion. To put it in context, that is just two years worth of the revenue subsidy that the Government tip into the business. However, the business has more than ?18 billion of net borrowings, or net debt, because it has a Government guarantee routing private sector money into it.

Even more remarkable is the revenue account. Last year, 90 per cent. of the operating costs were paid for by a revenue grant. Those who confuse investment and revenue subsidy complicate the debate to no little extent. Yes, the business needs investment, and yes, it is making investment, but it survives only because a colossally high proportion of its operating costs are being paid by a revenue subsidy. That does not happen to the competing road haulage or road passenger industries in the way that the Liberal Democrats imply; they seem to have mistaken investment money for revenue subsidy money.

This business is not efficient or well run, and it is not in robust financial health. It is there entirely because the Government support it with revenue and with guarantees on capital account. Its management do not seem able to make their business more efficient or, despite endless fare increases, to be able to do enough to grow the business so that the revenue strand from the fare payer overtakes that from the Government and becomes the dominant influence in the way one assumes that Ministers would like, given that they too must be rather worried about its huge dependence on revenue subsidy.

We are also led to believe that Railtrack failed because it did not invest enough. If the Minister looks at the figures, he will see that there was a quantum leap upwards in the amount of investment going into the railways after privatisation compared with pre-privatisation performance under Labour, Labour-Liberal and Conservative Governments at the time of the nationalised industry. In the last two years of its existence, before it was so rudely terminated by the Government, Railtrack had invested ?5 billion, and then ?5.3 billion in successive years. That shows that it was making a substantial commitment to the improvement of the railways, bearing in mind the fact that in the last couple of years of the nationalised industry the investment level had been about ?2 billion. The privatised industry managed to invest at two and a half times the level achieved by the nationalised industry in its dying years. If Members wanted to rush to their feet?? although they do not seem to be??to say that that was because there was a Conservative Government, I should say that the investment record under Labour and Labour-Liberal Governments was equally gloomy. There was not a sudden big reduction in railway investment when the Conservatives came to office in 1979.

Quite a lot of the railway investment under nationalisation was ill-judged. It went on glamour projects and on switching traction methods??particularly electrification, where the benefits are somewhat arguable??rather than being concentrated on better types of train, such as lighter or better braking trains, that could be used more frequently on the network, which must be the answer.

I now wish to be a little more creative and say what should happen from here. First, we all want the management of Network Rail to be made accountable for the egregious errors that we all agree have occurred in recent weeks. Those are not new errors, as my hon. Friend the Member for Chipping Barnet (Mrs. Villiers) pointed out. It did not learn the lessons from previous mistakes when engineering works had similarly overrun. As my hon. Friend the Member for Rugby and Kenilworth pointed out, they were eminently foreseeable errors. Those involved had to undertake a survey of quantities. They needed to know how many man and woman hours of good engineering skill they needed, and to understand the complexity of the task ahead of them. The main thing that management should do in such a situation is break the job up into manageable units of work, and create a contingency for things going wrong??people not turning up on new years day because they may be preoccupied, a bit hungover or whatever. Instead, they crammed too much into a limited time, and on two separate occasions they had to come to industry and the travelling public to say, ??Weve overshot. We cant actually manage it.??

Some Labour Members seem to think that it is a sufficient excuse to say, ??Oh well, some of this work entailed private contractors, which again shows that fragmentation was wrong, but it was a mistake to use private contractors.?? It was the call of Network Rail, the Governments own creature, whether to use private contractors or to hire the staff in-house so that they were permanently on its books. That is a matter for Network Rail; I do not have an ideological bias on that. Sometimes it is better to have ones own people in-house, and sometimes it is a good idea to use private contractors. People need to form a judgment based on how often they use them, how much they cost and how competitive the consultants and contractors are.

We pay very large salaries to Network Rail senior executives so that they can decide such matters for us. Ministers should be supervising that process. If senior managers cannot make such judgment calls sensibly??if they get the balance between in-house staff and private contractors wrong, if they get the bills of quantities wrong or if they cannot work out how long a given type of engineering will take??they simply are not up to the job.

