COMMISSION ON THE POWERS AND ELECTORAL
ARRANGEMENTS OF THE NATIONAL ASSEMBLY FOR WALES
MINUTES OF PROCEEDINGS
of the
EVIDENCE OF:
Professor Stuart Cole – Wales Transport
Research Centre
held at
Caradog House, Cardiff
On
FRIDAY 13TH JUNE 2003
In Attendance
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Lord Richard: Chair, Richard Commission
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Ted Rowlands: Richard Commission
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Tom Jones: Richard Commission
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Peter Price: Richard Commission
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Dr Laura McAllister: Richard Commission
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Sir Michael Wheeler-Booth: Richard
Commission
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Paul Valerio: Richard Commission
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Vivienne Sugar: Richard Commission
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Eira Davies: Richard Commission
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Huw Thomas: Richard Commission
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Professor Stuart Cole: Wales Transport
Research Centre
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Proceedings
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Lord Richard
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Thank you very much for coming.
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Professor Stuart Cole
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Thank you very much for the invitation.
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Lord Richard
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I wonder if, first of all, you could
identify yourself for the sake of the record, so that
we have it on paper, and then if you would be very kind
perhaps to open up your paper to us, because, as you
may know, we got it fairly late on and I think
we have managed to skim it, at least I have, and
I cannot say I have gone into it in enormous
detail.
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Professor Stuart Cole
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Apologies for the late arrival. I have
been in Poland for 10 days. Yes, I will do that.
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I am Professor Stuart Cole
and I am Director of the Wales Transport Research Centre
at the University of Glamorgan.
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If I briefly go through, there are
two things probably which perhaps I could introduce
to you: one is the powers that need to be, in my view
anyway, transferred and I think that view is probably
shared by the National Assembly Committee, the Environment
Planning and Transport Committee as was, now slightly
restructured, the Welsh Assembly Government through
the Minister, Sue Essex, who was Minister prior to the
elections, and the Select Committee on Welsh Affairs
in the House of Commons, I do not know if any of
you have pretty much the same view.
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I think I was asked if I would say something
about who was in charge of what on the railways because
it is not immediately apparent. In terms of the powers
and responsibilities issue, I suggest the underlying
concern by both the Select Committee on Welsh Affairs,
who I understand you are seeing in two or three
weeks time, in their report in January indicated
that there were probably three areas which they felt
ought to have attention: one was powers over the
Strategic Rail Authority on the railway side - powers
of direction and guidance which are currently held by
the Secretary of State for Transport for the UK Government.
Second, the powers to create Passenger Transport Authorities,
and I can explain that in more detail if you wish.
Basically, they are bodies which are groupings of local
authorities which effectively are happening now in terms
of the consortia of local authorities, Tiger/Swift,
in this part of the country, switch in the west, Trafryndiaeth
Canolbath Cymru (Tracc) in the Midlands of Wales and
Taith in the north. They are groups of local authorities,
and one or perhaps two of them might become Passenger
Transport Authorities on a more formal statutory basis.
Thirdly, the decision about who appoints the member
of the Strategic Rail Authority representing Wales,
because currently that appointment is made by the Secretary
of State for Transport, and I believe it must be
very difficult for the member; the current member is
Mrs Janet Jones, and it must be very difficult
I think for that member to know exactly who he
or she is responsible to. Clearly, the responsibility
is to the Secretary of State for Transport as the appointing
Minister, but the Assembly Government, the National
Assembly Committee and the Select Committee felt that
that responsibility ought to lie directly to the current
Minister for Economic Development and Transport in the
Assembly Government. That would be a much more satisfactory
arrangement in terms of representing Wales's views to
the Strategic Rail Authority as a whole.
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The UK Government's view, of course,
is that the Strategic Rail Authority is a body
appointed by the Minister and, therefore, there is a significant
disagreement there.
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Reasons for bringing railways into the
area of responsibility of the National Assembly and
the Assembly Government, largely is based on the desire
by the Assembly Government and others, and I think
certainly three of the political parties in Wales and
possibly the fourth have a sizeable degree of agreement:
Labour, Plaid Cymru and the Liberal Democrats, on the
fact that there should be an integrated transport policy,
determined by the Assembly Government.
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Now that requires a single budgetary
body in overall terms, responsible for the railways,
the roads, traffic management, funding of buses, maybe
even the regulation of buses, so that when a decision
is being made, and it would be in a partnership
I think between the local authorities, who have
certain responsibilities in terms of bus funding, and
the Assembly Government, who have responsibilities in
terms of highways funding, the Assembly Government would
clearly be responsible for funding of the core network
which would be the railways and the trunk road network
as at present and local authorities, partly from their
own funds and partly from Assembly Government funds,
responsible for the more local issues, such as buses,
roads -- local roads that is -- and traffic
management.
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That would enable us to bring together
in Wales all those activities involved in transport
and that would enable the Assembly Government and the
local authorities between them to make a decision
on where they spent their money.
