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Railwatch 077 - October 1998

By Michael Weinberg

Integrated Transport Policy

The long-awaited White Paper on Transport was finally introduced on 28 July with a statement to the House of Commons by John Prescott, Secretary of State for the Environment, Transport and the Regions. Those members of RDS who were hoping, in view of Labour's intentions regarding the railways when in opposition, that the White Paper would usher in a new golden age were perhaps disappointed. There was no evidence that the massive investments which have been going on overseas would be emulated here. Those hoping for commitments to new lines, a rolling programme of electrification, heavy concentration on rapid transit systems for our major cities as is virtually the norm in the rest of Europe, are left wondering what has really changed.

Yet Mr. Prescott seems to have made the correct analysis.

"The public mood has changed," he said. "There is now a consensus for radical change. Everyone now agrees that no change is not an option."

He said privatisation and deregulation in the 1980s and 1990s produced a public transport system that was fragmented, lacked investment and attracted fewer passengers.

He said the core of his approach was "integrating transport with environment policy and land use planning, with our economic, health, and education policies and with the creation of a fairer society." All this of course is a long way off and begs the question what happens in the meantime?

Mr Prescott is pinning many of his hopes on the bus. More and better policed bus lanes. He said the economics of the bus industry could be transformed by adding just two extra passengers per bus per journey.

As far as railways are concerned there was nothing that had not been trailed before. A strategic rail authority (advocated by RDS for years) was to be set up which would decide what the overall rail system should deliver. "Enforcement will be speeded up and strengthened by tougher penalties. If companies continue to fail to honour their contractual obligations to the passenger, they will lose their right to operate."

Existing franchisees would only have their franchises extended if they could guarantee "better performance, more investment, improvements for rail passengers and value for the taxpayer".

For the time being the Franchise Director would remain the operator of last resort, "and British Rail will retain the ability to be a train operator". He affirmed that Railtrack would be tightly scrutinised to ensure it invested sufficiently in the rail infrastructure. There would be an initial allocation of £100m "to lever in additional leading-edge investment in the rail network".

Mr Prescott wants something done about the rolling stock leasing companies, the sale of which by the previous Government he regards as "scandalous". He has asked the Regulator to negotiate a new concordat with them concerning the leasing of rolling stock to the operators and if that is not effective "I will consider bringing the ROSCOs under formal regulation".


"Rail freight was a better environmental option, " said Mr Prescott. It was his intention to re-invest proceeds from the sale of National Air Traffic Services into such projects as a piggy-back route from Scotland to the Channel Tunnel to full Euro-gauge "if terms can be agreed." Mr Prescott went on to announce that local authorities will be able to draw up their own local transport plans. Funding will come from new revenue streams, for example, parking and congestion charges and will be backed by £700m which "will enable the development of 150 local transport strategies over the next three years". The extra funds obtained from local charging schemes will be ring-fenced to be reinvested to improve public transport.

Mr Prescott said the Government was ending decades of under- investment, modernising our transport system, and investing for the future.

Opposition reply

Gillian Shephard (Con, SW Norfolk) replying for the Opposition was scathing in her criticisms of the White Paper, condemning both the presentation and the content. She said that after 14 months dithering in Government, 18 years fulminating in opposition, a £26 billion investment in roads, and billions that the privatisations and deregulations of the Conservatives had brought into the system, all we had got was extra taxes for road users, more regulation, more bureaucracy, "and no improvements for the travelling public even promised until after the next election". She called it "a wasted opportunity". She wanted the Minister to confirm that the actual increase in annual expenditure, far from being the £600m he had announced, was actually only £7m (according to that well known impartial observer of the transport scene, the British Roads Federation). She insisted that the so-called extra funding of £1.8 billion was made up largely of a reduction of subsidy to the privatised train companies. She wanted to know whether, by "British Rail retaining the ability" to be a train operator, the Minister meant British Rail has the right to compete for franchises. (If only!)

She wanted answers to several other questions. Does the Minister intend to remove all subsidy from the London Underground by the year 2000, and what happens if private funding does not materialise? How much extra taxation will motorists have to bear to pay for the improvements in public transport and how will he ensure 100% hypothecation of those taxes and guarantee transparency? Could he assure us that the Treasury will not take its slice by imposing VAT on top? There were a whole raft of questions about the effects of higher motoring taxes on women, rural dwellers, disabled people, visits to hospitals and schools, the effect of higher taxes on diesel fuel on road hauliers.

