Labour policy on open access

[weeklycommuter]

There is a view amongst some at the DfT that if OA can’t pay increased access charges, then they could be transferred (by “agreement”) to GBR rather than just cease. How much political support there is for that, we will see.

For some open access services at least, such as when it it is the main or only direct train service to London from some cities, the Government would politically have to ensure the service continues either by ensuring the open access terms remain attractive so the open access train operator continues to run the service or paying for the trains and staff so a Government controlled train operator runs the service instead. Allowing these train services to cease running would not be an option politically.

 

[Bertie the bus]

Allowing these train services to cease running would not be an option politically.

It would be an option. Numerous towns and cities have lost direct services to London over the years.

 

[Bald Rick]

First doesn't seem concerned about this:

Their shareholders will be. Share price down 5% since opening yesterday.

== Doublepost prevention - post automatically merged: 8 Jan 2025 ==

Allowing these train services to cease running would not be an option politically.

It might be, though.

 

[Bletchleyite]

It would be an option. Numerous towns and cities have lost direct services to London over the years.

Though it'd not be unduly hard to add the Hull and Grand Central direct services to LNER plus an early London-Edinburgh. That'd cover most of it.

 

[Bald Rick]

Though it'd not be unduly hard to add the Hull and Grand Central direct services to LNER plus an early London-Edinburgh. That'd cover most of it.

It would be interestign to know how much revenue GC generate from Halifax, Brighouse and Mirfield, and how much of that would be lost to the railway if the services stopped. With LNERs Bradford services stepping up soon, the impact on their revenue from there may be keenly felt.

 

[weeklycommuter]

The Labour Party 2024 General Election manifesto has the following brief statement on page 33 on open access train services

https://labour.org.uk/wp-content/uploads/2024/06/Labour-Party-manifesto-2024.pdf

Open access operators are an important part of the rail system and will have an ongoing role.

The document GETTING BRITAIN MOVING Labours Plan to Fix Britain's Railways has more detail on page 22 which refers to updating the framework and guidance but in a way which ensures open access train operators will continue to apply for and run passenger train services on Britain's railways.

https://labour.org.uk/wp-content/uploads/2024/04/GETTING-BRITAIN-MOVING-Labours-Plan-to-Fix-Britains-Railways.pdf

7. The role of open access
Open access services introduced by independent operators (such as Hull Trains and Lumo) to use spare network capacity to supplement existing contract operators will remain where it adds value and capacity to the rail network. Open access operators can play an important role within a rail system. Open access has a proven track record in driving competition and better passenger outcomes in countries whose services are run predominantly by public operators. Such operators make the most of network capacity and can help lower emissions by contributing to mode shift. The ORR will continue to make approval decisions on open access applications on the basis of an updated framework and guidance issued by the Secretary of State.

This document also makes clear on page 10 that micromanagement of rail delivery bodies by the Department for Transport and Treasury officials and ministers is a problem that needs to be fixed.

Government micromanagement is stifling services
The current system of intensive micromanagement of rail delivery bodies by the Department for Transport and Treasury officials and ministers is hampering the efficient running of our railways. The stifling but ineffective micromanagement of operators and staff against narrowly specified contract criteria means that operators lack the freedoms required to innovate, improve the quality of services and increase demand. As a consequence, people with talent and experience within train operators are leaving the sector because they are underutilised.

 

[Dr Hoo]

The Labour Party 2024 General Election manifesto has the following brief statement on page 33 on open access train services


The document GETTING BRITAIN MOVING Labours Plan to Fix Britain's Railways has more detail on page 22 which refers to updating the framework and guidance but in a way which ensures open access train operators will continue to apply for and run passenger train services on Britain's railways.


This document also makes clear on page 10 that micromanagement of rail delivery bodies by the Department for Transport and Treasury officials and ministers is a problem that needs to be fixed.

Some great stuff there. Reminds me of Harold Wilson’s pledge to halt major rail closures in 1964.

 

[weeklycommuter]

Transport SoS Heidi Alexander has written a letter to the ORR raising concerns about Open Access:

The letter at the following web link is attached.

https://assets.publishing.service.gov.uk/media/677bc388d119b345376654a4/dft-letter-sos-orr.pdf

 

[Topological]

Reading that letter, some Open Access are more equal than others.