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At the moment if we want to solve, for
example, the congestion problem on the M4 in this part
of the country then we only have one option in terms
of the Assembly Government's powers and that is to build
another motorway, like the A48M, for example, whereas
there is a perfectly clear alternative, which is
to provide a metro system which would probably
cost no more money than building the M4 across the Gwent
levels. It would certainly be substantially less controversial
and which would enable people to have a railway
service which would encourage a large proportion
of car users making simple single trips to make those
trips by train rather than make them by road. At the
moment that option is not available to the Assembly
Government. It can spend money. It is spending money
currently, and some two and a half million pounds
on improvements to the railway, but that is not its
primary function and it is not getting any other funding
for that through, for example, the block grant or the
funding that currently goes to the SRA.
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So the restriction on the Assembly Government
and local authorities together to come up with an integrated
transport policy for Wales is there, and that is the
big concern I think.
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There is also I think a separate
concern to do with the funding issue, and I think
looking at Scotland is a useful lesson in terms
of what the Scottish Executive is doing in terms of
the railway compared with what the Assembly Government
is able to do. The Strategic Rail Authority's budget
has been cut by the UK Government for this current year
by about £320 million.
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Ted Rowlands
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Not down by, £320 million, to £320
million?
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Professor Stuart Cole
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No, cut by £320 million.
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Sir Michael Wheeler-Booth
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Why such a big cut?
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Professor Stuart Cole
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I think you have to ask the Minister,
as Sir Humphrey would say, but I think there are clearly
other expenditures which the UK Government felt had
a priority and whether it was within the Department
of Transport singularly --
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Ted Rowlands
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Cutting subsidies to commuters in South
East London and South London, that sort of thing?
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Professor Stuart Cole
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The whole of the budget was cut. The
process was that Alistair Darling, as Secretary of State
for Transport, cut the SRA's budget by just over £300 million.
The consequence of that was that the SRA, the Strategic
Rail Authority, had to find some way of saving that
money, and the way they went about it was to go for
those projects which had not yet been committed contractually,
and effectively what happened is that a mechanism
called the Rail Passenger Partnership, which is the
upgrading system of the railways, which was worth about
£400 million, that has been stopped. So there are
no new contracts being put out. So the improvements,
for example, that are currently taking place on say
the Valley Lines stations; all that work has stopped,
except where the Assembly Government has stepped in
to pay for some of that work to be done.
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Now that was an easy way for the SRA
to cut immediately £300 odd million from its budget
and that cut, as I understand it, was an immediate
cut; it was an announcement directly that they would
be getting £300 million less than they ought to
have been getting in this financial year. So we have
a situation where --
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Lord Richard
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What was the whole budget for it, approximately?
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Professor Stuart Cole
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This is a very difficult question,
because the SRA are spending sums of money on both capital
and subsidies, and it is sometimes difficult to separate
out exactly what the expenditures are on the different
elements. The SRA are not -- I do not know
if you have spoken to the SRA yet, but they are not
the most open of organisations currently, but we are
talking about total expenditure on the railway in terms
of capital investment of about £6 billion. That is what
Network Rail are spending on capital expenditure, but
then on top of that the individual train operating companies
are buying trains, partly with their own money, partly
with SRA money, and there is a subsidy to the whole
of the railway, which is around about a billion
pounds, or thereabouts, £1.1 billion, in this current
financial year. That is the cash subsidy to run the
railways, of which Wales gets something like, give or
take £100 million, it is about £94 million
this current financial year.
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Ted Rowlands
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Is that the subsidy bit?
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Professor Stuart Cole
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That is the subsidy bit. There are two
railways in Wales – local services and Inter-city.
Wales is served by several railway companies. That is
the running costs of the trains, and that includes,
of course, those companies having to pay Network Rail
for use of the track and leasing of the trains. Most
of the train companies own very little. If you take
somebody like Wales and Borders, the vast majority of
their trains are owned by leasing companies. The track
is entirely owned by Network Rail and so most of their
outgoings are on staff, and what are called "rail access"
charges, charges for using the track and leasing costs
on trains. That would account for probably 85 to 90 per cent
of their costs.
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So that is the underlying issue as far
as the Assembly Government is concerned. I have
set out in the paper --
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Ted Rowlands
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You were just about to say, "But in Scotland
there is a most interesting" -- and we interrupted
you. Apologies for that.
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Professor Stuart Cole
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The situation in Scotland is quite different
to that in Wales; fortunately for the Scots and unfortunate
for us. The situation is this. Perhaps I can go
back just one stage and say a little bit about
who is in charge of what, and that might put the Scottish
situation into context. Network Rail is the company
that took over from Railtrack. Railtrack went into liquidation,
or into railway administration and after a long
process which you will have read about in the press
Railtrack were taken over by Network Rail who now own
pretty well all the track in the country; the only bit
it does not own are some of the track inside the depots,
such as Canton Depot, the track is owned by the leasing
company who own the depot which is the company that
leases the trains to Wales and Borders and also, oddly,
Fishguard Harbour, which is owned by the harbour authority,
otherwise 99 per cent of the track is owned
by Network Rail. Then we have franchises. These are
companies franchised by the Strategic Rail Authority.
It is a contractual arrangement to run trains.
They do not own the track, they do not own the signals,
they do not own the stations, they do not even own the
trains; they lease the trains and they operate the trains.
The First Great Western franchise terminates on 1st March 2006.
The Wales and Borders franchise terminates on the 31st March 2004.
