Britain’s rail system is working OK for once. So the Competition & Markets Authority wants to stuff it up

Choo choo: another busy day at King's Cross. Image: Getty.

The current British rail system*, for the first time in about a century, works quite well. Performance figures and passenger numbers are around all-time highs, and subsidies are around the lowest level since the collapse of Railtrack in 2001.

So naturally, almost everyone in the political sphere, from left to right, is trying to break it again. The recent report from the government’s competition quango, the Competition & Markets Authority (CMA), is the worst of a bad bunch of proposals.

Although some people wilfully obscure it, the structure of the rail network is quite simple. In short, government-owned Network Rail owns and operates the tracks; train operating companies (TOCs) like South West Trains are contracted by the Department for Transport (DfT) to run passenger train services, based on government tenders (“franchises”); and privately-owned freight operators pay a charge to Network Rail to use its tracks.

There are a few complications, of course. Charter trains (steam excursions, football specials) can use the tracks by paying a charge like freight companies do, so long as there’s spare room. And there are special arrangements for services controlled by devolved governments, such as London Overground and Scotrail.

There’s also a weird, hybrid class of passenger train operator, created during the Major government’s privatisation process at the Treasury’s insistence: the “Open Access Operators”, such as Grand Central. These work like charter trains, except instead of using spare room, they are given timetabled paths that take capacity from TOCs. They aren’t under tender to the DfT and don’t have public service obligations, and so can run profitable services without paying the government; as a result, the services they run tend to be cheaper and better than TOC services.

The UK subsidises its railways less than almost anywhere, which means that – although you can pick up bargain off-peak advance fares – peak fares on popular services are high. But this has been true since British Rail, at least (Citymetric pay rates are sadly not quite high enough to warrant the work required to track down per-mile journey rates in pre-WWII days, as fun as that would be). The railway is also running at capacity on many of its popular routes, due to favourable geography, soaring house prices, road congestion, and decades of under-investment prior to the current era.

Together, these factors mean that if you’re a peak-time rail commuter, you probably wanted to punch me when you read this article’s first sentence. When you’re paying a lot of money to spend an hour each way with your nose in someone else’s armpit, the fact that the journey is costing the taxpayer less than ever isn’t much comfort.

If you’re a grumpy left-leaning commuter, your eyes may well turn to the profiteering bastards with their name on your train. Never mind that TOC profits only account for 3 per cent of industry costs; if it wasn’t for those GreatSouthCentralLink bastards, your train would be as cheap and empty and reliable as the Swiss one you once caught on holiday. Abolish them and let the government run the trains!


And if you’re a grumpy conservative commuter, the fault is clearly with the Blairite socialists who brought back British Rail after Railtrack went bust. Fix the Attlee government’s original mistake and bring back the Big Four, running their own private trains on their own private tracks with proper wooden dining cars!

There are politicians on the left and on the right who are willing to lobby each of these views. Both sides are probably wrong, but there are decent arguments in favour of both.

If you’re a rabid Thatcherite ideologue, however, the problem is that the trains weren’t privatised competitively enough. Instead of TOCs, all trains should be open-access, competing against each other day-by-day and train-by-train with no inter-available tickets, like that nice Grand Central train you caught to your meeting in York.

This view is outright silly. As Sir Patrick Brown, permanent secretary at the DfT in the 1990s, said on a documentary broadcast in October 2002: “I don’t think any of us in the Department of Transport thought that open access… could have any part in the privatisation. But you couldn’t say so.” (BBC 4, “Witness to History: Privatising the Railways”.)

The railways aren’t like roads: train and track operators need a close working relationship (whoever owns them); paths are scarce and time-dependent; and boosting frequencies is pointless if trains aren’t turn-up-and-go. It’s worse still for people on less-used routes: the miserable failure of the bus industry outside London shows how badly the “competition plus subsidy for the uncompetitive bits” model works, even without the complications of rail.

It should be very worrying, then – no matter what your political views – that ahead of the Treasury’s rail review, the CMA has published a report which says that the future of rail lies in open access operators.

Like the people who drove the original failed privatisation, the CMA is made up of finance and business people with no transport background. If the government listens to their advice, it will be yet another rail disaster.

*By “British” I mean the system controlled by Network Rail in England, Wales and Scotland. The Northern Irish system is very different and not geographically connected to the rest of the network; London Underground and various regional metro/tram systems are also run and operated separately.

 

Why not like CityMetric on Facebook?

