Welcome to this morning’s evidence session, which is the first of our regular evidence sessions with a Rail Minister in this Parliament. We are covering rail services and infrastructure today. We have quite a lot to cover. Thank you very much for coming. Would you like to introduce yourselves?

I am Alan Over, and I am director general for major rail projects.

I am Conrad Bailey, the director general for public transport and local.

I am Peter, Lord Hendy of Richmond Hill. I am the Minister of State for Rail.

Good morning, I am Alex Hynes, the director general for rail services at the Department for Transport.

Great. Minister, you have extensive experience in railways. How does that background inform you in your new role as Minister for Rail?

The first thing I should do is congratulate you and the Committee on acceding to these valued places. It is very kind of you to say I have extensive experience. I am very pleased to be here. I hope to bring that experience, such as it is, to the Government’s policy and delivery for the national railway network.

We usually ask Ministers this question: what is your vision for the railways by the end of this Parliament, in the next five years? I guess that that is but the blink of an eye in the history of the railways.

The railway system does not function in the way it should. We are quite clear about that and I think the public are clear about it. The railway deserves to be more reliable. It should generate more revenue and cost less. You referred to my experience. I was the chair of Network Rail for nine years. For six of those we were waiting for rail reform. It didn’t happen with the last Government. This Government are committed to reforming the railway. I am very pleased to be part of that process. By the end of this Parliament, we should have a railway that is more coherent, serves passengers better, costs the taxpayer less and generates more revenue. Those are worthy objectives and I believe we can get there.

Thank you.

Last Friday, there was an industry-wide incident relating to the GSM-R radio system. Are you confident that the rail network is well prepared for system-wide outages or issues of that nature in future?

I am familiar, as a lot of travellers are, with the outage last Friday. I checked how badly it affected travel. I think the publicity was somewhat in advance of the actual effect. Many trains were a few minutes late, but it didn’t seem to affect the service as badly as was portrayed. Alex, do you want to say more about it?

It was a failure of the system to auto-register, so drivers had to do it manually. This is the system that enables drivers and signallers to talk to each other. Network Rail has already done a lessons learned with its suppliers and will implement the recommendations from that. I spoke to Andrew Haines, the CEO of Network Rail, on the topic yesterday.

Do you think that there are any wider learnings about the resilience of the system—not necessarily GSM-R but the system as a whole—to things like cyber-attacks? How confident are you that the industry has good plans to deal with those sorts of challenges?

It is—I am trying to find the right word—quite a dispersed system. There are very few systems that cover the whole railway in the way the radio system does, and what Alex described is very exceptional. The signalling system is a mixture of technologies, and a mixture of ages of technologies. I think the experience is that the railway system is actually quite resilient, but we are not complacent. The cyber-attack on Transport for London has been very serious and has gone on now for a long time, and there are clearly some lessons to be learned. It is right that the railway industry should learn them. I don’t know whether any of my colleagues want to add anything to that.

Only to say that cyber-risk is obviously up there on our risk register and the Department works with the industry on managing those risks. Given the nature of the threat, that is probably best dealt with in private, rather than in public.

Rebecca, do you want to come in?

In a way this should probably be our last question because it is about Christmas, and that tends to be how we head out of the door, but we don’t want to miss it, as it is important. We have had disruption with the weather, which we cannot do much about, but, historically, rail services at Christmas are massively disrupted because it is, I recognise, a great opportunity to do work on the track. Given the push across the whole country to ensure that we use trains more, a real lack of service at Christmas clearly forces people into their cars when they could be using rail and things like that. What reassurances can you offer rail travellers that the work being done over the Christmas period is absolutely essential, and that this will potentially get us to a future position when it will not be as necessary to getting the work done that needs doing?

I certainly won’t bore you with my detailed knowledge about what is happening at Christmas, but you are right to recognise that Christmas is a good time to do major engineering work, because demand is lower for several days. We have a very detailed schedule for it, and I am already familiar with it. There are two aspects, one of which is whether the work is going to finish on time. I was not at Network Rail at Christmas 2014 when it famously failed to finish on time outside King’s Cross, but the lessons of that were very severe, and the rail industry, Network Rail in particular, have worked extraordinarily hard not to replicate that, because it was disastrous for passengers. The other feature is staffing of Christmas services, which is something I have been talking about with Alex a lot recently and I will continue to, up to and during Christmas. We are concerned about that, with regard to several train operators. It is exacerbated by the fact that inevitably closures in parts of the railway put more pressure on others. Maybe I should turn to Alex to talk in more detail about what we are worried about, and what we are doing.

Obviously, if we want to make the railway better, sadly we sometimes have to close it. Some of the big engineering work happening at Christmas is just to do that. The electrification of the midland main line, for example, means a closure there. We are building a new high-speed station at Old Oak Common, which means that sadly we have to close the Great Western main line. In that scenario we have worked with the operators, Network Rail and Great Western Railway, to divert services into Euston station so we can keep passengers on trains rather than putting them on rail replacement buses. It is probably also worth saying that, of course, the vast majority of the rail network is open this Christmas. Customers should, obviously, check before they travel, but most of it is open. No trains run on Christmas day and very few run on Boxing day, so it is a golden opportunity to get in and do essential work without disrupting passengers. We have to recognise that we have the oldest railway in the world. We have to carry on renewing it, and Christmas is a great time to do it, but certainly the passenger handling of those closures is right at the top of our agenda. The industry has established its strategic co-ordination team, which is Network Rail, working with the train operating companies and the Department. It meets twice weekly to make sure that we manage issues as they arise.

What have you done about increasing capacity on the lines that will close, so that in the last few days when people need to travel there will potentially be enough space? I am sure that we have all been on trains at Christmas where it is standing room only. You have that team meeting twice a week: is increasing capacity part of the solution?

It is, as is looking at how forward bookings are working. This week we have been reviewing, in the Department, the forward bookings for Great Western, LNER and Avanti. There is still plenty of capacity available on Avanti. Where the resources are available, train operating companies will provide Christmas extras, but as the Minister says, as a system we are generally over-reliant on overtime working for train crew. That is a risk that may be worse at Christmas than at other times, so we need to make sure that we have the infrastructure, trains and crew to operate additional services. That may or may not be the case, but certainly operators are well placed for the Christmas dash. Christmas falls on a Wednesday this year and we are expecting the Christmas getaway to be perhaps a wee bit smoother than in other years.

Thank you. Let’s move to rail reform.

Thank you. Rail nationalisation is a thing. I think we are all interested in the detail of the timing of the steps that are being taken and, in particular, what preparations are under way for bringing operators like South Western Railway into public ownership. More broadly, what difference can passengers of publicly owned rail operators like Northern trains expect to see, and when?

The Secretary of State made the announcement about the first three train operators last week: South Western Railway, c2c, and Greater Anglia in the autumn. Preparations to do that are continuing in the Department. We can talk a bit about what those preparations are. The purpose of public ownership is as part of rail reform. It is not an end in itself; it is a means to an end. First, you would, as we do, want it to be smooth at the point of transfer, and you would want passengers not to suffer any detriment because of it. Subsequently, taking these operations into public ownership will lead us into a position where we have more direct control and can begin to implement some of the aims of rail reform, which are to make track and train closer together. There is every reason to do that. The programme has to be smooth because there is quite a lot of administrative and managerial work to do it. We are looking to transfer the train companies progressively over the next two to three years. We have to leave a bit of room—a bit of space and capacity—for the possible eventuality that one or more of the existing franchises performs so badly as to fail the contractual test, and will have to be taken back. There has been a lot of debate. I had a lot of debate with my colleagues in the Lords about the sequencing of that. Sadly, what are generally accepted to be the two worst performers in private ownership are last in the sequence of dates. We will see; we have to leave ourselves some space for that. Alex, do you want to say some more about it?

The Department has geared up already to deliver the public ownership transition programme. We have a director responsible, with lots of resources to make sure that we are well equipped to deliver this rolling programme of public ownership. We have 10 train operating companies to return to public ownership in the course of the next three years, so the Department needs to resource itself for that, and we are doing so. The second issue is the capability of the DfT Operator limited company, which of course will become essentially the new owning group for these businesses. It is in the process of rapidly increasing its capability and capacity. Historically it is a very small company, but its headcount is going from 25 to 100 by the end of next year, so it will have the ability to own and improve those organisations. Improvement is critical, particularly at South Western Railway, where we think performance could be better. As the Minister says, public ownership is part of rail reform because ultimately we are going to integrate track and train and have a directing mind for those bits of the railway.

In my constituency, Greater Anglia is pretty well regarded, so you are bringing in a good one. Of course, there is already some good capacity inside the operating company because of the improvements we have seen in the railways that are already publicly taken over. My two supplementaries would be to ask whether there are plans possibly to bring some of the franchises into public ownership before their contract end dates, and whether there is any legal risk around that. To push you on the really vernacular changes, let’s imagine I am a customer of Greater Anglia, which, for the record, I am, and I am already pretty happy; what things will I see, do and experience that are not possible under private ownership, but which you hope would be possible under the new structure?