It is a short term franchise because the original
franchise terminated I think in 2002, and so a new
2-year franchise was issued in order to keep the trains
running. It is a full franchise, but it is a short
term franchise with an early termination clause.
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Now the Strategic Rail Authority's intention
is to terminate that contract, that franchise, either
in October or November of this year and create
the new Wales and Borders franchise which will run all
the trains in Wales and a number of a trains
from places such as Chester, Birmingham, Manchester,
and so on, outside Wales. It will be part of the Great
Britain train network, supervised and overseen by the
Strategic Rail Authority.
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The big step, just before that, at the
end of September is that the whole of the existing
two franchises; that is Wales and Borders, which covers
the area as far as say Newtown, Aberystwyth and Pwllheli
and the North Wales main line, which is a separate
franchise, all of those will be converted on I think
on 27th September into a new legal entity
called the Wales and Borders Franchise. That is to prepare
the ground for the new franchisee taking over in October.
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Most of it is fairly long large amounts
of paper and it is largely to do with legal issues such
as transference of pension rights, transference of staff,
leasing agreements, and so on. It is entirely administrative.
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The decision then on the new franchisee
is expected to be made quite soon. The franchisee would
need at least 3 months notice to take over the
franchise, so we are talking about probably July
sometime, and therefore August, September, October
is the amount of time that the franchisee would have
available.
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The dates for taking over the franchise
are determined by financial periods and so it is the
end of a financial period that the new operator
will take over; those are monthly financial periods.
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I am sorry, I did mean 28th September
rather than the 27th a moment ago for
this transfer of documentation and so on. So that is
the situation at the moment.
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There is one other player in all of this
that I ought to mention which is the Office of
the Rail Regulator, and the Rail Regulator's job is
to oversee the licences of both Network Rail and the
train operating companies. It is also the role of the
Regulator to ensure that the controlled fares on the
railway do not increase by an amount greater than that
allowed by the Regulator.
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There are different types of fares. There
are a group of fares, 5 of them: the Open First,
the Open Second -- that is unlimited use, get on the
train whenever you like, turn up and go --
the Saver, the Super Saver and the Apex. Fares are all
controlled by the Regulator and the Regulator decides
by how much those fares may change.
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All other fares are uncontrolled. The
intention was that companies would have a degree
of flexibility in terms of offering discounts, and so
on, to generate more business.
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So that is the role of the Regulator.
Two other things probably worth mentioning: one is the
Rail Passenger Partnership that I mentioned a moment
ago. This is an investment fund which has currently
been suspended by the SRA for the budgetary reasons
I mentioned earlier. This was intended, £400 million
of it was intended to provide a programme of improvements
which the passenger would see. So smartening up stations.
Some of it was to do with signalling and track, but
in the main it was the bits the passenger saw, and the
bits we see when we get on and off trains, smartening
up trains, smartening up the stations would come from
that money.
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There was a second stage to that
which was modern facilities at stations; the kind of
work that has just been done at Treforest Station reflects
that. It is a high quality piece of work with public
address systems, CCTV, dot matrix information screens
- the next three trains shown on the screen, television
screen showing perhaps the next 10 trains, arrivals
and departures and new buildings. That is the kind of
facility that was expected. It is very expensive and
it will be interesting to see how the cost of station
improvements varies between the SRA's handling of these
improvements via the Rail Passenger Partnership and
the agreement recently come to between the Welsh Assembly
Government and Wales and Borders Trains, where £2.5 million
has been made available for smartening up stations,
and we will see what the difference in outputs might
be between those two approaches.
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The suggestion being made by the Assembly
Government and Wales and Borders is that by simplifying
everything, by minimising overheads, and so on, it will
achieve a lot more for the same amount of money,
because control is local. There are not a lot of overheads
put on to the schemes, which is the allegation against
Network Rail.
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That, of course, leads us into the issue
of powers over the Strategic Rail Authority. Going back
to the question about Scotland which said I would
put that into context, in Scotland, the powers over
the SRA are in two forms: one is a power of direction
and control. So long as the directions given by the
Minister for Transport in the Scottish Executive are
not contrary to those of the Secretary of State for
Transport, then the SRA must follow those direction
and guidance, and that is for all services within Scotland
and, indeed, it does cover some services that run just
out of Scotland. It is essentially the Scot Rail franchise.
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There is another power though, often
less advertised, which is a power of advice and
guidance on cross border services; such as Virgin Trains
to London, Virgin Cross Country services and Great North
Eastern services to London. The equivalent in Wales
would be powers of direction and guidance over the Wales
and Borders services and powers of advice and guidance
over First Great Western and any services which extended
substantially out of Wales in the north, so Central
Train Services, for example, running from Cardiff to
say Lincoln or Nottingham, clearly the writ of the Assembly
Government would extend only perhaps to Birmingham,
and beyond there it would be up to the SRA to decide,
but the working arrangements between the Scottish Executive’s
Transport offices and the offices of the SRA appears
to be particularly good. There does not appear to be
any major problems. It is a matter of sitting down
discussing what the Scottish Executive want, what the
SRA are able to afford and then putting the two together,
and if the Scottish Executive then wish to have a better
service than the SRA say they are able to provide, the
Scottish Executive have the right to spend its own money.