 

[weeklycommuter]

I consider it was politically unwise for the Transport Secretary to have written the letter dated 6 January 2025 to the Office of Rail and Road. The Labour Party made clear in their 2024 General Election manifesto documents that they will update the framework and guidance but in a way which ensures open access train operators will continue to apply for and run passenger train services on Britain's railways. The letter is in line with this as while it has an emphasis on the importance of abstraction, this and all the matters mentioned are already on the list of matters to be considered by the Office of Rail and Road when deciding on whether to approve open access applications. The letter also by itself cannot change the independence of the Office of Rail and Road or the list of considerations to be weighed when making decisions on open access applications. However with the current very difficult state of public finances it is very important that private open access passenger train operators continue to run train services, invest in rail infrastructure in some cases and gives orders to build new trains to British factories, all of which helps not only to enable more train services for rail passengers but also to create some badly needed economic growth. The Government cannot at present afford financially or politically for open access train operators to get cold feet and walk away. The problem politically with this letter is that if the ORR refuses any applications or open access train operators cancel applications and this results in the loss of orders for British factories to build new trains, the Government and the Transport Secretary could now be accused of causing the loss of orders and jobs even if in reality the letter did not cause this.

 

[Simon11]

Worth having a look at this paper produced by Systra for ORR in December 2024 which covers historic generation and abstraction for each Grand Central operation + Lumo + Hull Trains. All of them passed the current abstraction test, some much better than others though (see page 10).

Open access: research on historic generation and abstraction (2024) | Office of Rail and Road

www.orr.gov.uk

 

[Ghostbus]

From her letter:

“I wish to see the impacts on the taxpayer and on overall performance for passengers – such as potential congestion on the network – given primacy when considering open access applications.”

While hopefully it was never her intention, there's a way to read that as meaning she dislikes the fact 3.8m passengers out of 23.4m on the ECML (stat from the OP article) are getting cheap fares compared to what a state operator would charge. So she would rather the rules were tweaked to say these journeys aren't utilising spare capacity but are preventing the state operator from running more trains using these slots. Which they probably won't do if Sunderland is any guide.

Without knowing whether GBR intends to use branding in conjunction with low fares on spare paths it has available to use but aren't worth running as part of the main offering, I don't know how you can say whether passengers will be better off without OA potentially attracting custom the railway didn't have before (perhaps because the need to change trains or book far in advance negates any slim advantage the train has over the car).

If the vast majority of those 3.8m journeys are thought to be individuals getting a free ride off the backs of the 23.4m, not innovation driven extra demand (wouldn't that be an incredible boost for the underlying theory of railway privatisation if it was), then surely the far bigger waste of taxpayer funds that OA represents is the need to have a system of track charges, delay attribution, and a statutory body acting as an impartial arbiter of meritorious applications.

But if Labour aren't going to nationalise privately owned feight TOCs, Heathrow Express and Eurostar, and all charter operators too, then what are you saving really? It's her role to explain that, not the ORR. It's her job to know why the railway does things the way it does, and tell them how to do it differently if it conflicts with the government's priorities.

 

[JonathanH]

However with the current very difficult state of public finances it is very important that private open access passenger train operators continue to run train services

If the purpose of an open access operator is to generate profit from their railway operations, then isn't it a reasonable conclusion that the state running those services would generate income for the state railway / Treasury rather than for shareholders? GBR is an exercise in removing private companies from the railway, and preventing subsidy flowing from the government into private hands.

The Government cannot at present afford financially or politically for open access train operators to get cold feet and walk away.

Removal of competition allows fares to be set in a way which maximises return to the Treasury. It allows a single timetable to be set matching the infrastructure and demand.

 

[Bertie the bus]

If the purpose of an open access operator is to generate profit from their railway operations, then isn't it a reasonable conclusion that the state running those services would generate income for the state railway / Treasury rather than for shareholders?

Not really, no. OAOs cover their direct costs but not the full cost of their services so what might be profitable for an OAO might not be profitable if the full costs were borne. There is also the question of how many would travel by competing rail services if they stopped running and how many would switch to other modes of transport. If a sizeable proportion would just switch to another rail service then not running the OAO service would be beneficial for the Treasury.