On the contract end date point, the Government are quite clear that they do not want to expend any money on this. We don’t want to compensate people for broken contracts, or contracts terminated prematurely, so the programme is carefully organised so that it does not prematurely terminate contracts, except in the case where the performance is so poor that we should do something about it. We do not, of course, expect competently-run train operators to get worse. We expect improvements in performance, as Alex says, from those we believe can perform better. The performance of the four that are in public ownership already is not particularly a guide to the performance of those that will be brought in, if only because those four were all brought in under circumstances of distress, either performance distress or commercial distress. That is not necessarily the case with the 10 that are coming. One of our objectives is to get track and train closer together. I doubt whether there is any disagreement in the room about the desirability of doing that. The friction cost of the contractualisation of train operations is quite considerable. We believe that there are serious savings to be made in terms of management, better performance and reduced cost. Of course, public ownership will enable that to be done. As one of my personal objectives, I would like to see somebody actually responsible for train operations, staff, rolling stock and infrastructure. I am not familiar with that on the national railway system, because of 30 years of balkanisation, but in my previous career at Transport for London it was self-evident that if something went wrong with the underground you could summon the managing director and say, “Let’s fix it.” We have that opportunity coming, and my ambition is to get there as quickly as possible, because that will enable a better service for passengers, more reliability, reductions in cost and a management more capable of addressing the generation of revenue, which is all good for the railway.

But public ownership in itself is not the golden ticket, as people keep reminding us; there are public ownership and nationalised rail systems in other countries that are not delivering in the way your vision has described. What are the risks of nationalisation and what are you learning from other countries to ensure that the same does not happen here with GBR?

Clearly there are risks in the process of taking over these operations. As Alex described, we are boosting up what was called the operator of last resort, which is now being called DfT Operator, because it is not the last resort; and the transfer has to be done carefully and sensitively, and so as to preserve the existing performance of the railway, with a view to improvement. As to the position of other publicly owned railways across Europe and the world, some of their histories are very different. Deutsche Bahn used to be held up as a brilliant example of a well-performing railway. It is far from that at the moment. A lot of it is about management. Some of it is about funding. One of the opportunities here is to bring on a new generation of managers who understand much more completely the whole business of the railway. The balkanisation of the railway for 30 years has created a generation of people who are largely only familiar with either the operation or the infrastructure; sitting to my left is a gentleman who ran Scotland’s Railway, and ran both. He was a Network Rail employee when I was the chair. We watched Scotland’s Railway being very successful because of those functions being brought together. I think there is quite a lot of learning in that process. I am sure Alex will tell you if I say anything he does not agree with. I think that is a good model.

I appreciate your candour so far. It all makes sense to me, and the opportunity to debalkanise, from a management structure point of view, plainly makes sense in itself. I guess I am thinking about people who watch this hearing and who use the railways, given all the wild assumptions that come to mind when you think about nationalisation. Is there a hope that there is a de facto customer experience benefit to all this, even in Greater Anglia’s case, and what might that be?

Absolutely. The railway has to run better. The previous Secretary of State was determined, as is the present one, to improve the performance of the railway, so very early on she summoned the managing director of Avanti and the Network Rail route director to talk about performance. Since then, I have seen several pairs of people in my office, talking about what they contribute to passengers’ experience of using their railway. Those sessions have been very revealing. In one, one of the parties gave a very optimistic account of how closely they worked together, while the other person shook their head in disbelief. Those two people were together providing a train service for a significant area of the country. I won’t say where. That was very revealing to me, and it showed me that you need managerial coherence to produce the output. The infrastructure is one thing, and it fails occasionally. Alex has already talked about the levels of staffing and I am sure we will talk about them again, but you want somebody to be in charge of this lot, to balance the thing, so that the service to passengers is the best it can be. If we don’t achieve that, none of this will be worth it, will it?

I have two quick questions. As a user of LNER, I know that we are already part way through the process. For me, LNER is a fantastic service and I want more services to be like that, but of course not all the services currently in public ownership are running as well as LNER. In the interim period, as we bring the operating companies in-house, if you like, what lessons can we learn from the ones that are already in the stable?

You are absolutely right. LNER is widely acknowledged to be a very good service. We will, I am sure, talk about Northern trains here more than once. I had one of the sessions that I described with the management of Northern trains and the relevant Network Rail route director. Simply getting to the bottom of the number of industrial disputes that they had and were managing was a complete revelation to me. One of them is so old that it started before the limitation on strike ballots. It started in 2017. There is a huge amount of work to do. There is a big difference between the previous Government managing these things because they had fallen into their hands and where we are now, which is trying to transform them into a decent service. There is a hell of a lot of work to do and one of my lessons from this is that railway management can become seriously distracted and not address customers, because of the underlying difficulties of performance in doing what they are supposed to do. Alex and I and many others have put a lot of effort into these companies, and it is not finished yet. We sorted out the drivers’ issues at Northern. Some of the conductors’ issues, especially in north-west England, are proving intractable. We are determined to do it, because if you cannot operate a reliable service, what is the railway for?

That seems like a cultural issue, rather than a systems issue, which is quite difficult to tackle, I guess, so good luck. You’ve been speaking, if you don’t mind me saying so, in quite subjective terms about the need to improve the railway, and greater revenue and better customer experience. As we go through the process, will there be KPIs that we can measure success against?

Absolutely right. The way in which we are thinking about rail reform is to have a strong Passenger Standards Authority that will champion the needs and rights of passengers, and for the railway to address its performance for customers by the use of metrics, and account for its performance on a regular basis. That is essential. I have an ambition, which the previous Secretary of State shared—I think the present one does too—that the railway will publicise its performance on a regular basis to its customers, on its stations. I want not only to publicise what has happened, but a commentary from the people in charge saying what they are going to do about it. I think those are reasonable entitlements. We are working towards that now, and it can happen well before we get to railway reform.

Thank you.

Do you still have a question, Olly?

A lot of people in the rail industry feel, and say, that one of the reasons why the rail industry has not been making progress is micromanagement on all the wrong things from the Department for Transport, and a lack of leadership on the right things. Is that a characterisation you recognise and, if so, how will GBR avoid, in the reform, even more centralisation and micromanagement?

I will turn to Conrad in a moment. Philosophically the railway is very close to Government at the moment. I have not had such detailed information or interest about a series of industrial disputes in—crikey—10 years. You are right that a consequence of the way the railway was run through covid has been the Department taking detailed decisions, because it is public money. The intention for GBR is that there will be a strong public body accountable to the Secretary of State but one step away from her, and that the railway will be run as a coherent whole, which will need less attention from Ministers and the Department.

On your point about the post-covid world, it drew the Department much more into the railway. At the heart of the philosophy of creating GBR and, indeed, moving to public ownership, is the need for the Department to change fundamentally. We need to see a level of detailed engagement with the railway, going back to the railway’s leadership—to GBR. Just prior to the election, with Alex’s arrival, we began the process of separating the bit of the Department that focuses on the operational railway, which, in time, will be part of Great British Railways, and those bits that need to provide the strategic direction and support Ministers, which work to me and Alan. We are already on that journey, but we need GBR to be established to set it out in such a way that GBR can act as an integrated directing mind. If it always comes back to the Department for Transport, we will not be able to deliver the benefits we need to deliver, both from the perspective of the railways leadership and because we need much greater influence and engagement between the railway and our local partners, whether those are mayors or other local authorities, to make sure that the railways deliver what people need where they live and in the places they travel to for education, healthcare and jobs. At the moment the railway is too detached from the localities it serves.

Can I add one more thing, if I may, to Conrad’s helpful remarks? This railway is so difficult to manage that a vast number of people in it spend all their time trying to make it work, in a complex matrix of contracts. To be successful GBR has to lift its head up and look at what passengers and freight want, and address the country’s needs. The railway is not an end in itself. Connectivity drives economic growth, jobs and housing. One of the things that is missing is the railway addressing those needs through better performance much more successfully in the future than it has done in the past. I feel very strongly about it. I spent nine years at Network Rail adding the first paragraph to documents, which is not how it works but what it is for. You are all here because of what the railway delivers for people. It is really important that we re-establish that focus.

I want to follow up on the comments you made, Minister, about wanting the new body to be arm’s length. Perhaps the last deliberate attempt to set up an arm’s length structure was the Strategic Rail Authority. It is fair to say that that independence, because circumstances changed, came to be seen as a problem in Westminster and Whitehall. Could you comment on what lessons have been learned from that historical experience, and how confident are you that a similar dynamic can be avoided this time?

Yes, you are right. The SRA was not successful. In the end the Government curtailed its independence because they wanted more control over it. I ran Transport for London for nine and a half years for two Mayors; I chaired Network Rail for nine years. If you are in that position, you should never forget that you are appointed and you are reporting to people who are elected. They change from time to time; their attitudes change, and what they want from you changes. It is quite feasible to have a public body that is attentive to the needs of Government while taking responsibility for delivery itself. I don’t think it is always easy. My hair was a very different colour when I started at TfL 18 years ago, but it is really important for the people who do those jobs to remember who they report to and what they are there to do. I wouldn’t go into either the personalities or the detail, but I think it is common cause that the SRA got rather a long way from the Government it reported to and, in the end, the Government decided they would rather do its job themselves. I don’t think that is terribly helpful.

Thank you. That’s useful.

To add a point directly on the SRA but also on our learning, we spent a lot of time, as we have been thinking about reform, looking at the lessons from the SRA. It felt like a structure that did not have the flexibility to adjust to the times, as Lord Hendy said, so we spent a lot of time thinking about the governance and accountability structures and how we make sure the body is both able to lead the railway and be responsive to ministerial and parliamentary needs. We also looked at other reform programmes. For example, we looked at the NHS reforms of the early 2010s to learn some of the lessons. We spoke both to those on the NHS side and those on the Department of Health side, so we have tried to understand how you build sufficient flexibility into a structure while making sure that it can function clearly and the accountabilities are clear.