 
 
 
 

Space for 8,000 new homes, most of them affordable... Why it's time to demolish Buckingham Palace

Get a lovely new housing estate, there. Image: Getty.

Scene: a council meeting.

Councillor 1: They say it’s going to cost £369m to repair and bring up to modern standards.

Councillor 2: £369m? Lambeth balked at paying just £14m to repair Cressingham Gardens. They said they’d rather knock it down and start again.

Councillor 1: Then we’re agreed? We knock Buckingham Palace down and build new housing there instead.

Obviously this would never happen. For a start, Buckingham Palace is Grade I listed, but… just imagine. Imagine if refurbishment costs were deemed disproportionate and, like many council estates before it, the palace was marked for “regeneration”.

State events transfer to Kensington Palace, St James’s and Windsor. The Crown Estate is persuaded, as good PR, to sell the land at a nominal fee to City Hall or a housing association. What could we build on roughly 21 hectares of land, within walking distance of transport and green space?

The area’s a conservation zone (Westminster Council’s Royal Parks conservation area, to be exact), so modernist towers are out. Pete Redman, a housing policy and research consultant at TradeRisks, calculates that the site could provide “parks, plazas, offices, cafes and 8,000 new dwellings without overlooking the top floor restaurant of the London Hilton Park Lane”.

Now, the Hilton is 100m tall, and we doubt Westminster’s planning committee would go anywhere near that. To get 8,000 homes, you need a density of 380 u/ha (units per hectare), which is pretty high, but still within the range permitted by City Hall, whose density matrix allows up to 405 u/ha (though they’d be one or two bedroom flats at this density) in an area with good public transport links. We can all agree that Buckingham Palace is excellently connected.

So what could the development look like? Lewisham Gateway is achieving a density of 350u/ha with blocks between eight and 25 storeys. On the other hand, Notting Hill Housing’s Micawber Street development manages the same density with mansion blocks and mews houses, no more than seven storeys high. It’s also a relatively small site, and so doesn’t take into account the impact of streets and public space.

Bermondsey Spa might be a better comparison. That achieves a density of 333u/ha over an area slightly larger than Lewisham Gateway (but still one-tenth of the Buckingham Palace site), with no buildings higher than 10 storeys.

The Buck House project seems perfect for the Create Streets model, which advocates terraced streets over multi-storey buildings. Director Nicholas Boys Smith, while not enthusiastic about bulldozing the palace, cites areas of London with existing high densities that we think of as being idyllic neighbourhoods: Pimlico (about 175u/ha) or Ladbroke Grove (about 230u/ha).


“You can get to very high densities with narrow streets and medium rise buildings,” he says. “Pimlico is four to six storeys, though of course the number of units depends on the size of the homes. The point is to develop a masterplan that sets the parameters of what’s acceptable first – how wide the streets are, types of open space, pedestrian only areas – before you get to the homes.”

Boys Smith goes on to talk about the importance of working collaboratively with the community before embarking on a design. In this scenario, there is no existing community – but it should be possible to identify potential future residents. Remember, in our fantasy the Crown Estate has been guilt-tripped into handing over the land for a song, which means it’s feasible for a housing association to develop the area and keep properties genuinely affordable.

Westminster Council estimates it needs an additional 5,600 social rented homes a year to meet demand. It has a waiting list of 5,500 households in immediate need, and knows of another 20,000 which can’t afford market rents. Even if we accepted a density level similar to Ladbroke Grove, that’s 4,830 homes where Buckingham Palace currently stands. A Bermondsey Spa-style density would generate nearly 7,000 homes.

There’s precedent for affordability, too. To take one example, the Peabody Trust is able to build genuinely affordable homes in part because local authorities give it land. In a Peabody development in Kensington and Chelsea, only 25 per cent of homes were sold on the open market. Similarly, 30 per cent of all L&Q’s new starts in 2016 were for commercial sale.

In other words, this development wouldn’t need to be all luxury flats with a few token affordable homes thrown in.

A kindly soul within City Hall did some rough and ready sums based on the figure of 8,000 homes, and reckoned that perhaps 1,500 would have to be sold to cover demolition and construction costs, which would leave around 80 per cent affordable. And putting the development in the hands of a housing association, financed through sales – at, let’s remember, Mayfair prices – should keep rents based on salaries rather than market rates.

Now, if we can just persuade Historic England to ditch that pesky Grade I listing. After all, the Queen actually prefers Windsor Castle…

Want more of this stuff? Follow CityMetric on Twitter or Facebook.