The postponed legislation for creating the new ’guiding mind’ for Britain’s network will now be tabled “before the next election”, according to Great British Railways Transition Team Lead Director Anit Chandarana.
It sounds like an even greater delay than that announced by Anne-Marie Trevelyan (who briefly served as Secretary of State for Transport under Liz Truss) in October. She suggested it could be taken in the next parliamentary year, once the immediate demands of the energy crisis have been addressed.
Pushing through a major package of reforms just before an election has its risks - a change of government could result in the plan being aborted midway through, which looks certain to be the case if Labour sweeps to power in an election in late 2024 or early 2025, the last possible dates for a General Election.
But with the quick succession of two Conservative leaders to the premiership without facing the country, and the perfect storm of the Ukraine war, the cost-of-living crisis and successive Government scandals, many are now planning for an early election. That risks GBR being killed off before it even reaches the statute book.
Railway Industry Association Chief Executive Darren Caplan has described the delays to GBR as “disappointing”, suggesting that they could deprive the railways of the “clear strategic direction” they need.
But Tan Dhesi, the man likely to become Rail Minister under a Labour government, was surprisingly nonchalant when asked about the delays at a Labour conference fringe event in September.
“Look mate, what hasn’t been delayed?” he quipped.
“What we’ve been arguing is there should have been a hiatus while the Government sorts itself out.
“They’ve copied and pasted some of the ideas formulated by Andy and Rachael and others, and then a lot of that reform just isn’t taking place because the industry or the country just doesn’t know which way the Government is going with this.”
In contrast, Dhesi tells RailReview in an interview in November that Labour is determined to signal its direction of travel.
“We will set out our vision - I think Sir Keir Starmer and Angela Rayner and the rest of the team have been very clear on that. I think we’ve seen that with the £28 billion green investment pledge from Rachel Reeves, our Shadow Chancellor, and within that there is a large scope for public transport.”
The basis of that vision is public sector operation of the passenger railway: “We at the moment feel that railways are being led into managed decline - 19,000 services have been cut, and that’s why the Labour party feels that under public ownership, we can determine the level of operation - the level of services - so that no communities are ignored.”
But beyond this headline policy, many in the rail industry feel that Labour’s policy is itself full of vagaries. One rail consultant told RailReview that the document the party produced in early 2020, GB Rail: Labour’s Plan for a Nationally Integrated Publicly Owned Railway, had “significant gaps”.
And while the document remains live on Labour’s website and is (according to a source close to Shadow Transport Secretary Louise Haigh) still party policy, under Keir Starmer’s leadership the party has appeared reluctant to confirm this publicly. And now, for the first time, its rail spokesman appears to be advocating a different legal structure to that which the document outlines.
Dhesi’s CV is impressive. Born in Slough and raised in the Indian Punjab and Kent, he gained degrees in maths, applied statistics and South Asian history from UCL, Oxford and Cambridge. But most of his working life has been spent in the construction industry, giving him a valuable insight into the world of contracting and supply chains - something which has not gone unnoticed among industry insiders.
A former councillor and ceremonial mayor in Gravesham (Kent), Dhesi was elected MP for Slough in 2017, at the General Election in which Jeremy Corbyn’s Labour defied expectations of a resounding defeat and deprived Theresa May’s government of an overall majority.
After Labour suffered heavy losses two years later, the comfortably re-elected Dhesi served as Parliamentary Private Secretary to Corbyn during the final months of his leadership. He supported Lisa Nandy in the 2020 leadership election, but was soon appointed by the victorious Starmer as Shadow Minister for the Railways, and he has remained in post ever since.
The provisions set out in GB Rail, published by Andy McDonald shortly before he left the Labour transport brief, have been discussed at length (RailReview Q3-2022, Q3-2019). But its central thesis is the creation of a “single publicly owned railway company, GB Rail”, overseeing both devolved transport authorities and business units, including “GB Rail Mainline” for passenger operations and “GB Rail Freight”.
If that’s not clear enough, it sets out explicitly: “All Business Units will be part of the GB Rail company, not legally separate subsidiaries, and will manage both rail services and rail infrastructure, so as to facilitate maximum integration.”