The defence of Ministers is to say that that is not really any of their business because they have created an independent private sector company, and it is up to the board of the company and the remuneration committee of the board to take the necessary decisions. My view is very simple, and I think that it is shared by most members of the public. If a business is 100 per cent. owned by the Government, if 90 per cent. of its operating costs are paid for by taxpayers subsidy and if all its borrowings are guaranteed by the public, we should expect our representatives??the Ministers??to hire the best managers, and fire them if they get it wrong, or to find a way of making sure that they do not get it wrong again.

I found the evasive answers from the Secretary of State on the matter of remuneration and bonuses both surprising and depressing. If I were running a private business and my managers had done something wrong, the first thing I would say to them, after one had got to grips with the magnitude of the error, would be, ??Of course, there wont be any bonuses this year.?? I think that they would then say, ??Well, if thats all youre going to do to us, boss, weve got off quite lightly. Can we keep our jobs??? One might hear that sort of thing in the private sector context. Why do we not have that sort of feeling in the public sector? Ministers should have a private but lively conversation with the managers in this company to tell them that this is not only unacceptable, but that there has to be some visible financial penalty on senior managers.

We are talking about people earning exceedingly large sums of money. I do not want to penalise those at the bottom of the heap who did all the work and did not get paid much for turning up on a wet and cold December night, but the people at the top, who have made the misjudgments, have to feel the penalty in their pocketbook. The least that one would expect a Minister to say is that the performance pay element will either be abolished or much reduced, because performance has been sadly lacking in this situation. I do not know of anyone who will write to me saying, ??How disgraceful of you to say that these highly paid people cannot have their full bonuses this year??, given the suffering that people went through when they could not get their trains at Christmas and new year, and when they saw their stations and services so disrupted.

We need Ministers to tackle the rather ramshackle structure of Network Rail and to put in place a serious board with a limited number of really good people who can provide a critical appraisal of senior managers and provide focus through the remuneration committee and board meetings to ensure that such things are unacceptable to the board and, therefore, are less likely to happen in future. It will not help to have 100, 1,000 or 20,000 ??members??, or whatever. That is completely bogus. It is mock democracy, whereas I am a true democrat. If it is to be proper democracy, all 60 million people, or all 45 million taxpayers, have to be involved because we are the stakeholders. We are the ones who are paying the bills. However, that is not realistic. We have representatives to carry out the process for us, and they are called Ministers. Ministers have to appoint a limited number of really good people, who can ride the business hard and ensure that it performs to proper commercial disciplines??if they want to carry on doing things the Network Rail way.

Let us get away from the myth that Network Rail is a completely private sector entity, and let us see Ministers laying down, at least once a year, at corporate plan and Budget time, what they expect for the ?3 billion-odd of Revenue subsidy and what they expect for the several billions of guaranteed investment moneys borrowed on the taxpayer tab. We need to see performance, and there have to be results to show for such a sum of money going into the business. I see no evidence from todays debate, from reading the papers, or from previous debates on the subject that Ministers have seriously entered into the complicated but important task of setting feasible, limited objectives for the expenditure of that money, and determining how they will hold people to account if they do not achieve them.

<strong>Mr. Tom Harris: </strong>On a point of clarification, the right hon. Gentleman may have missed the publication in July of the Governments White Paper, which contained the high level output specification. That specifically states what we expect to buy from Network Rail in terms of performance and efficiencies. It sets out explicitly the statement of funds available. It sounds to me as if he has just described what we have already produced in July. He referred to that being done on an annual basis, however, and we are doing it on a five-year control period basis.

<strong>Mr. Redwood: </strong>The Minister put it very nicely, but of course I have seen the high level outputs. I would not come to such a debate and do the House the discourtesy of not having read a little of the background material.

The Minister outlines the first part of the process, but it is necessary to take the high level outputs and the five-year plan and turn them into something that relates to the half-yearly and annual reporting cycle of a proper company??the Government say that Network Rail is, but I say that it is not. That process has to take place at a more detailed level through the eyeballing of senior management in the ministerial office.