If you mean the Lansley reforms, many people would say they would be an example of how not to do a reform.

We looked at the reforms from the perspective of what has worked and, absolutely, what hasn’t worked.

That’s good to know. Let’s move on to GBR.

This is a really serious change to the structure of the railway. In order to do what we want, we have to have a profound change in the way the railway works. In particular, there are issues about access and charging that will be matters of legitimate concern, if only because there will continue to be commercial operators on the railway. Those are two examples of what we will consult about so that all the interested parties can understand how the railway will work in the future, how it might affect them if they are a business and how it will interact. Conrad has already mentioned the interaction with combined authority mayors, devolved Administrations and so forth. That too will be consulted on, because we have to get their involvement in the railway right if we want it to work for them, their constituents and the railway itself. Those are examples of what is in the consultation. Conrad, do you want to say some more?

As the Minister said, we need legislation to establish Great British Railways and to establish the Passenger Standards Authority. We will be consulting on how we go about establishing Great British Railways so that it can deliver the things that the Government set out that they wanted to be able to deliver: a reliable, affordable, efficient, high-quality, accessible and safe railway. We will be consulting on how we establish the Passenger Standards Authority and how that brings together functions that are currently in Transport Focus, the Office of Rail and Road, the regulator—some of their consumer functions—and the rail ombudsman. There will be a one-stop shop for consumers who may have concerns about the railway, as well as a body that can hold Great British Railways to account for caring about the consumer. We will talk about how access to the railway is governed for GBR operators for those belonging to the devolved Administrations, and for open access and freight operators. We will be setting out the consultation there. We will aim to get views from a wide range of interested parties, not only those in the railway but, critically, those served by the railway, because the piece around devolution is at the heart of it, in order to introduce the legislation during this parliamentary session.

The Bill was in the King’s Speech, so we would expect it to be introduced this parliamentary session. As soon as we have the Bill through Parliament and we have had Royal Assent—it is not for me to judge how quickly it will go through Parliament—we will want to set up both GBR and critically the Passenger Standards Authority as quickly as possible thereafter. There are certain things you cannot do until you have Royal Assent, so there is a period when we would expect there to be a gap, but very much in the course of this Parliament.

Lord Hendy, in your answer to my earlier question about the challenges ahead you focused on some of the cultural issues, the relationships with trade unions and disputes. Is this consultation a chance to work closer with the trade unions to try to get a better workplace for them as well? I think the TSSA wrote to all the Committee members yesterday, following the death of a worker on the Elizabeth line last week, highlighting some of the risks staff face every day in their interactions. Can this consultation be a starting point for better relationships and a better, safer workplace for staff?

I should say on behalf of all of us that the death of any serving rail member of staff is a tragedy.

It is sub judice, so be very careful what you say.

That is all I was going to say, but I think it is important to say it. It is clearly a tragedy. The consultation itself is about the content of the future Bill, but your question is about the wider climate of employee and industrial relations on the railways. I think there is a real opportunity there. One of the things the previous Secretary of State did very early on was settle two major pay disputes with the two major unions. That was the right thing to do, because employees—railway staff—had been very unhappy, and the consequence of the dispute devastated levels of service, which is clearly unsatisfactory. There is a real opportunity going forward to work with the staff and trade unions rather than against them, which was the climate in the previous Government. That does not mean we will unnecessarily concede things that will cost money, but it does mean that the people who work on the railway, and who contribute a huge amount to customer satisfaction and see the railway at work day to day, can and ought to be involved in its future in a way that has not happened. One of the most common things I saw in my time at Network Rail, which itself in railway terms is a pretty transitory body—only 20 years’ worth, and it took over from Railtrack, which had a terrible reputation and a rather short life—is that on the operating front most people with any length of service have worked for more than one set of management and more than one apparent company, and the staff themselves have far more stability than the organisations for which they have worked. That is not helpful for industrial relations and it is not helpful for the performance of the railway. One of our intentions should be to make sure that there is stability and we can get on with dealing with the workforce and their representatives in a more collaborative way.

I want to pick up the thread from Baggy’s questions about the forthcoming legislation. Obviously, we have the previous Government’s draft rail reform Bill in the public domain. How much of the new legislation is likely to be carried over from the previous work by the former Government, and how much material should we expect to be new?

I am not convinced that the previous Government ever really intended to enact that. The consultation process put something in the public domain that looked as though something was going to happen. Indeed, my last appearance at the previous Committee was to discuss that, and it was either on the day, or the day before, the election was called. Of course, it never went anywhere. This is a more comprehensive proposition to reform the railway than that Bill represented. Conrad can probably comment more than I can on the level of work now going on to produce a comprehensive reform of the railway. Some of it will be the same. The name Great British Railways will be adopted, but this is more comprehensive and far-reaching, and I would say that it is going to be more successful.

As officials, we learned from all the feedback we got on the previous consultation. We have thought about that, but, as Lord Hendy said, this is a fundamentally different piece of legislation. We have a Passenger Standards Authority. That was not something that was considered previously and it changes the role of the regulator. I think we have much greater clarity around the role of GBR as a directing mind, not a guiding mind—another difference—and that changes how you think about the accountability structures for GBR and its relationship with the Department for Transport and the regulator. Those are examples of where I would expect this consultation and subsequently the legislation to feel quite different, but clearly we will make the most of the feedback on the consultation previously and will reflect on that in our thinking about the new legislation.

We heard from the now previous Secretary of State recently that a lot of work had already been done in opposition on the design of GBR. What decisions are still being made? What I am trying to get at is not so much the matters of implementation that are being worked on, but the policy decisions that are still being weighed up as you develop that legislation.

The advantage of this Government is that the Labour party produced a very substantial piece of work before the election which clearly set out a number of details of where it wanted to go. That is helpful, because it must be much easier to turn that into legislation and then into the organisation we want than it would have been if it had not existed. I started by referring to the detailed matters of access and charging, simply because there is a lot of detail there and a lot of that has to be understood during consultation by the people who will be affected by it. Conrad, I think it is fair to say that we are having a lot of discussion to make sure that when the consultation goes out it is substantive enough for people in the freight sector, the open access sector and others who need to know to understand what we are proposing. Is that fair comment?

That is exactly right. We need it to be a consultation that people can properly engage with and give us their thoughts and feedback. Obviously, we have based our work very much on the clarity that the incoming Government gave us through the “Getting Britain Moving” document published in opposition.

I am keen that we get through the whole spread of things, so if you could keep your answers brisk and to the point, I’d be very grateful.

The GBR transition team was a creature of the previous Government’s desire, or stated desire, for reform, but latterly it turned into a body that was pursuing separate and individual workstreams, some of them very useful—fares, ticketing and so on. Shadow GBR is chaired by Laura Shoaf. I am sure she is not known to many of you, but she will be shortly because I think she is coming to talk to you. We don’t need to wait for GBR to do quite a lot of things. Between Alex’s part of the Department, Network Rail and what was the operator of last resort, which is now DfT Operator, there is a substantial body of work and knowledge on the railway that can be harnessed to lead some of the changes we want to make now, in particular a cultural change of bringing people together. This will be an enormous change to the philosophy of running the railway. I am completely supportive, as the previous and current Secretaries of State are, of starting the work on the culture of the railway to make sure that, as we bring it together, it operates in the right way and the contractual shackles are set to one side and people genuinely work together to produce a better service.

She is doing one or two days a week. She sits with Alex, Robin Gisby from DfT Operator and Andrew Haines from Network Rail, and together they are working through a programme of work to address the issues I have described, as much as is possible in the current organisational circumstances. We don’t have to wait for GBR because, as Conrad said, it cannot be set up until the legislation has got a long way through. We can establish its culture and the means of working together now. I think that is a really valuable thing to do.

Currently, it has to be the powers of the individuals: Alex’s responsibilities as director general, Robin Gisby as chief executive of DfT Operator and Andrew Haines as chief executive of Network Rail. That is where the power is, but you can bring it together and make things happen regardless. We are not setting up another organisation in advance of GBR because we couldn’t; we need the legislation to do that, but we can get collaborative working together and that is what this is designed to do.

The plan is that it will feel smooth, but because of the legislation, you are waiting for us in Parliament, and you yourself, to do the formalities.

Indeed. This is a really substantial change and the legislation is a big piece of work, but we don’t need to wait to work out how to make it work in detail. Indeed, there is a lot we can do. We own four of the train companies already—by the end of next year we will probably have seven—so why don’t we introduce some of the culture of collaborative working, working together for the benefit of better performance, reduced costs and increased revenue? Why don’t we do as much of that as we can on the way? That is what Laura, Alex and his two colleagues are there to do.

It has to evolve; I will turn to Conrad briefly. There are some things going on that are really useful. Fares and ticketing work is one of them; another is the production of the first proper profit and loss account for the whole of the British railway system for 30 years, broken down into individual pieces. Clearly, that is a useful management tool if you can run the railway in an integrated way. That work is neither wasted nor will some of it stop. Conrad, do you want to say a little more?

We are currently discussing with Ministers exactly what happens to GBRTT in detail, but, as the Minister said, a lot of the functions and people in it are absolutely vital to the reform journey, on fares and ticketing, on profit and loss, and understanding what is happening to revenues across the system so that we can get that insight. We certainly anticipate continuing to fund that activity over the coming years.