 

[JonathanH]

Not really, no. OAOs cover their direct costs but not the full cost of their services so what might be profitable for an OAO might not be profitable if the full costs were borne.

But if they were run by the state, they would effectively be at a marginal cost to the services already being operated.

If a sizeable proportion would just switch to another rail service then not running the OAO service would be beneficial for the Treasury.

Yes.

 

[Bletchleyite]

But if they were run by the state, they would effectively be at a marginal cost to the services already being operated.

Unless suffering a severe bout of SNCF-itis I doubt you'd run Lumo or GC as a state operation, you'd just extend or portion work a few appropriate LNER services to provide the direct offerings felt worthwhile (such as Hull or the early Edinburgh). The 80x units might be taken on and refurbished to the LNER interior, perhaps, as these are useful. The 180s, well, I think they are well overdue the bin.

 

[Clarence Yard]

The letter has threatening undertones and it is clear that the DfT does not want any expansion of OA, prior to the establishment of GBR.

They have been slow (too slow, in my opinion) in publishing new guidance. Partly delayed because it might preempt the consultation on the forthcoming Bill but they should have realised that the ORR is duty bound to deal with applications under the present rules and not guiding the ORR away from that would cause them grief.

The DfT has become increasingly uncomfortable about any loss of revenue to the state operators, irrespective of the overall social and economic benefit to a particular region that is accrued from the operation of an OA service. Whilst it was once tolerated, it is clearly no longer the case, despite the warm words from the politicians.

If I was a total cynic, they will force the introduction of expensive path charges for OA, causing them to turn their operations (& rolling stock contracts) over to the state operator at no cost, to avoid contractual losses. Currently, the DfT can’t do it under the present rules (unless they effectively force an interim charges review on the ORR and then that gets messy) but if they remove the ORR from charge setting and access decisions (that falling to GBR) via the forthcoming Bill, then all bets are off.

 

[43096]

The letter has threatening undertones and it is clear that the DfT does not want any expansion of OA, prior to the establishment of GBR.

They have been slow (too slow, in my opinion) in publishing new guidance. Partly delayed because it might preempt the consultation on the forthcoming Bill but they should have realised that the ORR is duty bound to deal with applications under the present rules and not guiding the ORR away from that would cause them grief.

The DfT has become increasingly uncomfortable about any loss of revenue to the state operators, irrespective of the overall social and economic benefit to a particular region that is accrued from the operation of an OA service. Whilst it was once tolerated, it is clearly no longer the case, despite the warm words from the politicians.

If I was a total cynic, they will force the introduction of expensive path charges for OA, causing them to turn their operations (& rolling stock contracts) over to the state operator at no cost, to avoid contractual losses. Currently, the DfT can’t do it under the present rules (unless they effectively force an interim charges review on the ORR and then that gets messy) but if they remove the ORR from charge setting and access decisions (that falling to GBR) via the forthcoming Bill, then all bets are off.

If it is a cynical move from the DfT, then that is fair enough. It is pretty clear that the likes of the requested First operation expansion to Paignton is an equally cynical move as revenue abstraction from GBR. It's obvious what the response would be to such a blatant revenue steal attempt.

 

[HSTEd]

If I was a total cynic, they will force the introduction of expensive path charges for OA, causing them to turn their operations (& rolling stock contracts) over to the state operator at no cost, to avoid contractual losses. Currently, the DfT can’t do it under the present rules (unless they effectively force an interim charges review on the ORR and then that gets messy) but if they remove the ORR from charge setting and access decisions (that falling to GBR) via the forthcoming Bill, then all bets are off.

Can't they just issue instructions to the ORR and Network Rail that access charges are to be set at the level of full cost recovery?

The state won't care, as the subsidy to the railway just moves from one box on the spreadsheet to another, but it would mean the freight operators and OA operators would be at their mercy?
They would then be forced into subsidy agreements, or functionally forced to stop operating.

 

[JonathanH]

Is the thought that DfT could force up costs for open access passenger operations while still allowing freight to operate at around its current costs, or would the DfT also look to price private freight off the network as well?