But sitting down over tea in Portcullis House (the modern extension of the Palace of Westminster), Dhesi says this will not be the case - at least initially. The first clue of his thinking here is his praise for how “in France, or in Germany, or any of the other nations, by taking greater charge of their railways they were able to deliver better value for money, cheaper fares. They were also able to electrify the majority of their railway network.”
In line with the European Union’s “rail packages” of directive legislation encouraging competition, both SNCF and Deutsche Bahn have created separate legal entities for infrastructure and operations. McDonald believed that the structure outlined in GB Rail would still be workable if Britain remained in the EU, but that Brexit would make it easier still.
When pressed on whether track and train would remain under “separate legal entities”, Dhesi says: “Originally, I think that’s how we would want to set them up. It’s a gradual process and then we can see what would work best going into the long run. That’s where we need to gradually take operations and then build upon that.
“We already have Network Rail there in terms of our tracks… but we want to make sure that we have those entities for our tracks as we already have. Also another one for our services, and that we have those organisations focused towards delivering for the public, but also working in close collaboration under the auspices of the Transport Secretary, under the auspices of the government.”
Dhesi still describes the need for “an overall guiding mind”, but it would seem this is no longer a single company and single employer for infrastructure and operational staff, as set out in GB Rail.
“We don’t want to go back to how it was 20, 30 years ago. We want a railway fit for the 21st century… what fits the scenario as we face it now,” he says.
The rail unions - Labour’s affiliates ASLEF, TSSA and Unite, and the non-affiliated RMT - have also expressed their support for a more devolved, democratically accountable system than that which existed with British Rail.
At a fringe meeting at this year’s TUC Congress, ASLEF Assistant General Secretary Simon Weller said there was no state-owned railway worth emulating in the entire world, because the only ones in existence were either bureaucratic monoliths or “state capitalist” set-ups (of the kind favoured by the EU), with separate legal entities interacting with each other in the manner of private companies.
“If you’re a trade unionist, you’d say it’s better not to create those boundaries in the first place,” says a legal source with experience of EU regulations.
“EU regulations on separate track and train management have created the division that you’re trying to get away from. I can see why they’re saying the European model is not what we want.”
The legal source believes that Northern Ireland Railways, which remained in the state sector at the time of privatisation, offers an interesting model for Labour.
"It's an example of something that works here. What you’ve got, firstly, is a very small railway system, so it isn’t at scale. But what they’ve had throughout is one company which owns the whole railway system, with infrastructure and operating wings in a coherent management structure. They provide a very close integrated system where basically they’re talking to each other all the time, really efficiently without serious internal friction.”
Dhesi is more sceptical: “I think Northern Ireland is very much a special case. How the railways have been run there, we cannot base the rest of the UK on the system that is there. But we have looked into various models within our Shadow Transport team that are working in other parts of Europe, to ensure that nations of similar scale - for example, Germany, France and Italy - we’ll look at the best practice there.”
Switzerland, which sets public transport service guarantees in law, is also of interest to Dhesi. This will be music to the ears of transport campaigners across Britain, who have often held it up as an example of how services could be rebuilt to directly respond to the needs of citizens.
“I’m really inspired by the Swiss model and what they’re able to achieve in very rural parts of the country,” says Ellie Harrison, the founder of Get Glasgow Moving, a campaign for integrated ticketing and better public transport in Scotland’s largest city.
“It’s because they have a statutory duty that everybody has a right to public transport. And a service, depending on the size of the place where you live - either every hour, every half-hour or every quarter of an hour, seven days a week, 0600 until 0000. That’s law.
“I think that would be a real game-changer to get something like that. There was a debate around that when the Transport Bill was going through Parliament. If there’s a statutory duty and local authorities have to deliver it, then hopefully they will think about the most cost-effective ways of delivering it, and the most reliable ways of delivering it. It’s obvious you need an integrated system.”