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Ted Rowlands
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May I ask you to pause. In the Scotland
Act the reservations and exceptions, it covers transport
- provision and regulation of rail services is totally
reserved to the UK, so under what competences is the
Scottish Executive exercising this power of direction
over the SRA?
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Professor Stuart Cole
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I think there must have been some
subsequent change.
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Ted Rowlands
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There has been a further transfer
of functions order?
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Professor Stuart Cole
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Yes. I am not a lawyer so I cannot
tell you what the process was.
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Ted Rowlands
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We can track that, but it is post-1990 --
post the Scotland Act?
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Professor Stuart Cole
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Yes. These were powers which were brought
in fairly recently and have only just become --
I think it was April or May of this year
when those powers came in fully, but of course there
has been the setting up of that process for some time.
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I think that is all I wanted
to say initially.
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Sir Michael Wheeler-Booth
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You have said a lot about railways.
What about boats or air? Only railways?
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Professor Stuart Cole
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I can certainly talk about roads.
The reason is that roads are entirely the responsibility
of either the National Assembly or Local Government
in Wales. The indicator, I suppose, is something
as simple as if you have a road which goes from
Wales into England then as some years ago under the
Welsh Office, the Department for Transport built the
Chester Bypass and the dual carriageway trunk road,
but the Welsh Office had not got its section in the
same period and so the A55 was single carriageway and
once you got to Hawarden. You clearly recall that?
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Huw Thomas
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Yes.
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Professor Stuart Cole
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But the idea is that Department for Transport
and the Assembly's transport division would talk to
each other in terms of cross border roads, but all the
trunk roads in Wales, that is the motorways and the
A trunk roads, are the responsibility of the Assembly
Government, and all the other roads, county roads, local
roads, and so on, are the responsibility of local authorities.
Traffic management is the responsibility of local authorities,
so all the roads network is in the hands of Welsh authorities.
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Vivienne Sugar
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I thought there were some problems
over bus regulation which, because they are not devolved,
even though the Assembly and Local Government have got
quite a lot of powers is that you find it very
difficult to get an integrated road transport network
because of bus operators being private organisations
regulated by an English based body.
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Professor Stuart Cole
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Yes. Let me say a little bit about
that. The bus situation is that funding for bus subsidies
is provided by County Councils; these days, of course,
within their groupings, such as Swift, and so on, that
I mentioned earlier. That gives a more regional
cohesion to buses being provided. In addition, of course,
there is the concessionary fares scheme which is a national
scheme, provided by the Assembly Government, funded
by the Assembly Government. The passes are issued by
local authorities and local authorities may provide
some additional facility in terms of rail transport
if they wish, but that is free travel for the over 60s
and some other groups.
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The regulation of buses in terms of safety;
in terms of numbers of vehicles, where they might be
located for overnight accommodation, is in the hands
of the Traffic Commissioner and the Traffic Commissioner –
Mr David Dixon is the Traffic Commissioner for Wales --
is also the Traffic Commissioner for the Midlands. He
is responsible to the Secretary of State for Transport,
not even to the Secretary of State for Wales as was,
but the responsibility for regulation in terms of where
buses may run is also in the hands of the Traffic Commissioner.
This does present a difficulty in trying to integrate
buses and trains. You are quite right, the regulation
of bus services is the responsibility not of the Assembly
Government at all. Therefore, any attempt to try to
integrate -- even if the railways were transferred,
powers of direction were transferred to the Assembly
Government, bus operators are private companies almost
in their entirety. There are one or two companies remaining,
such as Cardiff Bus, but the vast majority of companies
are private companies, and many of them are part of
large groups like Stagecoach and First, and their primary
responsibility is profitability, and that is a private
company's objective.
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They may come into a contractual
arrangement with a County Council to run certain
additional services. They may run additional services
because they think it is profitable, but they may also
cut services because they think they are unprofitable,
and the only amount of notice they have to give is 56
days. That is not an awful long time for a Local Authority
to try and work out what it might do to try and replace
a bus service.
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Ideally, I believe, we would have
the same kind of facility for buses as there is for
trains, with a franchising arrangement by the consortia
would probably be the most appropriate body to do it.
A franchising of buses in the same way as the train
franchises - buses would then similarly have a contract
to provide certain services along certain routes so
that buses and trains would meet one another, which
does not necessarily happen, even when there are very
small numbers of trains and buses, and I can quote
you examples in Llandrindod Wells where there are 5
trains a day and the bus appears to consistently
miss the train by 10 minutes throughout the day,
for reasons which I have never been able to work
out. There are certain regions which have no bus services
at all in major towns. Places like Swansea have passing
bus services but no terminal facility. Bangor has passing
services, but no terminal facilities, although there
is a plan now to built a bus terminal at Bangor
station. Llandudno Junction, which has more train services
than Llandudno Town, similarly, a new facility
is being provided at Llandudno Junction station, which
is something which has been needed for a long time.
The interchange there before was a very difficult walk
even for those nimble of foot, let alone people with
walking difficulties, and places like Llanelli and Neath,
which have little or no bus service in the vicinity
of the station, certainly not one that serves the stations
and meets up with the trains.