Let’s move on to passengers.

If all this stuff works, will it one day bring about cheaper tickets and more trains, or is it just about making the railway less rubbish?

Gosh. There’s a prejudicial description. The first thing to do is to make the railway run reliably. It is not reliable everywhere every day. We all know that it could be better, and that is a primary intention. Fare levels are a product of some political choices about the balance of the cost of the railway paid by fare payers and taxpayers. Fares have generally risen by about the rate of inflation for many years. The cost of the railway is no secret. Following covid, the net cost of the railway is more because the revenue is depleted and costs are currently running at the same level, so there are some big things to attack well before you go on to say we want it to be better, but of course we do want it to be better. We want the services better to fulfil the needs of the people who use the railway. My belief and that of the Secretary of State is that the GBR methodology is much more likely to produce a more coherent service addressed to the needs of customers than it would be without. There are some limitations on railway capacity. Parts of the railway are very full of trains. The methodology for establishing the best timetable is extraordinarily clunky at the moment, and nobody really has control in the end over deciding what to do, as can be seen by the saga of the east coast main line timetable. All of that could be better. I think those are worthy objectives to start with, but I also think that the consequence of GBR will be to address the needs of passengers and freight better in the future than has been done in the past.

You have a chunk of money coming out of tax because it is costing more to run the railways than fare revenue. That has gone up because, rightly, you wanted to prop up the railways after covid. Lots of these improvements could potentially bring in extra revenue. From what you are saying, it is a political choice about whether the fares then come down because Government see the value of service super-charging a growing industry of rail passengers.

There is always a choice, but a better and more reliable railway will itself produce more revenue. People are much more likely to travel if they believe that the service is reliable. One of the reasons for solving the recent industrial disputes was that those disputes were damaging people’s confidence in the railway and the railway’s revenue. We moved fast to fix it because that was the right thing to do.

I guess that the incremental cost of, say, putting on an extra train at the end of the day is not quite as simple as dividing the cost of each journey and just adding a cost to it.

Never.

There could be some benefits in terms of frequency and timetabling that are quite cost-effective to achieve.

Always.

With the timetable changes on Sunday, many operators are adding additional services because the railway is recovering, in particular, as the Minister says, since the resolution of the longest industrial dispute we have ever seen on the rail network. We are about 85% of pre-covid journeys, and therefore revenue, at the same prices. Revenue is coming back quite strongly in some parts of the country. That means operators can meet the demand with additional services. Whether or not the services cover their costs generally is a function of where in the country they are. That is something we manage in the Department. The Minister mentioned the east coast main line timetable. Dr Arthur earlier mentioned the fantastic service that LNER offers. We are working on a new timetable for the east coast main line. The industry has made a recommendation for an improved timetable, and Ministers are currently looking at that. As the post-covid market bounces back, operators working with the Department need to meet that demand because, frankly, we need the money.

You mentioned LNER. Do you have any comments on its fare simplification? Was it LNER?

Yes. Do simpler fares mean more expensive fares?

Absolutely not necessarily. Passengers want simpler fares; people don’t understand the way the railway works. The LNER fares proposition was designed to make it simpler. I don’t know that it’s an experiment; it’s a trial, I think, and it is taking some time. Alex, do you want to say more about it?

Conrad can come in on fares and ticketing, particularly from the single-leg pricing trial. Essentially, LNER is trying to make fares and ticketing simpler because the complexity in itself is a barrier to travel. LNER is one of the operators that has seen one of the strongest post-covid recoveries in journeys and revenue. This is one reason why fares and ticketing reform is so important, because it is a generally well-held belief that the complexity itself, not just the price paid, is a barrier.

On the LNER trials, it is still very early days for the feedback we are getting from consumers and for our understanding of exactly what is coming out. The emerging position appears to be that customers have welcomed the simplification and that it has delivered. We are trying to look at two areas of improvement to the ticketing experience for customers. LNER is an example of what we are trying to do on long-distance routes, working with operators to see whether we can simplify options. The other thing we are doing is trying to introduce pay-as-you-go for commuter and nearer-in journeys. We had a further roll-out of pay-as-you-go in the south-east which was due to happen earlier in the autumn. Sadly, it was one of the issues that was impacted by a cyber-attack and cyber issues in TfL, but it should be back on track and should now happen early in the new year and there will be further phases of that flowing through. We are also working on business cases with both Greater Manchester and the west midlands to trial pay-as-you-go to bring more of that London-style experience to those areas, as well as mobile pay-as-you-go trials which will allow us, hopefully, to spread some of the benefit you have if you use TfL in London to a much wider part of the country. We are looking at how we can do that. When you do pay-as-you-go trials you also get to simplify the fares. That is a real bonus for passengers because it makes it so much easier to understand what is going on when you are buying a ticket.

On fares, there is a bit we have not asked about yet. Obviously, there is a market for ticket splitting on current routes, but my understanding is that at the moment you basically don’t get to benefit from those. For example, on CrossCountry, going up the west coast, you can split the fares and get a reasonable discount; if you are going across the country on Great Western you generally do not benefit in the same way from chunking out your ticket and getting something cheaper. Is that something you will look at as well, because it feels a bit like a postcode lottery? Whether you benefit from those creative solutions depends on where you happen to live and who is running the train line.

It is part of the complexity and the reason people don’t like this thing; it is quite hard to understand why these things should apply in some places and not in others.

It really cannot make sense, can it, that you want to go from A to C and you buy a ticket from A to B and B to C? Part of our ambition for simplification is that split-ticketing is not something you need to do as a passenger, because it just adds complexity and confusion to your journey. The good outcome is that there is no consumer benefit from doing that and that is very much the sort of thinking we would be doing.

Another issue of split-ticketing is that, as I understand it, it somewhat messes up the data on how people are travelling. That is another disadvantage of it.

Absolutely, and it is massively inconvenient on a practical basis.

In the previous Parliament, the GBR transition team was preparing a long-term strategy for rail. What became of that, and when do the Government plan to publish the strategy they want GBR to work to?

The team from GBRTT that was working on that is now working very closely with my director of rail strategy. We are pulling together some of the learning from that previous work because the railway remains the same and we are advising Ministers on how we take forward a long-term strategy. Clearly, that long-term strategy is to inform GBR, which is still some time off. I would expect it probably to be published once legislation starts to move forward a bit, but we are definitely working on it.

Is there any timescale for that?

It is a matter we are still discussing with Ministers.

We talked a little bit indirectly about the role of railway infrastructure and growth. Lord Hendy, I know we talked a bit about this in a previous meeting. How will that strategy look at some of what was being done before, whether it is under the same title or not, such as the restoring Britain’s railways programme, particularly around the growth agenda of housing and planning? Ultimately, we don’t want all the new homes to be built on the main line; we want them to be built on branch lines, and things like that. Is that likely to form part of that strategy? A sub-question is: what role will passengers have in developing that strategy? You have talked a lot about the passenger charter, or whatever, but obviously passengers get given the service that has been decided on. Are we going to look more strategically at what passengers want, which then links into the housing and infrastructure piece?

On the first point, the new Secretary of State has been there for nearly two weeks. I have had three discussions with her already about making sure that the Government’s ambitions on housing and job creation are linked, as far as possible, into what the Department does generally, in particular with rail. There are some good pointers to that—for example, some of the good work that has been going on with Network Rail Property and LCR to develop railway land on and around stations. It is an obvious place to put housing density, but there is far more that can be done. One of our ambitions is to link how we develop the railway and its strategy with the Government’s growth mission on housing. I am sure that when she comes in front of you she will speak eloquently on that subject, as she has done to us already. I am expecting the strategy to relate strongly to the wider Government targets for housing and industrial development.

For passengers, we will work closely with bodies like Transport Focus to make sure that we have passenger insight. The other thing we will want to do is take the integrated national transport strategy that the previous Secretary of State launched recently and make sure that we are really thinking about people’s journeys. Very few people’s whole journey is on a train, so it is making sure we get the link between the place people need to travel from and the place they need to travel to. That link with the local will be—

With rural communities as well.

Absolutely. It will be absolutely key. As Lord Hendy said, we are working very closely with colleagues in MHCLG to make sure we have that link.

Sticking with strategy, open access, particularly freight, is not included in GBR, so how will we be assured that they will get adequate priority in terms of their aspirations in the context of GBR being the overall controller of rail?

One of the reasons for the earlier discussion about what is in the consultation document is to make sure that the rules of access and charging for the railway infrastructure are suitable for those operations. The Government have acknowledged the use of open access in developing services that would not otherwise have been developed on the railway, and that emphasis will continue in the right circumstances. There will be a target for freight growth. We are particularly concerned to engage the freight community in that. The freight market has changed radically in recent years. The demise of coal and some of the reductions in the transport of basic materials have been offset by increases in containers, building materials and so forth. It is important that we develop that, so part of the strategy will be to have a freight strategy and some strong actual resource in GBR that will be developed from the resource already in Network Rail to support the freight community. You are right that both of those are equally important in developing the whole railway because they are part of what the railway offers for the growth, jobs and housing agenda.

It is good that this Government’s strategy on freight is more ambitious than the previous Government’s, but I am picking up a number of issues around network capacity, particularly at certain junctions—HS1 into the main system and Ely junction depot—which are constraining the ambition to grow freight. Freight does not mean just heavy goods and building materials; it also includes logistics, a potentially growing sub‑sector. What is the ambition for addressing the network constraints, particularly the specific junction ones?