Says Dhesi: “We’ve looked at the Swiss with their integrated timetabling, how things can align so that the passenger can have that convenience of getting off a train in (say) Slough station, getting onto the bus, and then gradually using other forms of public transport. The integration of timetabling, the siting of bus stations with rail stations and so on, that is also crucial. We’re always open to ideas, and the last two years that I’ve had the privilege of serving as a Shadow Rail Minister, that’s what we’ve been able to do.”
However, the rail consultant queries: “Are we prepared to pay the level of tax to get the Swiss-style level of service?”
And like Harrison, Dhesi stresses the need for integrated ticketing: “If an Oyster-type system works for London, why can it not be the case for Manchester, or Liverpool, or Birmingham, or anywhere else around the country that so desires it?”
Dhesi repeatedly returns to the need for service levels to be set by the government.
“If someone’s waiting at a particular train station, previously they would have been accustomed to two or three trains an hour. Instead, now they only have one train an hour,” he says, referring to the continued reduction on some routes after COVID service cuts.
“That’s no way to have that affordable, accessible, convenient rail service. We know what the British public expect: they want something that is affordable, they want something that is accessible, in terms of not just cost, but also accessibility for people with disabilities. And they want it to be convenient.
“So, we need to have that as our primary focus as we deliver. That is not just being done from some sort of ideological , it’s being done because it’s in the best interests of our country.”
Motivations are an interesting question when it comes to rail policy. The EU’s prescription of increased competition, rolled out through successive directives over the past three decades, has always been justified on the basis that it would bring value and enhanced service levels for the travelling public.
“Where that was going over time was to create a fallback situation where you could not have a monopoly government-based railway system, because the idea was that killed competition,” the legal source says.
“The whole project for the past 30 years has been to break up enterprises and introduce more independence and transparency by degrees.”
But by turning the tide on competition, Labour is essentially saying that the EU was either misguided or disingenuous in saying this would deliver for the consumer.
“I think the Government themselves have rejected the notion that the railways are delivering for the British public,” Dhesi argues.
“It needs a government that is committed to taking charge of our railways, because for a nation that pioneered rail, we are now lagging far behind on electrification, lagging far behind on value for money, in terms of the extortionate fares that passengers have to pay.”
Or, as the legal source asks: is Labour’s motivation to deliver the best service for the consumer at all? Or is the party more focused on creating an efficient railway network?
“It needs to be passenger-focused,” Dhesi says, when asked if he sees an opposition between these two priorities.
“Ultimately, we know passengers want an affordable, accessible and convenient rail system. What we also want is to deliver an increased level of freight. That is where the direction, the vision, the long-term planning from government is essential.
“And I don’t see that there is a problem in having it to be both passenger-focused and delivering an efficient rail system. We need to have them both, I think, and that’s what we will endeavour to deliver upon.”
However, the questions on the minds of many passengers will be more straightforward. Through the news media, they are unlikely to hear any further policy detail beyond the word “nationalisation” - and the reality of taking back franchises as they expire may not meet their expectations.
Put bluntly, many in the older generation will expect a return to British Rail. And aside from the slow pace of franchise expiry, it looks increasingly likely that freight and open access operations will remain in the private sector.
But an incoming Labour government would likely be held accountable by passengers, opposition parties and the media (much of which will be hostile to Labour's one remaining public ownership pledge) for every aspect of operations and infrastructure.
“I think the British public will know that it is a gradual process - it’s not going to change overnight,” Dhesi says, when asked how Labour will manage such expectations.
“For a variety of reasons, we have to think of rail in the long term - we cannot have a short-term vision. I think the British public will take that into consideration, that they will see the benefits, in a gradual manner. They will see that where we are at the moment with various operators, sometimes not offering the appropriate level of services, 19,000 services have been cut.”
Public operation will also “give us the opportunity to bring down fares”, says Dhesi.
“At the moment, we feel that rail fares are too high. In fact, they’re 49% higher than they were in 2010, and also fares have risen twice as much as wages. Now, if we price ourselves out, people will not be going by rail - it will be a car-led recovery after the lockdowns and the pandemic. That’s why we want to take charge of the service level as well as, obviously, the tracks.”