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So we are looking at I think a situation
in the bus industry where the only regulation is that
on safety, which is important, numbers of vehicles and
licensing of vehicles and drivers carried out by the
Traffic Commissioner. There is no regulation of how
those buses should be run or ought to be run in terms
of an integrated service with the railway; it is purely
a matter of the companies deciding what their commercial
advantage is or the County Councils coming to a financial
arrangement with the bus companies.
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Sir Michael Wheeler-Booth
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What about air?
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Professor Stuart Cole
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Air transport is, again, entirely the
responsibility of the UK Government. The regulation
of Cardiff Airport, for example, is their responsibility
through the Civil Aviation Authority. The airlines determine
for themselves exactly what they want to do. In Cardiff
the primary air operators now are KLM, Royal Dutch Airlines
and Bmi Baby which is part of British Midland. Interesting
name, isn't it? Bmi Baby is an interesting case in point.
Bmi Baby are able to change their service whenever
they feel like it. Should they decide that the service
say to Faro from Cardiff is not profitable, they can
take that service off immediately. They may then compensate
their customers under the contract they have with the
individual customer, but their argument -- and
it is not just that company; it is all the so-called
low cost airlines -- is that if you are being offered
fares of £15, £20, £30, £40 pounds to go quite long
distances then that is only being done on the basis
that the operation is profitable and once it stops being
profitable then the facility has to stop, so it is not
just that company which is involved.
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The higher cost airlines have more of
a margin in terms of what their load factors might
be on certain journeys and therefore are able to balance
one journey off against another, one timing off against
another.
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So we have two good facilities of different
types at Cardiff airport at the moment. We would really
like to have more. There are one or two other companies
as well who operate, such as Ryanair and Air Wales.
Air Wales is a new company based at Swansea which
runs services to Dublin, Cork, Jersey and London City
airport from Swansea and Cardiff.
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Lord Richard
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Boats?
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Professor Stuart Cole
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Again, privately owned in the main as
are ports. There are port authorities which are within
the State's echo as it were, but the boat companies
themselves are privately owned. That is Stenna, which
is a Swedish company, and B&I ferries,
which is an Irish company.
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Ted Rowlands
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What I am a bit puzzled by on this
SRA issue is here you are sometime since 1999, the Scottish
Executive makes a bid for a specific additional
transfer of function to give itself this power of direction,
at the same time the National Assembly is also highly
engaged in it but makes no equivalent bid at the same
time, saying, "Well, you know, what is good enough for
there, Scotland in this case, is certainly necessary
in our case". Why has this happened? Do you have any
knowledge of what the UK Government's attitude toward
such a bid would be now; having granted it to Scotland
would it not be automatically sympathetic to a similar
bid? I cannot understand why they did not both
make a bid simultaneously.
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Professor Stuart Cole
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The Select Committee on Welsh Affairs
at the House of Commons reported back in December 2002.
There is a new inquiry starting in the middle of July
to continue the inquiry into the railways. The members
were not totally satisfied with what had come out of
the first inquiry. The situation was that an earlier
report from the Select Committee and, indeed, a proposal
I think the year before last from the Assembly
Government, was to transfer the powers I mentioned
earlier over the SRA, to the Assembly Government. The
Government's response both to the Welsh Affairs Select
committee 1999/2000 session, transport and its impact
on Wales, was if I can find the quotation quickly,
they were not persuaded I think was the way in
which they put it; they were not persuaded of the need
to transfer these powers, and they saw any transfer
of power of guidance and direction over the SRA to other
bodies as fragmenting the railway. The purpose of setting
up the SRA, the Government's response at the time, was
to end the fragmentation of our railway network and
to ensure there is a GB wide strategic body.
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Ted Rowlands
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That applies to Scotland as well?
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Professor Stuart Cole
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Indeed so.
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Subsequent to that I presume the
Scottish Executive put forward a Transport Bill,
or some order -- I am not quite sure what the procedure
was -- to change the rules in terms of Scotland
which were then changed. The Assembly Government made
similar representations 2 years ago and have now
made a further representation in the Transport
(Wales) Bill, which is currently in preparation, to
achieve the same objective as they now have in Scotland,
but the Government's response, the UK Government's response,
to the Transport in Wales Report was as negative as
it was in the past, which was that they saw no reason
why the powers should be transferred. They also said
that there was a substantial part -- over-exaggeration
I think -- of the Wales and Borders franchise
not in Wales. The Assembly Government's response to
that in their response to the Transport in Wales report
from the Select Committee was that those issues were
not difficult to overcome, and it is true the issues
being raised by the Department of Transport are issues
which I personally fail to understand.
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There are no difficulties in a set-up
where direction and guidance is what is being given
by the Assembly Government. The Strategic Rail Authority
are still the body who put the whole GB timetable together.
It is not the Assembly Government taking its bit, the
Scottish Executive taking its bit and leaving England
with its bit and three unconnected railways. The SRA
have the expertise to do the job, they are given direction
by the respective governments.
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Ted Rowlands
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So in summary the distinction that has
been made in the Scottish example is that Scot Rail
is pretty well co-terminus with the Scottish border,
whereas the Wales and Borders, because it includes chunks
in that area, is not of the same kind of category. Is
that basically their defence?