Freight is clearly a dynamic market. I saw Varamis. You might have seen them before. They are the people who probably best express the ambition for transport of just-in-time parcels and logistics. Each of the current and potential operators has specific needs for the railway. One of the reasons for the freight unit in Network Rail, and why GBR has to have a strong freight unit, is in order to work on the granular issues to develop the railway so that it is capable of carrying the increased freight that the Government want to see. Some infrastructure will need to be provided, although there are changes in the market and we need to reflect those. For example, the move of one particular shipping operator from Felixstowe to London Gateway will produce a change in the nature of freight traffic in that part of East Anglia. We will see what that does, for example, for the business case for Ely.

Earlier this year Royal Mail announced that it would withdraw its class 325 electric fleet for hauling its remaining freight by rail. Do you have any thoughts or concerns about that development?

It is a private company. In the end, there were six out of 600 freight movements a day, so the romantic view of the carriage of mailbags by train on virtually every night train in Britain has long since expired. It was barely using its existing fleet of trains at all. If it has decided that its future is not in the railway, people like Varamis and others, who can spot a market in logistics transport, may be interested in transporting more than one logistics operator’s freight on the same train. I predict that there is quite a good future for that. In fact, I saw them yesterday. I won’t say what they said to me about the development of their business, but no doubt you will see in due course that it is far from the case that there will be no transport of small parcels by rail in the future. I think the railway has much to offer there, certainly in terms of some of the capacity in the major stations in London. The just-in-time delivery of people like Amazon is a very different experience from the old way of transporting letters and parcels. Some of the London stations and big stations elsewhere are perfectly well suited to do what those sorts of people want. I think you will see that develop in the coming weeks and months.

You might even call it Red Star, as British Rail once did. Do you think we should be seeing more potential for rail freight on our rail network? As I understand it, our rail freight modal share is quite low compared with a lot of European countries.

I am sure we should. In part, it is about the entrepreneurial spirit of the freight companies, the freight they can capture and the price at which they can offer it, but as we were discussing in the context of new traffic, it will not be like Red Star. With Red Star, you could take a parcel to a railway station and somebody would fill in the forms and send it. The modern method of logistics and distribution is people like Amazon who can fill trains full of stuff and distribute it at either end by a variety of means, including some environmentally‑friendly means in cities. That is a different sort of traffic, but I am sure there is potential there as witnessed by the fact that there are people seeking to exploit it.

It falls to me as a Birmingham MP to ask about the trans-Pennine upgrade and the northern programme. What version of the Northern Powerhouse rail project is this Government going to deliver, and to what timetable?

The first thing to say is that the Government are delivering a trans-Pennine upgrade. I can’t get the number right; I keep quoting £13 billion, but it may be £11 billion or £12 billion. It is a substantial improvement for the capacity, line speed and so forth of the main railway between Manchester and Leeds. That is in progress as we speak. Indeed, if the Committee at some stage wanted to go and look at what is going on there, it should. It is a quiet transformation of what was a coal railway into the right sort of railway to develop east-west travel across northern England. It is going well at the moment. We don’t often talk about projects that are going well, but TRU currently is. Of course, that is not the only ambition. There is a lot of work going on in the Department about developing better connectivity across the midlands and the north of England. We are in the early stages of it because we are the victims, I think, of the previous Government’s two attempts at producing huge lists of infrastructure unprioritised and uncosted. That isn’t the way to get any of this done. TRU is a sound start. It is not the only thing going on in northern England, but it is the largest project outside HS2, and there is more to come. Alan, your part of the Department is doing a lot of work on this.

There is a clear manifesto commitment to improve northern connectivity and the Government are focused on that. We need to get a programme of work with northern leaders to convert that ambition, which has good support locally and in central Government into a programmatised sequence of work. We are looking at how we deliver the eastern and western sections and then build on top of the Leeds to Manchester trans-Pennine route upgrade. What we need to do is prioritise where the economic opportunities and passenger benefits are needed, working closely with our colleagues in local government who understand those. The commitment is there in the manifesto; the commitment is there in central and local political support, and our job is to convert that into a deliverable programme. There will be choices. The previous Government widened the geographic scope and the intended budget, but there will always be trade-offs between each pair of cities, or the interests of individual cities, in getting regeneration there, as well as the overall regional interest. What we need to do is get the governance right to balance those interests. That will require some difficult discussions regionally and between local and central Government.

Continuing the midlands theme, 10 million people live in the midlands; 15 million people live in the north of England, but we haven’t always had two thirds of the political attention or funding when it comes to rail infrastructure. The Department has funded some development work on the midlands rail hub, and I saw last week some of the potential benefits that will be delivered in south Birmingham through the extension of Camp Hill services. The potential to improve connections between the east and west midlands is significant. When are you expecting to be in a position to make a decision on capital funding for those projects? Although you are evaluating it at the moment, do you think those aspirations are broadly in the right place?

I too was looking at the station development at Camp Hill, the week before last, I think. It is very good to see railway improvements being delivered. Clearly, the midlands rail hub work is very important. It will enable more capacity because New Street is nearly full. You can’t put too many trains into New Street; the whole railway network in central England falls down if you do. Clearly, there are some really beneficial things to be had through that project. On the wider set of capital projects, the Department was left with a very unenviable legacy, which was a large set of promises for a large number of projects without evidently the funding to deliver them. That review is taking place currently. Sadly, not everything can be done immediately, which is one of the reasons why I am so pleased, as I am sure you are, to see that Camp Hill station has actually been built, and that part of it will be delivered. We will have to come back in due course and say what the likely capital programme is, bearing in mind the general state of the public finances. What is important—I can give you some confidence of this—is that it is quite clear that projects like that have growth, jobs and housing in front of them as an objective, and therefore they have strong business cases. The difficulty is in finding enough funding to do them all, but I hope that out of it we can produce a pipeline that demonstrates to people what is going to be done and, incidentally, suits the railway supply industry in terms of getting the costs down because of the continuity of supply and producing jobs and skills and all the good things that come with it.

Minister, on the large number of promised but unfunded projects that many of us were promised from the last Government, such as Access for All, we are still waiting to hear from you about the timescale for those projects in our constituencies or that affect our constituents. Is there any timetable of when we will hear definitively whether we are going to get them—or not?

We weren’t left with a very helpful inheritance there either. A list of 50 was published in the closing months of the last Government, which was really a list of feasibility for 50. It was not really a list of 50 that were going to happen. It was a list of things that might be done if they proved to be feasible. We have to work our way through that. The delivery, I am sad to say, has not been quite as good from Network Rail as you might have expected, and if I had still been here in my previous role I would have said that we could do better. Andrew Haines has taken over the programme himself in order to drive it forward. There will actually be quite a lot of accessible stations completed in the next year as a consequence of speeding up that programme, but it is one of the things that we have to sort out. An unachievable long list of promises is really unhelpful if in fact there’s not the money or the capacity to deliver them. I will say one other thing on this subject, which is that the industry has become rather too used to believing that accessibility can only be delivered with pairs of lifts and a bridge. I have asked Andrew to go back and look again at stations where accessibility improvements could be made without massive expenditure in order to make sure that we are not missing some obviously small and cheaper things to be achieved.

Thank you.

East West Rail recently set out a preference for discontinuous electrification. What do you think of discontinuous electrification as opposed to full electrification? Do you see that as an interim or a long-term solution?

It is a brilliant solution. Having lived through the saga of the Great Western main line, which was extraordinarily expensive and probably over-specified, I think looking at electrification in a simpler and more practical way to produce decarbonisation benefits without massive capital expenditure and altering bridges and tunnels is absolutely fabulous. I am really pleased. There was a lot of comment about the methodology of powering East West Rail. Discontinuous electrification is a really good practicable solution, and the people who devised it need credit, as do the rolling stock companies that produce rolling stock that will be able to use it. I don’t know whether anybody wants to say anything else.

TransPennine is now trialling a battery electric train, which is obviously the sort of train that you need to operate in a discontinuous electrification railway.

Sticking with East West Rail, stage 1 is starting very soon—Oxford to Bletchley and Milton Keynes. Passengers are keen to know what the trains will look like. Will they be branded as East West Rail, or are they going to look like they belong to various train operating companies, when we have chosen them? Is that a ministerial decision? Do you have a view on it?

I am not sure I can answer either of those two questions. Alex, where do you stand on this?

As you say, Oxford to Bletchley is complete from a construction perspective. Next year, we will be operating services between Oxford and Milton Keynes. The first test train has already run, which is great news; people can see progress on the ground. Our expectation is that we will contract with Chiltern Railways to operate that initial service, but those discussions are ongoing. I don’t think there is any intention at the moment for another brand to be invented. We are trying to reduce the number of brands on the railway, not increase them. We expect it to be branded by the operator.

You don’t think that it might be a missed opportunity, because if we don’t brand them slightly differently it will feel rather like the current trains that are there at the moment, as opposed to the ambition to get them to Bedford and on to Cambridge.

The service strategy for the second phase and the third phase has not been entirely buttoned down yet. The decision would be made in that context. This first interim phase is an incremental change to the service from Oxford, albeit creating a direct link on that railway, which is great news for passengers. For stage 1, it makes sense for us to procure the service through an existing operator.

Finally on East West Rail, is the East West Rail economic growth board still a thing?