 

[Bald Rick]

Can't they just issue instructions to the ORR and Network Rail that access charges are to be set at the level of full cost recovery?

No. At least not without primary legislation.

 

[showchaser]

HM Government open themselves up to major threat of legal action from OAOs over this policy direction, even if such cases were eventually to fail.

More pertinently—although I know nothing has been said explicitly—the political unpopularity of shuttering Lumo would be extraordinary.

It is the only reasonable option, in the eyes of many users, to get to Scotland on the railway.

 

[vuzzeho]

More pertinently—although I know nothing has been said explicitly—the political unpopularity of shuttering Lumo would be extraordinary.

And Eurostar.

 

[showchaser]

And Eurostar.

There would be a military conflict with France, or more accurately the French taxpayer.

DfT would be insane to touch Eurostar because all of the workforce agreements safeguard British jobs across the EIL maintenance and logistics operation.

 

[weeklycommuter]

There are several open access applications currently waiting for decisions by the Office of Rail and Road which clearly needs to move forward and quickly make the decisions as I cannot see how the paths can be available for all of the applications, especially currently undecided applications for paths on the West Coast Mainline. Some may also be too abstractive. The following decision notice rejecting the earlier application by Grand Union Trains to run trains between Carmarthen and London Paddington shows the list of considerations that the ORR applies when making a decision.

https://www.orr.gov.uk/sites/default/files/2021-02/2021-02-10-gand-union-london-carmarthen-s17-decision-letter.pdf

66. We considered carefully the beneficial aspects of this application, but decided to place additional emphasis on the absolute level of abstraction due to the current exceptional state of rail finances, and therefore gave additional weight to our duty to have regard to the funds available to the Secretary of State. We have therefore rejected this application.

The ORR also has a process in place to deal with the large number of applications including open access for paths in the December 2024, May 2025 and December 2025 timetable changes with information at the following web link.

Competing track access applications | Office of Rail and Road

Information on how competing and complex applications for the December 2024, May 2025 and December 2025 timetable changes will be considered.

www.orr.gov.uk

Competing track access applications
Information on how competing and complex applications for the December 2024, May 2025 and December 2025 timetable changes will be considered.
On 24 April 2024, ORR wrote to industry setting out a process for access applications for December 2024, May 2025 and December 2025.
This process was necessary to manage an expected higher-than-usual number of access applications from freight and passenger operators for additional or amended services for these timetable changes.
In addition, it was anticipated that some services in the applications would interact with each other, or have the potential to, at different points across the GB railway network.

 

[Harpo]

While it’s logical to read the letter as only being about Hull/GC/Lumo etc., the letter is not specific, it only references passengers.

If the intention is to level the financial playing field for the cherry-pickers fine, but freight and charters will get caught up in this too, especially if OAOs perceive any ‘levelling’ to be unfairly skewed.

 

[JonathanH]

If the intention is to level the financial playing field for the cherry-pickers fine, but freight and charters will get caught up in this too, especially if OAOs perceive any ‘levelling’ to be unfairly skewed.

That was my question above, could freight and charters be treated in a different way to open access passenger operations in a future framework?

 

[WAB]

I do think there's a difference between the existing open access service groups, which provide good links to marginalised areas (or offer a service level differentiation for the Anglo-Scot market), and some of the newer applications which seem more like a cash grab.

 

[Dr Hoo]

I do think there's a difference between the existing open access service groups, which provide good links to marginalised areas (or offer a service level differentiation for the Anglo-Scot market), and some of the newer applications which seem more like a cash grab.

Which new ones do you have in mind? Locations like Rochdale, Worksop, Cumbernauld, Gowerton (or more services to places like Pontefract) seem to be comparatively marginal compared to (say) Edinburgh.

The local operations proposed for Taunton, Frome, Melksham and so on hardly seem like a cash grab either.

 

[BlueLeanie]

So which operator does make a full contribution?

In my view, this has the opportunity to go terribly wrong. If the bar is raised too high for major companies to operate OA services, what happens to The Jacobite, The Scarborough extension, the Belmond and similar that bring £MMs into the tourist economy?