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Professor Stuart Cole
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Yes, that is their defence. That is their
argument. The bit of railway we are talking about, if
you can imagine the railway network in Wales is a reverse
E; you have a line going up the border which stretches
from Cardiff to Chester, runs by Hereford, Ludlow, Shrewsbury
and Chester. We then have three railway lines going
in, in the south, in the middle and in the north, and
it is that little bit of railway running along the border
almost which the Department of Transport is saying,
"This is the reason why". Because the SRA are still
the co-ordinating body, there is no difficulty in ensuring
that those areas get their fair share of trains. There
are markets there to be tapped. No operator is going
to not serve Hereford, Ludlow, Shrewsbury, Chester adequately,
because they are big centres of population. What we
will get though is improvements to places like Wrexham
which at the moment has an appalling railway system,
with single track in many places, so the reliability
as well as the frequency is restricted.
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To the SRA one has to be realistic. The
SRA's primary objective is to look at mass transport
of people, and there are three big areas, the East Coast
Main Line, the West Coast Main Line and London and the
South East. Their Franchising Director Mr Nick Newton
has said publicly that what the railways are good at
is moving large numbers of people over large distances
and they are not so good at anything else. That was
its implication, and he made this in an article in one
of the railway journals, and it was quite clear. He
also said in the same article that the SRA did not mind
if they were unpopular or not.
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Now that means that to the SRA the Welsh
railway services are at the edge of their primary agenda.
They have a primary concern at the moment for rebuilding
the West Coast Main Line, which has not been rebuilt
since the 1960s and that is a scheme which originally
was going to cost something like 3 billion pounds and
escalated to 10 billion. The SRA are therefore saying
from their point of view, "This is our priority, we
have to think very carefully about whether we will spend
money anywhere else", and it is not just in Wales; it
is the West Country; it is East Anglia; it will be Yorkshire,
and so on; branch lines will come second.
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The primary inter-city route into Wales
from London to Swansea is unlikely to get any major
investment for the next 15 years unless First Group
decided that they are going to spent the money themselves.
The SRA will certainly not be funding Network Rail or
any major enhancement of the kind that First Group proposed
just before Christmas of a new high speed train travelling
on a new line between London and South Wales and
Bristol, travelling at around 200 miles an hour, therefore
reducing the journey time from Cardiff to London to
something like 70 minutes. That is the French technology;
that is all it is. It is not new technology; it is 20-year
old technology in France.
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Vivienne Sugar
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Can we get that to Swansea?
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Professor Stuart Cole
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We could, even to Llanelli.
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I will go along with anything which increases
railway line speeds.
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Paul Valerio
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That is because of the heavy reliance
on subsidy in rail.
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Professor Stuart Cole
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Yes. The argument is that for the big
firms and, the passenger numbers, are on the East to
West Coast mainlines. Those are the links to the big
cities from London and on the West Coast Mainline you
have Birmingham, Manchester and Liverpool and then Glasgow
to the north, so you have very heavy flows of traffic.
But even there the original scheme for the West Coast
Mainline was to have 200-mile an hour trains, that has
now been worked downwards so that the service being
provided will be about 140 miles an hour. We are even
now putting in old technology, where the French are
putting in on the similar kind of lines technology which
is up-to-date and the kind of speeds which that technology
provides.
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Ted Rowlands
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I wonder if you would give us --
I do not know about my colleagues; I never
understood who was who - the Office of the Rail Regulator
controls fares. Presumably, that office could do more
good or damage to integrated bus/rail transport adjusted
by its fare policy than almost any of the other organisations.
What is the current Assembly relationship with the Office
of the Rail Regulator? Has it any hooks into it on any
shape or form?
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Professor Stuart Cole
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There is no formal link between the two.
I think recalling back the Transport Act 2000,
there was not even at the beginning in the Transport
Bill a relationship between the Assembly and the
Strategic Rail Authority. It was only when the Select
Committee pointed out that there was no link between
the two that the SRA were required to consult the National
Assembly.
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I just think there is something
I might be able to help you on your earlier question,
in terms of where did the new powers come from? Maybe
they came from the Transport Act not from the Government
of Scotland Act in terms of Scotland, but it is just
something in the back of my mind.
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Ted Rowlands
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It was not a Transfer of Function
Order; it was actually written into a piece of
legislation?
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Professor Stuart Cole
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I think it may have been because
certainly the requirements of the SRA to consult the
National Assembly was in the Transport Act 2000, so
the facility for Scotland may well have been in the
same legislation. That is what has suddenly crossed
my mind.
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Going back to your question about the
relationship, the SRA are now required to consult the
Assembly Government, but that is all. They do not have
to take any notice of it. I expect the Assembly
would be very cross if they did not, and the Assembly
has been very cross because they have not necessarily
taken the advice. The SRA authorised, for example, the
direct service between Cardiff and Newcastle and Scotland
last year. The service was introduced in last year and
was withdrawn in May of this year. I am sure that
was not with the agreement of the Assembly Government,
and yet that decision actually was taken by the SRA.
The decision to withdraw was taken by Virgin Trains,
but the real decision behind it was taken by the Strategic
Rail Authority, because they are effectively funding
Virgin Trains and the decisions are much more in
the hands of the SRA now than they were under the previous
version of the SRA and, indeed, under the Officer of
Passenger Raid Franchising.