But Labour will also have to deal with the demands of the workforce and the trade unions, which still enjoy a close relationship with the party. Having criticised the Conservatives’ approach to industrial relations so forcefully, what will Labour do differently?
“Under a Labour government, rather than the current Conservative approach, you will have a government that is focused and recognises the importance of industrial relations, that recognises the importance of the suggestions and views of various stakeholders within the industry, and also taking into full consideration the views of passengers,” Dhesi says.
“That is why I’ve said recently on the floor of the House that what we actually have is a Government that has been gunning for strikes. The strikes have been Government-induced, in that they wanted to create a wedge issue to divert attention away from whether it was Partygate or Pinchergate or various other problems that they’ve had.”
Dhesi focuses on the importance of dialogue.“In fact, I asked the previous Transport Secretary : ‘If I, as the Shadow Rail Minister, can sit down with the chief executive of Network Rail, can sit down with the various operators, can sit down with the general secretaries of the rail unions, what is stopping the Transport Secretary from doing so?’
“That’s where that leadership needed to be from government ministers, rather than hiding behind somebody else or given that they have a mandate. That’s where it’s incumbent upon them to show leadership, to show that they can resolve the impasse as soon as possible. That’s the difference that you’ll see under a Labour government.”
Although Labour in government last time round did not turn the tide on the franchising system, there were always many in the party - not just on the left - who favoured ending it.
When Corbyn shifted Labour’s policy to public ownership in 2015, few voices were raised in opposition. And with Tom Harris, probably the most passionate supporter of the free market to have served as Rail Minister under Labour, having quit the party during Corbyn’s leadership, there are now even fewer.
However, one lone sceptical voice in the party ranks is Lord Berkeley, a former civil engineer who worked for Eurotunnel for ten years from 1985, and later became chairman of the Rail Freight Group.
“It all comes back to what you mean by public ownership,” he tells RailReview.
“Public ownership is something that’s an essential part of Network Rail - you couldn’t envisage having the infrastructure owned by anyone other than the state, the same as the state owns all the roads.
“When it comes to what goes on the track, freight is pretty much all in the private sector, and it has its attempts to get more capacity - sometimes it wins, sometimes it doesn’t. I'm assuming doesn’t want to nationalise the manufacturers - you couldn’t really.”
Berkeley continues: “I’m not convinced public ownership is in the national interest. What are we trying to achieve? We’re trying to achieve an efficient, reliable and safe railway, that fits with whatever politicians decide should be.
“I question whether the state will do it any better, rather than having the private sector reporting, responsibly, to the state to try and give the passengers the best possible deal. What’s becoming clear on the continent, and here on the East Coast Main Line, is that on the long-distance traffic, competition grows the market.”
GB Rail calls for a “case-by-case review to determine the best ownership arrangements for the existing privatised rail freight operators”, with Direct Rail Services (already state-owned through the Nuclear Decommissioning Authority) transferred to the GB Rail freight business unit.
The document sets out the need for “Chinese walls” within the unit, to ensure DRS does not get preferential access. But the rail consultant interviewed by RailReview is sceptical that this would work. “Will it artificially reduce the share prices of the other FOCs?” he asks.
However, Dhesi’s focus when it comes to freight is not ownership, but volume: “The key concept is to have annual targets. If other nations can have those annual targets… for example, even in Scotland we’ve got that. There’s been a great deal of work in Wales as well with the publicly owned Transport for Wales.
“We want to make sure that there are annual targets, that the level of freight is increased. That can only be done if we have increased capacity in the system. That’s why we are firmly in favour of HS2 and Northern Powerhouse Rail, because it would open us up to increasing the capacity to have more freight.
“To tackle the climate crisis, to ensure that we are decongesting our roads, we need to have a focus on freight. And that can only be done by increasing capacity. And I think that will lead many in the logistics industry to seriously consider using the train for freight.”
But if this is the aim, how will Labour incentivise a modal shift from road and air to rail?
“Once we have that capacity, once people within the logistics community realise that we can, that they’ve got a government that’s investing”, the rest will follow, Dhesi believes.
