Department For Transport
Good evening and thank you to Andy Bagnall and his team at Rail Partners for organising this event and for inviting me to deliver what is my first rail speech since becoming Transport Secretary.
What a fantastic setting this is, surrounded by reminders of Britains glorious engineering history and Bradshaw in whose name we meet today (7 February 2023). Whose timetables brought order to the chaos of the Victorian network is as much a part of rails story as Stephenson, Brunel and others honoured throughout this building.
I would also like to pay tribute to Adrian Shooter who sadly passed away in December. Over the past 30 years, few have played a bigger role in the growth and modernisation of the railways and Im sure hes missed by many a friend and colleague here today.
I realise Im the second Transport Secretary to give this prestigious address. And Im pleased to see Patrick in his seat. But me and Lord McLoughlin, Patrick as we all know him, or chief as I used to call him, have a bit more in common. We both hail from working class backgrounds: my dad a labourer, his a coal miner. We both grew up in historic railway towns: Swindon in my case and Stafford in his. And we were both promoted from the whips office to running the Department for Transport. Though admittedly, he was a bit faster than me I spent an interlude on the backbenches.
Now, 6 years may not seem like a long time but, as Andy says, during that period weve since left the EU, emerged from a global pandemic, had 2 general elections and my party may have had one or two changes in leadership. Yet the more things have changed outside the railways, the more they seem to have stayed the same inside.
Patricks 2016 Bradshaw Address was a passionate call for a more flexible, more accountable and more joined-up railway. That still rings true today, as do the reflections of previous Bradshaw speakers. Lord Hendys case for a whole system railway in 2018. Keith Williams, a year later, with his relentless and right focus on passengers and even Rick Haythornthwaites warning at the inaugural Bradshaw Address in 2011 of a disillusioned public not trusting the way our railways are run. Those all sound eerily familiar.
So, Ive spent my first few months in this job listening to the experts, indeed to many people in this room, drawing on my experience in government and many years in business, to understand whats holding back meaningful change and how we move forward.
Modernisation
Theres clearly a lot of frustration in the industry. Theres a widespread desire to end the sense of drift. By moving on from re-diagnosing the industrys ills to getting on with fixing them. The governments policy is clear. The Plan for Rail has already been announced to the House of Commons in May 2021 so delivering that policy, moving from the words to action that is my priority.
Because the railways, quite frankly, arent fit for purpose. Were mired in industrial action, which lets down passengers and freight customers down. And historically unable to deliver major improvements at good value for the taxpayer. Britain is yearning for a modern railway that meets the needs of the moment. One reliable enough to be the 7-day-a-week engine for growth businesses expect. Nimble enough for post pandemic travel, whilst allowing more flexibility for freight and efficient enough when public spending is rightly scrutinised like never before.
The railways need fundamental reform and that is what we will deliver. And what I will try to set out this evening is how we re-energise that process. Freeing reform from the sidings and getting it back onto the mainline.
Context
But first, I must provide some important context. In putting an end to last years unwelcome political and economic turbulence this government promised to be straight with the public about the difficult choices ahead. We set out a plan to restore economic stability and that plan is working.
Weve seen a significant settling of the market, weve reassured investors, calmed the markets and strengthened the currency. Its a strong base from which to deliver the Prime Ministers 2023 economic priorities: halve inflation, growing the economy, and reducing debt.
It is testament to this industrys huge economic potential that even amidst a challenging fiscal climate we gave full backing to the 96 billion Integrated Rail Plan.
The largest single investment ever made in our railways will take HS2 from Euston to Manchester. Northern Powerhouse Rail across the Pennines. East West Rail between Oxford and Cambridge. And that has the Chancellors full support.
Were not wasting any time. In December, I saw the huge construction effort underway at the site of Curzon St Station in Birmingham. It will be the first new intercity terminus built since the 19th century. Attracting tens of thousands of jobs and sparking housing and commercial regeneration across the city.
Broken model
Dont take my word for it go and talk to Andy Street and youll get a very passionate case about the transformation that HS2 is bringing to his city.
But we risk wasting that future infrastructure spending if our railway model is stuck in the past and thanks to Keiths painstaking work, we know what the underlying issues are. A fragmented structure that quickly forgets the customer. Decision making with too little accountability, but with too much centralisation. And a private sector rightly criticised for poor performance but with too few levers to change it. An industry in no mans land as Andrew Haines correctly described it in his Beesley lecture.
And in the end its rails customers that suffer. Like on the East Coast Mainline, where passengers still await the full benefits of billions of pounds in taxpayer investment and years of infrastructure upgrades. I know this first hand. As a backbench MP, when I was trying to get a Sunday train from my constituency to London, I remember constantly refreshing the First Great Western timetable to find half the trains werent running. Like many passengers, I had no choice but to give up and take the car instead.
Andrew, who was then running First Group, probably remembers my rather irate emails from the station platform, interrogating him about why the service was so unreliable. Four months into this job, I now know why. I possibly owe him an overdue apology. It wasnt entirely his fault. Because Sunday services are essentially dependent on drivers volunteering for overtime. Which means, despite best efforts, we cant run a reliable 7-day-a-week railway on which customers can depend. Its why I and the Rail Minister, Huw Merriman, have been clear throughout this period of industrial action that modernising working practices must be part of reform.
Pandemic impact
Finally, the pandemic has made a bad problem worse, a lot worse. Thanks to hybrid working, an economic model dependent on 5-day commuting is out of date. Take season ticket sales, which are at just 28% of pre-COVID levels.
Unsurprisingly, and you dont need a chartered accountant like me to tell you this, the impact on the industrys bottom line has been stark. Revenue is around 125-175 million lower each month and costs keep rising year on year.
Any other industry would have collapsed years ago but the railways have only survived because of the taxpayer and the public purse. The source of over 70% of income over the past 2 years at a cost of 1,000 per household. I wont mince my words: operating the railways is currently financially unsustainable and it isnt fair to continue asking taxpayers to foot the bill. Most of them dont regularly use the railways. Including plenty of my constituents in the Forest of Dean.
But they find themselves subsidising an industry that delivers only 1.5% and 2% of all journeys that are taken by the public. That disproportionately serves commuters in the south-east and whose funding comes at the expense of other vital transport upgrades. At a time when sacrifices are being made across the economy we must be aware of the trade-offs when it comes to public spending and remind ourselves, as Patrick rightly said in his address, that the Department for Transport isnt the Department for the Railways.
So, we have a broken model. Unable to ada