She finished by saying the White Paper owed "nothing to Labour's pre-election promises". We were promised action but what we are getting is "more taxes, a phone-in opportunity, more regulation, a new commission, a new authority, 152 new transport committees, some regional transport centres, a shower of documents, several pilots and of course - two reviews".

Tories' tax plan

In reply to this Mr Prescott asserted that in the Conservatives' own Green Paper they acknowledged the necessity of introducing additional motoring taxes to pay for better public transport. A consultation document would be produced to determine how these taxes would best be applied. He said privatisation of the railways had cost the taxpayer £1 billion. the public service obligation grant had increased from £1 billion to £2 billion so giving private sector rail companies twice the subsidy given to British Rail. The freight sector had been given a £250m dowry along with the sale and a guarantee to the private operators that no charges would be levied through the Channel Tunnel till 2005! "A prejudiced administration's loaded game against the public sector led to a transport policy that saw fewer goods carried by rail, more people travelling on congested roads, a worsening environment, and all the other problems which have highlighted our criticisms of that Administration".

He also mentioned that a third of the people in this country have no access to cars, and relied on public transport.

Gwyneth Dunwoody (Lab, Crewe and Nantwich) congratulated Mr Prescott on his "imaginative, sensible plan for the future". She expected the strategic rail authority to be much more responsive to the needs of the customer.


Matthew Taylor(Lib Dem, Truro and St Austell) thought the hypocrisy from the Conservative benches was breathtaking, considering the increased petrol costs and cuts to the road programme delivered by the last Government with "no practical action to help motorists and others get from A to B". However he was critical of the Minister for taking no steps to tackle the self-interests of out-of-town super-stores by announcing parking charges for them. There was no attempt to tackle company car taxation which currently rewards the gas guzzler and penalises the user of public transport. He also wanted a review of the way Government departments use their own cars. (MPs in Switzerland have to use public transport to get to their Parliament which perhaps explains why the Swiss have such good services.) He wanted assurance that a legislative slot has been prepared for the proposed changes otherwise "it will not be until the new millennium that any action begins to start. In that case, what is the difference from the Tories?"


Peter Snape (Lab, West Bromwich East) congratulated Mr Prescott on resisting the introduction of 44-tonne lorries. He said the largest lorries are the most subsidised and do the most damage. Mr Prescott replied that he thought allowing 41-tonne vehicles would encourage a move to six axle juggernauts which are less damaging. (Whether the Rail Freight Group takes such a benign view of 41-tonne lorries is highly debatable.) In reply to those Conservative MPs fuming about increased motoring taxation to pay for public transport, Mr Prescott stated: "The previous administration agreed that such charges should be considered. The difference is that I have got them hypothecated. I do not know whether Mrs Shephard has got the shadow cabinet to agree to establishing a new principle of hypothecation."

Clive Efford (Lab, Eltham) was concerned about transport links in south-east London, particularly as the only alternative to bus and car was Connex, which was already full up at certain times. Would the Minister consider extending the Jubilee line to north Greenwich where there is an arterial road? Mr Prescott said he was more concerned with increasing capacity on what we already had rather than considering new extensions, although he had recently approved a £35m extension of the Docklands Light Railway to London City Airport which would relieve congestion on the Limehouse link road which was extraordinarily expensive at £250m for one mile!

David Chidgey (Lib Dem, Eastleigh) commended the Government for adopting some of the policies the Lib-Dems had been advocating for years! Mr Prescott said he was delighted that at last he was in a position to carry them out! "However, governments can implement only that for which resources allow. I have tried to find new ways of financing, even to the extent of getting changes for local authorities in the Treasury rules to allow greater flexibility to invest. The issue is not only the amount I can find - almost £2 billion - but finding new, agreed income streams."

Hugh Bayley (Lab, York) drew attention to the devastating effect of vehicle emissions on the historic limestone buildings in York. Because of the new Government's railway freight policies the first of hundreds of new freight wagons were rolling off the production lines at York railway works, which had been closed under the Tories.

Mr Prescott said the works had closed, not because there had been no market for rolling stock but because the Conservatives had not been prepared to ensure that investment was available. Money that could have been used for investment had been wasted on the ideological policy of privatisation.