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So that is only the relationship between
the two. There is oddly no relationship between the
Strategic Rail Authority and local authorities, nor
indeed between local authorities and the SRA. When the
Transport Bill was passed, 2000, the Strategic Rail
Authority, as I say, only had to consult with the
Assembly Government in Wales and yet an action taken
by the Strategic Rail Authority might well involve local
authorities land use policies. It may well involve their
roads policies. A Local Authority that might be
thinking of enhancing the quality of the facilities
around a railway station in terms of land use development
might then at the same time find that 50 per cent
of the services for that station have been withdrawn,
because there is no requirement for either side to consult
one with the other, certainly not the SRA with County
Councils.
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Sir Michael Wheeler-Booth
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Professor Cole, we have been told
over and over again on this Commission that one of the
real problems that people would like the Assembly to
tackle is improving transport in Wales. The picture
you have been painting is dismal from that point of
view.
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Professor Stuart Cole
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I am sorry about that, but the picture
is not a happy one at present. Were we to see two
things take place then there would be a substantial
difference: one is the powers involving the railways
transferred to -- and this is a personal view --
powers involving the SRA transferred to the Assembly
Government; powers of licensing and franchising of buses
transferred to the Assembly Government and then onwards
to the consortia, because I think that is the appropriate
place for local bus services to lie with the consortia,
and those two bodies working together would enable us
to start an integrated process for public transport.
We have then the Local Authorities responsible for local
roads and also for land use planning. So, for example,
if a new housing says estate of 2000 homes is built
the railway station is built at the same time, which
was the plan, at a site in the Vale of Glamorgan and
it is more or less on time – not quite. But land
adjacent to the railway station could have been reserved
for use for park and ride. Now at Rhoose, near Cardiff
there are 2000 new homes and hardly anywhere to park
next door to the railway station. The idea is that people
will be encouraged to use the train at the new railway
station to go into Cardiff and therefore not use their
cars. It was more or less the perfect transport and
land use strategy, except for the park and ride facility
for those people living more than 10 minutes walk
away from the station.
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So we need that kind of cohesion which
involves a partnership between the Assembly Government
and the local authorities, because they all have different
roles to play.
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The role of the Traffic Commissioner
I think is key to this as well. There are powers
of the Traffic Commissioner which also might be transferred
to the Assembly Government, or responsibility for direction
over the Traffic Commissioner and using the Commissioner's
office to carry out the work.
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Now those give us the structure within
which to operate. The second of the desires perhaps
to reach a stage where we would have substantial
improvement in public transport, not just per se but
to try to encourage people to leave their cars at home,
does involve substantial investment. I have calculated
that over the next 10 years we would need somewhere
in the region of £3 billion in Wales. That was a figure
I worked out 2 years ago. I do not see
any major difference now, other than a little inflation
perhaps. What we are likely to get is £1.2 billion.
That means we are £1.8 billion short. What does that
mean in terms of what the public will see? It means,
for example, on the South Wales Main Line a service
running from Carmarthen then via Bury Port to Cardiff
and Newport which will run every quarter of an hour.
Half of that service would go on the main line to Bridgend
to Cardiff, as it does; the other half on the Vale of
Glamorgan line. So there will be half hourly services
at places like Pontypridd and half hourly services on
places like Llantwit Major, which will be whole of the
length of South Wales. Rhoose, which is a commuter
station at present, could become the gateway station
for the airport, which would give access for people
from the valleys and also from West Wales into the airport,
and also from parts of South West England and the South
Midlands of England directly into Cardiff Airport. That
enhances the position of Cardiff International Airport
quite substantially.
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That kind of investment we are talking
about, for the South Wales Main Line we are talking
about an investment figure of about £400 million:
new trains, new track, faster track. It pushes up line
speeds along the whole of the route to 100 miles
an hour. That is not new scientific development. It
is still a slow railway but it is a better
railway than the one we have now. Similarly, on the
valley lines we are talking about £250 million
to provide a 10-minute headway, (10-minute frequency)
on the lines between Pontypridd and Cardiff; similarly
then going onwards to Pennarth, Barry and Llantwit Major.
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On the North Wales Main Line, a lot
of work has been done in terms of new trains on the
North Wales Main Line. There it is a matter of upgrade
in the track, and the cost there is around 150 million.
There are some new trains required in order to increase
the frequency on that route, and then a further
£400 million on other operations such as Wrexham
and the Cambrian line.
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The total cost in investment terms is
£1.2 billion. What we are likely to get in investment
over the next 10 years is £200 million. That
is why the picture is not as bright as perhaps as we
would all like to see it. I think that is the issue.
It is simply a matter of investment and that investment
then, as we have seen in other countries, encourages
people to think that the railway is a pretty good
way of getting around; the trains are not crowded, "I
can get a seat, they are frequent, "I do not need
to know the timetable and they start at 6 in the morning
and they finish just after midnight.
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Vivienne Sugar
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I am afraid of what it would cost to
renationalise it.
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Professor Stuart Cole
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I do not think it needs to be renationalised
particularly; it is control which is the issue and decision
making on investment in the trains and investment in
the track. There is a lot of argument about the
extent to which the private sector's objective differs
from those of the public sector, and that is an issue
I think which probably does need a lot of
investigation to see whether in fact it would be cheaper
to go back to an old system. Certainly Network Rail
appear to be of the view that effectively renationalisation
of part of the network is being done, and one can make
one's own interpretation of whether Network Rail is
a private company or a public company.