When I was a middle-ranking Minister, one of the main things I did was to have annual corporate plan review meetings with the bodies that reported to me, and those were very serious meetings. I prepared very strenuously for them; I trust that the people on the other side did, too. They were rather foolish if they did not. I used those meetings to say, ??Youll be very pleased to hear from a Minister like me that you are going to get some money, but I really expect you to make that money work very hard. This is how I expect you to make it work hard. These are the rewards for success, and these are the penalties for failure.?? That has to be a ministerial function, and if the Minister is going to insist on doing it through a so-called independent remuneration committee, he will have to hand pick that committee and brief its members so that he knows they are in line with his wishes.

As far as the top people are concerned, it is more important for Ministers to get involved. We need to see performance, and the Minister needs to see it in return for all this money. The money has to be limited. It is a huge task: we have a massive railway that needs injections of cash for growth and development. It is very clear that it is not being well run or managed at the moment.

I want to see medium-term reform. Even with the improvements I have suggested, I am sceptical about how well a Network Rail monopoly would work. I have been honest with the House. I do not think that Railtrack was brilliant, either, but Railtrack and Network Rail are not very different. They have the same principal problem, which is that they are monopolies, and it is difficult to make them responsive.

I have a slight preference for Railtrack because it had more of the disciplines of the market. It was driving efficiencies a bit better??decreasing subsidy and increasing investment. It had to respond to market disciplines on many of its borrowings and activities in a way in which Network Rail does not. The Government have relaxed the constraints on the railway track monopoly and that is why they have problems with overruns, delay, poor service and high costs.

The costs have mushroomed massively since the Government took office. The Government tell us that they have been fighting a battle over the past two years to get them down again, but the costs took off in the early Network Rail period because the disciplines were relaxed.

I would prefer a system whereby track and train were reunited and there was more contestability so that no one in the business felt they had a monopoly right in perpetuity. Of course, one has to give a regional train company, which also owns the tracks, a reasonable run at it or it will not make the necessary investment. One has to give such companies specific guarantees and they have to have a decent opportunity to make investing the capital worth while. However, they must also know that, at some point, they have to try again to maintain the franchise. The quid pro quo is that one has to tell them that they can sell on the capital that they have invested and the capital that they bought and inherited so that they know that, if they are unsuccessful, they will not wipe out their shareholders. There must be a penalty but it must not be so harsh that no one will take the risk or make the venture.

Contestability is also required. The ability to run across other peoples regions and to use the track more intelligently and better is necessary. An independent regulator or adjudicator, who can decide how the track can best be used, is also needed.

At the beginning of my speech, I referred to the tragedy of having fabulous routes that are not used enough. If one flies over southern England in a light aircraft at peak hours in the morning, one sees completely jammed roads, with vehicles bumper to bumper as people try to use cars, buses and motorcycles to get to work, and practically empty train tracks. The way in which the railways are currently run means that few trains an hour can be operated on those tracks. Typically, only 24 trains an hour can run given the existing technology. We need to operate far more than that to deal with peak hour demand. The railway is better for that than for dealing with off-peak demand because frequent services are required to make rail travel attractive. The best green advantages and time advantages of using the railways are obtained at peak times because the roads are congested and therefore polluting more. We need much more peak time rail travel.

How do we achieve that? There is an easy answer in the short term, before the technology and structure are fundamentally changed. If lighter weight trains are used, more of them can be run because they accelerate and brake more quickly. That happens on many networks abroad. In Britain, our system is over-engineered and heavy. Other hon. Members have referred to the complexity and absurdity of many of the rules for taking possession of the track for engineering works. I agree, but there is another set of rules for operating a railway that militates against using modern, state-of-the-art lighter weight trains, which are perfectly safe when used elsewhere and mean that more trains an hour can be operated.

The current engineering director of Network Rail, with whom I have had conversations, accepts that lighter weight trains could make a difference. It would be a great prize, which Ministers might like, if one could run, for example, 40 rather than 24 trains an hour. I hope that they will take seriously the proposition that, if one used trains that can speed up and slow down more rapidly??of course, signalling changes would also be required to deal with that, but they could be made within the system budgets; it would be much cheaper than building new track??a big improvement in the railways could be achieved. My hon. Friends the Members for Rugby and Kenilworth and for Macclesfield (Sir Nicholas Winterton) pointed out that under this Government the railway is going in the opposite direction??unless one lives at a terminus or near a large principal station on a main line, all the expensive works may lead to a deterioration in the service because the fast trains may not stop in ones town or city. The fast trains occupy much track space and time because they need good clearances for a long time for safety reasons as they belt along the main line route. If there are not enough bypasses or additional railway track, they clutter the track and reduce the frequency of the more mundane commuter short-hop services, which may be more important to a good travel system.