I believe so, yes. East West Rail essentially is a jobs, growth and housing project. It has very strong support from across Government, Treasury and MHCLG, because of the impact on growth and housing. That cross-Government approach to the project is at the heart of it. One of the things that really impressed me when I did a site visit of East West Rail recently was how the jobs, growth and housing elements are an integral part of the project. Other railway projects could learn from that. Both the East West Rail company and the Government have this vision, and Departments are working together to make sure we maximise the potential of the new railway.

I want to let Rebecca come in because she has to leave early.

Thank you, Chair. It is just on the infrastructure piece and which things are going to get funded and which are not. I completely appreciate the fact that there were a lot of unfunded things in the past, but my understanding of how politics works and Government works in the long term is that you find the money when you want it. I am assuming that most of what transport has needed has been so long term that often you set the vision and then the money follows once you are there. I am interested in which projects will get support going forward. I know, again, it is bringing it back to those smaller branch lines. Ultimately, if there is a need for it, is it not something that we need to be finding the money for rather than saying, “That was a project from the previous Government. We’re just going to scrap it”? I know we have talked about the ones in Devon that could potentially unlock a whole host of accessibility that removes the reliance on the main line along the sea front. How are we going to find the infrastructure changes that are needed rather than the ones that perhaps were politically driven in the past?

Clearly, the whole of the capital review is seeking to sort out the best thing to do. One element is how much the Government want to invest. I’m not going to tell the Chancellor how much money she should allocate for this, but we should be trying to persuade the Government to fund the best schemes and to fund as much as they feel they can because of the connection between that and growth, jobs, houses and the Government’s missions. One of the characteristics that you always have to take into account radically is not just the choice of the next ones to do but what the tail of expenditure on what we have already started is. The trans-Pennine upgrade is some way through a very major programme. It will produce major results. It will transform travel across the north of England from east to west, but once you have committed to it you have to get to the end of it. Therefore, there will be some acute choices to be made. The capital review, which is going on in the Department, is attempting at least to find the best ways of allocating that money. More than that, I really cannot say for the moment.

I suppose it is linked, but looking more at the enhancements pipeline, this is a fairly straightforward question: do the Government intend to produce a long-term rail enhancements pipeline as well as the strategy?

Yes, they do, if only because despite all sorts of promises in the past there has not been one. One of the advantages of a Chancellor who talks about a long-term investment strategy ought to be that we can produce an enhancements pipeline, which would be a consequence of the end of the capital review, that sets out what we are planning to do, when we are planning to do it, how much it will cost, and gives the supply industry in particular some certainty in being able to plan its business to deliver it. I am much more optimistic because of the attitude of this Government towards long-term development than I was with the last Government, frankly, in a different position. Of course, both the railway and the industry suffered from not having such a thing published, and therefore from the inability to predict how much would be spent and where and when. You all know that these things take a long time and they cost a lot of money. The certainty in the supply chain is material to the cost and delivery of these things in a way that we have a great ambition to resolve.

Thank you very much. Now I am going on to Catherine.

Thank you. This leads quite nicely from what you were saying. I have a few questions on electrification to begin with. What is your assessment as to why Great Britain has been so slow to electrify its network?

One of the reasons is that it apparently costs so much, which is partially itself due to the lack of having a programme. I can ask Alex to come in. Interestingly, in Scotland, where the Government have pursued a programme of electrification, it is quite clear to us from a railway point of view that the consequence of a continuous programme was to reduce its cost. Is that not so?

Yes, exactly. Having a rolling programme of efficient electrification is our opportunity here. As the Minister mentioned, we learned some hard lessons on electrification as a country in terms of Great Western main line. I am pleased to say that the industry, working with Government, has improved since then. We are electrifying railways today. We are electrifying the trans-Pennine route. We are electrifying the midland main line route. We expect electrification to be part of the solution, both full and partial, as we discussed, but we must try to drive down the unit costs of electrification so that we can afford a rolling programme.

You mentioned the midland main line. While there is still design work going on, I understood that the practical electrification work for the stage it was at has now completed, and the end of the next tendering process will not be until September next year. Has there been any work in looking at the risks to the supply chain and to skills, and making sure that we keep them in this country rather than their being attracted to other countries?

We are electrifying the midland main line between St Pancras, which was already electrified, and Wigston in Leicestershire. We are introducing the brand-new electric hybrid trains next year, which will be great for passengers. Network Rail and the Department are talking to the supply chain about the next potential phases of midland main line electrification—Derby, Nottingham and Sheffield. Any decision around that will come out of the spending review. Network Rail is talking to the supply chain, particularly around prices and tendering strategy, for further phases of electrification if we have the money to do so.

The practical work is finished at the moment. The only work is design work. When we now face such a huge delay until the end of the tendering process, what will happen to those companies and those skills?

We are electrifying railways in the UK. We are electrifying the trans-Pennine route upgrade, for example.

Is that where they are going? They have gone from midland to trans-Pennine.

I am not familiar with the detail. I will need to talk to Network Rail about that. What tends to happen with the electrification market is that they tend not to be tied to a geographic area; they tend to move round the country depending on where the work is. That highlights the need for a smooth rolling programme of efficient electrification because it enables the supply chain to invest in the plant and the equipment and skills that you need to sustain a rolling programme. Both on electrification and on rolling stock, one of our intentions is to have a more joined-up strategy, which has been difficult in the fragmented railway that we currently have.

I would be hugely grateful for a follow-up answer just in terms of that detail.

Can I add a point? Alex, we are also letting the systems contracts now for HS2, of which a large part is catenary and electrification. It is not putting that on to an old track, but it is the same skills and experience, and it will sustain a pipeline. Thank you.

It would be fantastic to get something in writing with that detail. Do the Government intend to produce the criteria for how they are going to assess where to electrify next and in what order?

It is part of the overall capital review. There is an enormous temptation on the railway to keep talking about concrete things, rather than what the Government’s intention is in various areas. The growth, jobs and housing mission is what should drive activity. The decarbonisation agenda should drive more efficient and practical ways of decarbonising the railway. The capital review will attempt to bring all those things together to produce a plan that is affordable, to do the right things in the right way. It is clearly not simple, otherwise somebody would have done it before. Looking at it in the long term is the right way of doing it. Hopefully, we can come up with something that is affordable, credible and delivers what the railway should be delivering for the country.

Chair, I was going to move on to rolling stock if that is all right, unless anyone else had anything on electrification.

Or capital.

It is really good to hear what Alex said about the experience of the rolling programme of electrification in Scotland, because sometimes we can focus too much on what has gone wrong, in terms of Great Western, rather than the lessons having been learned from that and the potential for more. I want to probe a little bit more on what you were saying about discontinuous or partial electrification compared to full. Are you clear on what criteria would be used to determine where you would apply full electrification and where partial?

Practically, partial electrification is all about the topography and the construction of the railway and the places where you are seeking to have better decarbonised traction. East West is a really good example of that. It is not entirely flat, but there are relatively long stretches where you can erect catenary fairly cheaply and you can avoid the excessive expenditure on tunnels and existing Victorian structures. That has to form part of it in the places where you are actually seeking to do it. On the other hand, if you look at the HS2 example, it is clearly not suitable for that sort of high-speed rail, as it probably would not be in very dense urban environments with frequent commuter trains. I am not sure, unless any of my colleagues can, that you could say much more about the detail. We have learned even from Great Western, which is far from the perfect project—quite a lot about it. I used to be a resident of Bath. My neighbours were almost equally divided between the desperate desirability of electric trains and the damage that others thought would be done to a world heritage city. The residents of Bath now have the train service. It is reliable and satisfactory. The wires never got there, but they have the benefits of electric traction for most of the journey. We have learned a bit from that. My prediction on East West Rail is that it will be a stunning success at a reasonable price.

As a user of that route and having seen the stats, I somewhat dispute the reliability thing about bi-mode Hitachi trains, but that is detail for some other time. Just on East West Rail, the concern some might have is that the cost of equipping over-electrification to what is in effect a greenfield site and building a new railway should be marginal compared to fitting it to an existing railway. On railways I am aware of that have battery trains, there tends to be relatively low line speed and relatively low frequency as opposed to East West Rail, which is proposed for 100 mph operation and at least four trains an hour. Are there any risks or downsides to battery EMUs compared to lighter all-electric trains.

The technology is constantly developing, as I can tell you from experience in a related sector, which is the development of hybrid and electric buses. You only get technical development if somebody is persuaded that the manufacture of what you want can be done. The development of battery-powered trains is going through an enormous steep curve upwards in terms of what they are capable of and their reliability. Certainly, the market is telling us, Alex, that the discontinuous electrification of EWR is very feasible.

It is worth bearing in mind that the full Oxford to Cambridge service will not be there until the mid-2030s. Given the rapid rate at which this technology is developing, we can expect the capability of the trains to be quite different then. That is why things like the trans-Pennine trial are so important; we now have battery electric trains running around on the network, so the results of the trial will be able to influence whether we electrify and what sorts of trains we apply. Building on the Minister’s previous comments on electrification, density is clearly a criterion; electric railways work where there is great density. The other issue of course is freight. As I understand it, it is relatively difficult to decarbonise freight without full electrification. Therefore, potential freight use is also a factor when thinking about the long-term strategy of the railway.

Thank you. Shall we move on to rolling stock?

Yes, thank you. What progress has been made on establishing a long-term rolling stock strategy? What relationship will it have to the Government’s planned industrial strategy?