It’s about making it clear “that they can move their freight around a lot easier than always being subservient to passenger services”, he adds, saying that sometimes means “they cannot even operate that freight service, and therefore they do not even have an option”.
For the rail consultant, the logistics sector is unlikely to favour rail on the scale that is needed for as long as it is cheaper to move freight by road. But there are ways of navigating this, he believes, such as taxing road freight - unpopular as this might be. New freight operators, some using repurposed passenger rolling stock, could also play a part in bringing the price per unit down for smaller and mixed loads.
It’s an aspect of the policy which could end up being played off against other commitments in Labour’s manifesto. Might the rail industry and rail unions have to compete with the interests of other sectors?
Brexit, the consultant says, means that isn’t necessarily the case.
He suggests that newer generations of the road haulage workforce would much rather take on jobs in the short-haul HGV sector, which would be empowered to expand around revived regional rail freight terminals. However, Labour does not yet appear to have developed its thinking on rail freight to this level of detail.
In another deviation from McDonald’s vision, Dhesi confirmed at Labour’s 2022 conference that the party's “priority is not about the ROSCOs , it’s about the network and the operators”.
The public procurement of future rolling stock orders, set out in GB Rail, would “depend on where we find the economy” upon taking office. Now he reaffirms that rolling stock won't be the “primary focus”.
He continues: “We need to ensure that the focus is on the current chaos and catastrophe where many people cannot even get between the major cities in a timely fashion, with the cancellations that there are, a lot of people having to pay silly prices, only to stand on a train or find that those train services are not running.”
But he is open to public procurement of rolling stock on a regional level, such as that being pursued by Liverpool City Region Mayor Steve Rotheram for the new Merseyrail electric multiple units.
“They will have the power, in terms of devolution, to embark upon what they think best fits their metro region. For us, the main thing is about ensuring there is investment in tracks and to get the timetabling and the service levels correct, and we can then build upon that thereafter.”
At the conference, Dhesi was repeatedly pressed by industry representatives over the future of open access operators. In return, he repeatedly reiterated that he had championed the cause of open access companies when they were lacking in pandemic support, but he declined to confirm the future of such operators under a Labour government.
Instead, he said the party would be “outlining exactly how we would be viewing the role of open access operators, and certain places where certain operators could enhance the overall operation”, adding that this announcement would come “in the very, very near future”.
The GB Rail paper had proposed that “a value-for-money assessment will consider whether it would be cost-efficient to purchase all or some open access passenger operators and rail freight firms”, but, similarly, did not commit. Open access rights were codified in European competition legislation, but Brexit allows a future government the flexibility to decide if they are desirable.
“If you’re a freight operator or an open access operator, and Labour come in and say we’re changing the system, either you say ‘I need to continue to have my track access rights on the current basis within that model - which is probably a time-limited thing - or you say you’ll have to buy me out’,” the legal source says.
“Government makes laws and they ultimately have the power to take away the ability to have open access operators. If they didn’t compensate those businesses at all, there might be human rights-style challenges. However, it depends on what precisely is done.”
For Labour’s approach to this question - and many others, those of rolling stock, freight and industrial relations - we will have to wait.
However, what is clear is that the GB Rail opposition White Paper can no longer be taken as a guide to the party’s first principles. Dhesi's divergence from it on the subject of structure seems particularly significant: once aspects of the state-owned operation are interacting as separate entities rather than business units of the same legal company, it surely makes it easier to maintain the involvement of private sector partners, too.
If Labour wins, Dhesi and his ministerial colleagues are still likely to face an uphill battle in implementing public operation, especially if that means costly measures such as significant fare subsidies.
In the meantime, much as he is keen to build relationships and trust within the rail industry, his primary job is to develop a vision which resonates with the voting public.
“I think even the Government has acknowledged that the fragmented, privatised, failed model is just not working - not for the passenger, or for rail workers, or for the taxpayer,” he says.
“That’s why 25% of it is already in public ownership - the majority of the rest of the 75% is in public ownership, but it just happens to be European governments owning it. The British public is now looking to its Government to take charge.” ■