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Paul Valerio
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Given the realistic estimates you have
given us and the financial problems of the railway,
we can forget railway serious railway expansion. Therefore,
the alternative then to relieve the congestion is the
motorway. You were talking about the relief motorway,
did I hear you correctly when you say that the
funding as well as the control of the new motorway would
be entirely within the Welsh budget from the Assembly?
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Professor Stuart Cole
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Yes.
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Paul Valerio
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We are no better off either.
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Professor Stuart Cole
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No, and indeed, the cost is not that
much different. The cost of I think the lowest
estimates I have seen for the M4 -- for the
new road around Newport is something like £370 million --
numbers of that order -- and there we are, we are
talking about the same kind of investment, but for the
whole of the South Wales Mainline of £400 million.
The money has to be spent if you want to relieve congestion,
but of course you do not necessarily relieve the environmental
issues which come as a result, for example, of
a motorway.
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Peter Price
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Are you saying that if the Assembly Government
had more powers in respect of strategic rail direction
that it would be a real choice for them between
those two things and that that is not a choice
at the moment, or are you really looking in all you
were describing at a Welsh part of a big jigsaw
for the whole of the UK of massive underfunding on rail
and, therefore, that we are just seeing a part
of a totality that we really cannot do anything
about because it is about a policy at UK level
that cannot be separated out of under-investment?
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Professor Stuart Cole
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It is a matter of under-investment,
and that applies to all parts of the UK. We have seen
under-investment in the railway; I think it is
pretty well generally agreed now. Part of that was due
to the structure of Railtrack. Railtrack was an interesting
organisation. It had -- I will not go in detail
into its financial position, other than the outcome
was that (a) it did very little investment, and (b)
managed to go bankrupt. Not very many companies manage
to not spend money and then go bankrupt; it is usually
one or the other.
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There were a lot of problems with
Railtrack. It was a very expensive organisation
to run. Why that was I think is a matter for
a further enquiry perhaps and a lot of work
has been done on that. So there was an issue to do with
the financial cost, financial cost level.
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Looking forward from where we are, in
answer to the first part of your question were the powers
of investing in the railway transferred and funding
of the railway transferred to the Assembly Government,
the Assembly Government then has a choice on how
to spend its money, and that is really what we are talking
about. It is a matter of choice in terms of solving,
for example, the road congestion problems on the primary
routes through South Wales from say the Severn Bridge
through to Swansea and West Wales.
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The big problem lies in the Newport/Cardiff
area at the moment. The predictions from the Assembly
Government are that we will see a major congestion
problem arising in that area. We see it already. The
widening of the M4 is an attempt to try and relieve
that, but the Assembly Government would then have a choice:
do we need to widen the motorway? Or do we in fact look
at improvements to the railway?
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The funding currently going to the SRA
for improvements to the railway throughout Great Britain,
because it is the Great Britain network we are talking
about -- Northern Ireland which has a totally
separate regime altogether -- but for the Great
Britain network we would then have a decision being
made in Wales about the extent to which we improve services
within Wales and that would not be directly affected
by the SRA's priorities in primary routes in England,
because there would be a fund, partly as part of
the block grant, which is currently paid to the SRA.
So an amount of money would need to be identified that
was currently paid to the SRA for funding railways in
Wales, and one could then have an argument about the
Barnett Formula and whether that is an appropriate basis
to make that decision, but that level of funding then
is transferred in a block grant to the Assembly Government
who then become responsible for subsidies and investment,
and it is then, as with the Scottish Executive, up to
the Assembly Government to decide whether or not it
will spend more money.
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Peter Price
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That means that the money, that the power
merely of direction that we were talking about earlier,
is not the only power you are seeking vis-a-vis the
transfer of - vis-a-vis the Strategic Rail Authority.
You go beyond that. You are calling for the transfer
of the function in respect of the railways that are
actually wholly within Wales, the function and the money.
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Professor Stuart Cole
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The money certainly. The power of guidance
and direction is one of, if you like -- let us
take an example: doubling the current single track between
Chester and Shrewsbury via Wrexham, the case in point,
I do not know what that would cost, but let us
say the figure is £20 million pounds, that kind of investment,
currently the decision is made by the SRA within its
whole range of priorities. Now that decision would subsequently
be made by the Assembly Government in terms of directing
the SRA to dual that line, but at the same time agreeing
with the SRA a funding amount to carry out that
work.
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Peter Price
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So the direction -- when you talked
about direction earlier, implicit in that transfer is
that money would shift with it and with the direction
there is money from the Assembly's budget.
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Professor Stuart Cole
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Yes, (but please see reply to Ted Rowlands
on funding). That is exactly the power in Scotland,
that the Scottish Executive give directions and also
provide the funding, because the money that previously
went to the SRA in Scotland now goes to the Scottish
Executive.
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Lord Richard
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Can I thank you very much indeed.
You have exposed a lot of things like this that
we have not sorted out in any kind of detail at all
and we are very grateful to you for it.
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Professor Stuart Cole
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My pleasure. Thank you very much for
the invitation.
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