The first thing to say is that there has been no long-term rolling stock strategy, which is the cause of the immense angst and concern about the future of individual assembly and manufacturing plants. We are now starting work—Alex can talk about it—on such a thing, principally because it cannot be right for the manufacturing industry to have so little knowledge about what the train operation might need and the replacement strategy. That work is starting, isn’t it?

Yes, and we are in discussions with the Treasury on that. Our previous comments on electrification apply. There are parallels with rolling stock. Rolling stock investment was historically driven by the franchise bidding process. We went through a period a number of years ago when we had lots of rolling stock orders and lots of new rolling stock introduced on to the network, and then we had a relatively fallow period during covid. The need for a longer-term integrated view of what we want to do with trains is important because, for a start, we want to get better value. We also need to remember that there are real people working in these facilities with real livelihoods. The Government have recently worked with Transport for London for an additional order for the Elizabeth line with Alstom in Derby. I am sure you will have seen the Prime Minister and the Secretary of State for Transport visiting Newton Aycliffe last week welcoming an investment by FirstGroup in an order for its open access. We are working very closely with all the manufacturers, both in the short term and in the medium term, to try to have a smoother pipeline that will enable us to secure the future of these facilities and, hopefully, drive better value for the taxpayer, because the peaks and troughs are not necessarily conducive to getting the best prices.

As a Derby MP, the damage done by boom and bust is something that I am very familiar with. How can we ensure that when it comes to their supply chains we are really encouraging and enforcing the use of British talent and British jobs to provide the work that they need further down the supply chain?

I am bound to say some dull stuff about public procurement and dealing with procurement properly and legally. Yes, of course, the Government want to make sure that as much as possible is built and/or assembled in Britain. I am very clear that the result of a long-term rolling stock strategy would be to give the market more confidence that things could be made here to be used here, and that is quite an important feature. Of course, both the manufacturing and assembly plants are primarily addressed at railway rolling stock. The people who own them ought to consider that that huge reservoir of really good skilled people can be used for associated things. Hitachi does a lot more than build trains. I gently reminded Hitachi at Newton Aycliffe that such a brilliant workforce who are so good at producing things could also produce other things for Hitachi, if Hitachi chose to do that—not instead but as well.

I am certainly biased in considering Derby as a city that makes things, in terms of the wide talents that are there. How is the Department planning to address the skills crisis that we have in the rail sector?

For infrastructure and manufacturing, what we have talked about this morning in terms of having a clear long-term capital programme and a clear strategy for rolling stock are the things that will enable the private sector supply industry to invest properly in skills and their workforce. That is why we are determined to do that. However, that is not the only part of the railway that needs workforce planning. We didn’t talk about the operating side of the railway in detail, but if there is time we could talk about the unprecedented shortage of drivers that we have and about the opportunities for a workforce that largely looks like me—not quite as old as me—but is not half as diverse as it should be. There are some brilliant and large-scale opportunities to renew the workforce in a more diverse way. Alex could talk to you, briefly at least, about the work we are doing to find out what that population looks like in detail across the country, and the staff who are needed to replace either those who have gone or people who are going to retire. That is a big job, too. There are huge opportunities in the railway industry for skills, for lifetime employment and lifetime learning, and we are absolutely determined to face those head-on for the benefit of people who want a decent career.

I am certainly keen to understand more about operational skills, but could I come back to manufacturing skills? There is not a rail-related industry that I go to that does not talk about its real concerns about skills going forward. You mentioned the private sector being able to plan for that. Will GBR not have a role when it comes to ensuring that we fill the skills gaps that we have?

Absolutely. Part of the point of a long-term railway strategy and part of the point of a capital review and a long-term capital programme is to give those industries some assurance to be able to recruit and train people. Without it, they can’t do it. I too listen to them very carefully. I am quite frequently an attendee at Railway Industry Association events. They talk about nothing else because it is the future of their company, as well as the future of their workforce and the people who could enter the supply chain if they knew that the orders were there for the future.

From what you said, though, the only role that GBR will have is providing clarity, as opposed to more actively looking at the kinds of skills that are needed and how we ensure that the training is in place for that.

I didn’t want to leave you with that impression. I do not see GBR as interfering with the railway supply chain in the future because that is very successfully part of the private sector. I see GBR as giving real leadership to it and engaging with it in a practical and useful way forward. I don’t think GBR should be supine in this. GBR, as the owner, the future operator and the deviser of the strategy for the railway, ought to be intimately engaged with the supply chain to make sure all of that is maximised. The point of maximising it is, as I have done in some things for the Railway Industry Association and others already, to make sure that we have some exports out of it as well.

Okay, thank you.

Euston station, Minister, is still a bit of a mess. What is your latest assessment of the situation there?

You will have seen in the press this morning pictures of what was an advertising board which is going to be turned back into an indicator board. I was there about four weeks ago to see what is being done to relieve congestion. The bookshop that was on the right-hand side as you approach the platforms is gone, as is Boots, some time ago on the left-hand side, to create more space. There are a number of other things, including Avanti making a much stronger attempt to board their trains earlier than they previously advertised and a different method of approach for London Northwestern Railway, which is to put the passengers on the platforms even before the arrival of the trains. Those will all make a considerable difference to how the place works. In fact, I think I am down there next week to see some of the results. Of course, I have been through it. Avanti have started to load some of the trains early, and it makes a real difference.

A key challenge in the industry has been timetable change management in recent years. Something that has been talked about for several years is the east coast main line timetable recast that has been on and off. How do you feel about the proposed timetable in its current form and whether it gets the right balance between intercity long distance and some of the more regional services?

One of the reasons for wanting Great British Railways as a body to control the railway is that while Network Rail was responsible for producing the timetable, it is quite clear that there was no process by which you could establish what that timetable should be, hence the difficulty about the east coast main line timetable that we have talked about, and hence the fact that it has always been just about to be put into effect but hasn’t got there so far. As I think Alex said earlier, that is with the Secretary of State and with me currently. We must do it. The question is whether we have the best balance in an imperfect world with the competing demands of all the train services, including freight and open access, that need to use it. I am optimistic that we can come to a conclusion very shortly for the benefit of all the users of the east coast main line. In a very congested railway, there will inevitably be some people for whom the outcome is less than optimal. One of the challenges that all railway operators have, however they are organised, is to make the best use of the infrastructure we can. I am very hopeful that in the near future we can say what we are going to do about the east coast main line for the benefit of all the passengers who use it.

Do you feel that particular case highlights the need for more policy leadership from Government overall as to the desired outcomes of the rail network and what the balance should be between intercity, regional, commuter and freight?

It absolutely makes the case for GBR, because finding a process where nobody is apparently the decision maker, and Network Rail are merely the people who execute a decision that has been so difficult to take, is profoundly unsatisfactory.

We have two or three wind-up questions, and then we will go on to HS2 briefly. Laurence, you had one on Access for All.

Yes, I want to follow up on the earlier discussion about an accessible railway. The minutes of the May board meeting of Network Rail stated that the lack of traction on the Access for All programme which had significantly underperformed in CP6 now created challenges in the transition to CP7. Earlier this week, the Minister for local transport stated that Ministers are carefully considering the best approach to the Access for All programme. What went wrong in CP6? What issues are you grappling with for CP7? When can we expect to see a fresh approach to accessibility upgrades?

There are two primarily different things in there. The delivery of CP6’s Access for All schemes was not, frankly, as good in Network Rail as it should have been in some of the Network Rail regions. As I mentioned earlier, that is why Andrew has taken the programme back centrally and is giving some personal attention to rectifying that with a view to getting some delivery. My understanding of delivery in the next calendar year is that there will be a significantly larger set of stations to be delivered in 2025 than would otherwise have been expected. The CP7 issues are part of the wider issues about determining how much we can afford and where schemes should be. We discussed that a bit earlier. It will be quite a challenge to work out what the schemes to take forward are. You need to do feasibility work. We discussed that. Announcing a list of stations without understanding how feasible some of them are and how much they will cost is really not much help, frankly, so we have to work through that. I fear it will take some months to get to an answer where we can say what is going to be delivered in CP7. As a real example, you can have an average cost of lifts and bridges, but some of the stations in the list of 50 published by the last Government would take up significant amounts of budget just because of the configuration of the station.

Catherine, you want to push on something.

My concern is that I stopped you telling us more about what you were doing when it came to operational skills and more workforce for future drivers. We didn’t get into that.

Let me turn to Alex, who can tell you about both how we are analysing the issue and what we intend to do about it.

The age profile for drivers is probably a bit higher than we would like. We expect many drivers to retire in the coming decade or so. Combined with that, at the moment, many operators are over-reliant on the use of overtime working for drivers. Some of that is a covid legacy because it was difficult to continue with driver training during covid. Obviously, that was a number of years ago. One of the top priorities of this Government is to improve performance on the railway. When we sit down with Network Rail and the train operating companies, one of the key reasons for delays and cancellations is lack of available train crew. We have asked every train operating company in their business plan to set out for the next five years how they are going to rectify their driver numbers in each of their operations. We have commissioned someone to work on behalf of the Department to go into each train operating company and help assure that they have a plan to address the issue where in some parts of the country we don’t have enough train drivers. That is ongoing work. It will lead to lots of recruitment in the train operating companies. As the Minister said, this is an opportunity for us to attract a more diverse workforce to our industry. There is an incredible amount of work going on in that space with the primary aim of reducing the number of cancellations across the network, which is too high in large parts of the country.