I hope that the Ministers will consider, in the investment programme, the balance between the glamorous, fast services to a few major cities and the important daily services that people in Rugby, Macclesfield, Wokingham and all the other places represented in the House this evening need. Those services are also needed to provide a greener and better alternative for peoples travel plans.

Our debate rightly focuses on the unacceptable events over Christmas and new year. Even Ministers agree that the delays were unacceptable and that a mistake was made. They say that they need a further period of reflection and inquiry to discover the mistake. Most of us believe that we know what the mistakes were from what we have read and seen. The statements and apologies made so far imply that the events were caused by a management failure by Network Rail.

I do not believe in public hanging or crude prose, which some people might believe to be appropriate in the circumstances. Far from it. I believe that we get the best out of people through incentive and motivation. However, when errors are so big and their impact is so great, there must be a penalty. I believe that it should be a financial penalty on senior management rather than, ??There, there. Please make sure it doesnt happen again.??

The Government say so often??there are many examples in recent weeks??that they will learn the lessons. I have heard nothing in the debate so far, especially from the Secretary of State, that makes me believe that she has learned any lessons. She has learned no lessons about how to get value for huge sums of public money; how to control a so-called not-for-profit independent private company, which is a creature of the state; how to choose good people and persuade them to do a good job; or how to turn an incompetent Government into a competent one.

I want to live in our great country and enjoy its facilities. I am afraid that so many facilities that the public sector owns are not well run. There is an aura of incompetence about them. When the Minister sums up, he will use all the buzzwords and buzz phrases that are on the pager or in the briefing, along with the civil service line to take, followed by??if ministerial briefings still contain it????defensive??, for when a Minister is under pressure or things are getting bad and, over the page, ??Now youre on your own. Bad luck.?? We want to go beyond that. It would give me great pleasure if the Minister said, ??A lot of what you said is sensible and we will try to work out a better way of employing top managers at Network Rail.?? It would be wonderful if he said that the Government would work much harder to get discipline over spending ?3 billion a year of Revenue subsidy and several billion of investment and break down the high level outputs into management units that make sense and can be built into peoples incentive packages. It would be good if he said that the Government would reconsider the programmes balance because they did not want to end up with people in Edinburgh, Glasgow and London being happy but those in Rugby, Kenilworth, Wokingham, Macclesfield and so on were not being happy because their services had been worsened by the hugely expensive investment programme.

My hon. Friends on the Front Bench tabled a fairly narrow motion because the anger of the country is currently focused on what went wrong at the weekend and over the long Christmas and new year holiday. However, there is also a strong feeling in the country that we would like to be greener??in some circumstances, travelling by train is greener than using other means??but the service needs to be accessible, friendly and feasible. We do not feel that the railway industry is ours, except when it needs someone to pay the bills, and we do not feel that, managed by the effectively nationalised monopoly of Network Rail, it is customer friendly. Apart from events over the Christmas period, it does not appear to look to a future of frequent services, lower fare packages and opportunities to use the trains that people want.

I hope that the Minister will take the opportunity to reflect a little more on the mismanagement, realise that it was not a one-off and that it will happen again unless there is some fundamental change in the Governments approach to railway management.


  1. […] John Redwood on Network Rail […]

  2. Mark
    January 9, 2008

    This is fascinating but much, much too long. If this were a business a presentation of this length would have had no impact at all. I think your blog is one of the best things in my feed reader but I am appalled to think that MP's talk at such inordinate length. The same points could and should have been made in a fraction of the time.

  3. RJ
    January 9, 2008

    I disagree strongly with Mark (post 12:14pm) on the length of the speech. I find it clear and interesting to read, and would have found it more engaging in spoken form. I would be less than impressed if MPs were not capable of making decent long speeches.

  4. Bazman
    January 11, 2008

    Very interesting and enlightening. It's right to ask for a lot more, given the amount of money put in.

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