Channel Tunnel

Several peers expressed concern about future rail links direct to the North West from the Channel Tunnel in a Lords debate on 8 July.

Lord Inglewood compared the situation for rail compared with roads where the M25 and other motorways made journeys from the North to south of London much easier.

He considered that direct rail services, while not being competitive with aircraft for the businessman, would nevertheless prove attractive to the leisure and tourist markets, very important to the North West, whose journeys were not quite so time sensitive.

He considered that Britain's railways, originally laid out with London as the hub and spokes radiating out from it, were no longer suitable as part of the greater European system. Under this system the termini are at the extremities and it was vital for Britain to adapt our railways and not have the stumbling block of London in the way of all services from the regions to the rest of Europe.

Lord Inglewood was concerned that a direct link to the North West "is not being given the proper priority that it should in the Government's thinking".

Lord Cadman, too, was worried that the recent financial difficulties of London and Continental would result in the regional links not being built. He also felt that we were frightened of international trains whereas they took them in their stride on the Continent. There seemed to be no logical reason why domestic passengers could not use Eurostar for an internal leg of the journey, when in France, for example, they quite happily book their domestic passengers from Lille to Paris and Brussels on the first available service, Eurostar or not. Similarly the Paris-Koln-Brussels-Amsterdam trains linking Paris with Koln and Amsterdam are just considered a part of the French TGV system, with reservations all handled in the same way.

Customs problems

He was encouraged that Virgin had offered to run the regional Eurostar services free of subsidy.

Lord Mountevans took up the same point, saying that last winter, Eurostars ran deep into the French Alps to Bourg-St Maurice. He also was pleased with the Virgin offer but stressed it was as yet only a proposal. Again he hoped Eurostar finances would not be hamstrung by insistence on customs and immigration procedures at every station as is currently the plan.

If so, he was in favour of the Virgin proposal which necessitated a change at Watford, where all customs procedures would be carried out. Furthermore, "I hope we would not allow ourselves to be diverted in this instance by projects involving Heathrow". Lord Newby echoed Lord Inglewood's remarks about tourism, in that service industries had in many cases replaced the traditional heavy industry once so prevalent in the North. Good transport links were vital if this trend was to continue successfully. He thought the greatest scope lay in car-sleeper trains and improved freight services. He thought that there was also a psychological factor at work in that many young French people were coming to London because it seemed so much easier to just hop on a train. He felt a similar effect would be seen if there were direct services to the North West.

There was also a political dimension, said Lord Newby in that people in the North felt that Government decisions taken at Westminster did not always reflect the depth of feeling about issues affecting them. "the question of rail links north of London has assumed a political importance which almost goes beyond the economic benefit that such links would provide". He also was suspicious of suggested links via Heathrow if they were to the detriment of direct services to the North West.

The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions, Baroness Hayman, replying to the debate, assured the Lords that "once the Channel Tunnel rail link is opened the infrastructure will be in place for seamless journeys between the regions and the Continent."

"The Government, London & Continental Railways and Railtrack are working hard to take the proposals forward so that construction can start later this year." She said the new consortium running Eurostar have plans to maximise growth by having more frequent services, reducing check-in times and improving on-board services. The planned Eurostars to Heathrow, it is hoped, will "in due course enable Heathrow to develop as a hub for services across the country and as a gateway to Europe".

Further analysis

The Government was asked to give a commitment that the provision of Eurostar services to the North of England would start as soon as possible.

But the viability of those services has to be evaluated and an analysis made. The timing of that review is still the end of the year.

"We cannot prejudge the outcome."

On the issue of frontier controls the Government is aware that the addition of domestic passengers on regional Eurostar services might make them more commercially attractive, but passenger security has to be guaranteed. However, provided proper procedures are in place, "there are no frontier control reasons why regional Eurostar services which carry both domestic and international passengers should not be operated". As far as the existing trains are concerned they will only be allowed to operate when the necessary safety cases can be issued by Railtrack.

Cynog Dafis

Cynog Dafis, sponsor of the Road Traffic Reduction (National Targets) Bill is a Plaid Cymru MP, not Labour, as we stated in error in Railwatch 76.

Note: contact details (postal and email addresses, along with telephone numbers) in old editions of Railwatch out of date. Click CONTACT US for latest contact details.

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