Thank you. I want to finish our questions with HS2, particularly to you, Minister, because I will be guesting at the Public Accounts Committee next Thursday morning, which is covering HS2. You won’t be there—it will only be officials because of the way Public Accounts works—so let’s ask you some questions now. What are you doing to maximise the benefits of the delivery of just phase 1? How can you ensure value for money if it does not proceed north of Birmingham?

The very first thing to say is that this new Government have to get phase 1 of the project under control. One of the best things that I have done since I took this role was last Monday when I went down to Old Oak Common, not just because the Government will fund the construction of tunnels to Euston, which was in the autumn statement, but because it introduced Mark Wild, who is the new chief executive. That is a really positive decision. I welcomed him. I know him because he is the guy who, effectively, brought Crossrail back from a very bad position and put it into service as the Elizabeth line. HS2 phase 1 is a materially bigger job, so he will need both himself and a team to do it. We have to understand how much it is going to cost, how long it is going to take and when it is going to open. To be in this position is profoundly unsatisfactory, but we have a lot of faith in Mark and the team that he will assemble to do that. We also need more ministerial scrutiny of it than has occurred for some time. I was around long enough to have been at least party to the previous Government’s ministerial taskforce, but it petered out about four years ago, and it does not seem to have been the subject in the last years of the last Government of significant ministerial attention. The Secretary of State and I are certainly going to give it ministerial attention because it is the largest construction project in the country. It is not satisfactory to have a project where you cannot say with certainty how much it is going to cost and how long it is going to take, and we have to rectify that. We have to rectify it because we will not be very persuasive to the Treasury and to the Chancellor and other parts of Government about doing any more until we can at least show that we have this properly under control, and we are absolutely determined to do that.

Regarding Euston terminus, what progress is being made towards establishing the development corporation? Are you confident that it will leverage in the private sector funding to help the capital costs?

Now that we know that the tunnels are going to Euston, it puts, rightly, a spotlight on the development of the proposals for Euston itself. I chaired the Euston Partnership for four years in my previous role, so I can testify to the fact that certainly when it started there was no meeting of minds about the interaction between the station HS2 was then going to build and the current Network Rail station. There was in fact for a long time no money to replace the Network Rail concourse, but I am pleased to say there is now. We are in the course, I hope, Alan, of producing a plan for Euston that will be comprehensive for passengers, so that there will be one concourse for wherever you want to travel. It will have a suitably sized HS2 station and will produce the scale of development on and around the station that it deserves to have. It is adjacent to the life sciences part of London. It will be extraordinarily well connected. We are still in the course of deciding quite how all that works, and we need a plan that is fundable. What else should we say, Alan, about that?

I agree with all of that. The change in approach is to focus on having to deliver four elements at Euston, which are the HS2 station, the redevelopment of the conventional station, getting the underground station able to be upgraded to deal with the capacity, and, importantly, the jobs and housing, with the commercial opportunities associated with site development. Our approach is to recognise that all of those things work together. The historical problem has been looking too much at each part on its own and not being willing to make compromises. The work Lord Hendy did in his former role and that we are continuing now is to bring the parties together and to recognise the need to protect their own interests, particularly where there are operational railway issues for Network Rail and TfL, and to compromise in terms of the overall objectives. Towards that, we have made significant progress on an overall spatial plan that looks at how the oversight and adjacent site development and the two stations will work together with the underground. We have made good progress on getting a more cost-effective design for the HS2 station. We have made progress on development opportunities and the station concept for Network Rail, including how we integrate the station so that it feels like a good, unified passenger service. We still retain the preferred model, which is to work with a delivery company to have integrated design and integrated delivery to get the three stations and the oversight and adjacent site development away, and to work with a development corporation that MHCLG is working on. Bek Seeley has been appointed to start work on the wider housing, so that the important benefits around the station of housing and economic development, and the sensitive insertion of the transport infrastructure into Camden and London, are done in a joined-up way. There is work to do on how we assemble that model and operationalise it, but there is a good degree of consensus, I hope you agree, Lord Hendy. In terms of funding, we see multiple sources coming together to make the overall endeavour work. There are development receipts from the commercial development. There is the prospect of tax increment finance or equivalent from the development corporation, whether that is through a mayoral one or a Camden-led one. Then there is potential for private financing still of the HS2 station, and we are working that through with the Treasury because it needs to work not only as an investable proposition as a station but in kilter with wider Treasury rules on expenditure. I hope that is helpful.

I saw yesterday the global chief executive of Lendlease, which has been the development partner at Euston for some time. Lendlease has been through a journey of its own recently, but he confirmed to me that it is ready to be able to develop on and around the station when we have a plan to do so. We have moved a long way. When I started at Euston Partnership, we were going to have two platform 1s at Euston. We were going to have platform 1 in a Network Rail station and we were going to have platform 1 in an HS2 station, which to all intents and purposes would have been regarded as completely separate. Of course, it is nonsense, because people turn up there to go wherever they are going by train. They do not want that sort of organisation, and we have moved a long way from it.

Minister, what is your view of the proposal for phase 2 from Handsacre towards Manchester and beyond that is coming from the Greater Manchester and West Midlands mayors?

The previous Secretary of State and I met both mayors, and they described to us where they had got to. First, without doubt, we have to fix the programme and the cost and the outcomes for phase 1. Beyond that, there is a major piece of work that Alan and his people are engaged with to work out the future of the betterment of the railway in the midlands and the north of England, of which clearly that forms part and, without doing a whole piece of work, to work out, when you have phase 1, how it might be used for the benefit of the nation, not just to Birmingham but in connection with the rest of the railway network. From that there is a further piece of work about where new lines should be built, who should pay for them and how they should be done.

And how fast the operating speed needs to be.

Well, indeed. I risk straying into personal views, but the highest speed high-speed railway in Britain will cost this nation a lot of money. Some of the aspects of the work done on the proposal between Birmingham and Manchester look to us to be far more practicable, but I don’t think we can consider it without fixing phase 1 and doing a wider piece of work about how a new railway infrastructure contributes to the economy of the midlands and the north of England, and that is the context in which we will have to take it forward.

Are we all accepting that there has to be additional capacity north of Birmingham?

The answer to that is that the industry’s predictions, even post covid, show a shortfall in capacity of the west coast main line north of Handsacre in the next 10, 15, 20 years. How we fix that, the way in which we fix it and how it relates to the rest of the new railway infrastructure that everybody wants to see in the midlands and the north is something that we have to work through as a whole and find a way of dealing with it.

Absolutely. Mayors Parker and Burnham would view a potential capacity shortfall in the mid-2030s as an economic drag on growth, and we need to address that. Part of the Government’s job needs to be long-term capacity planning. Building new infrastructure is not the only way to deliver new capacity, but sometimes it is necessary. There are no spare paths on the west coast main line. Trying to improve the west coast main line will be enormously disruptive. At the same time, the Government have been absolutely clear that we are not talking about reinstating phase 2. As Lord Hendy described, we need to look at what needs to be done by when and whether we can achieve capacity improvements through smaller interventions, starting with rolling stock and how we use that, then moving on to small capacity increments, and then potentially contemplating bigger capacity improvements. When we put in new infrastructure, we have to do it better and in a more controlled way. We have to recognise that it is part of a whole one-rail system. The power of doing it incrementally is to bring forward better passenger benefits sooner and have more control over the delivery. There is a change in ethos and approach, but underneath it we need a long-term plan because in all reasonable modelling scenarios there will be a capacity problem north of Birmingham.

I should finally say that when phase 2 was abandoned by the previous Government it is quite clear that subsequently no thought whatever had been given to the prospect of what the train service on phase 1 would look like, because clearly it is connected with the rest of the railway network. The country deserves, investing this money, to have the best possible service provided using phase 1 in conjunction with the rest of the national railway network, and that is one of the jobs that needs to be done. That will help us develop what the programme should be for future large-scale railway investment in the midlands and the north.

Thank you, Minister. For anyone else watching, tune in next Thursday morning 18 December for more on HS2.

Can I just say one thing? For all the correct criticism of the delivery of phase 1, we should remember that there are 30,000 construction workers out there at the moment in dangerous conditions doing their best to deliver this for the country. We should note that, if that’s okay. Thank you.

I want to move from the network, which is desperately short of capacity, to one piece of the network that I have discovered is running massively under capacity, which is HS1. The line is not part of GBR. You have a single open access operator on the line at the moment. It has potential to get a lot of passengers and freight off the air and on to trains. Is there a plan for it?

Yes. Indeed, it does have potential. There are two things. Without giving away commercial confidences, it looks to me as though we are nearer finding other passenger operators to use HS1 to access the continent now than we have been for some time. There are some issues involved in that, in particular capacity at the stations and St Pancras and depot capacity, which have to be worked through. Most people would think that it was very welcome to find people who wanted to use HS1 for more capacity. There is of course also freight capacity available, and the Department is undertaking work to further reduce HS1 freight costs for international freight flows. In particular, there might be some good outcomes of the current ORR periodic review on HS1 that would help that. The Government will be very keen indeed to maximise its use for some very obvious reasons.

Thank you very much. Thank you all for your contributions today. Thank you to the team and colleagues for the questions. If there are any further points you want to put to us in writing, we will welcome that. We have all found the session very valuable. That concludes today’s meeting.