UK rail tsar says stop taking customers for granted (Williams Review)

[AndrewE]

https://www.theguardian.com/uk-news/2019/feb/06/rail-tsar-says-stop-taking-customers-for-granted starts by saying

Keith Williams criticises micromanaging by government as one of the failings driving passengers away

Britain’s rail industry will “drive passengers away” if it continues to operate as it does now, according to the man leading the government-commissioned review into the working of the railways.
Keith Williams, the former British Airways chief executive, also suggested that the government had compounded problems by “micromanaging the industry” through ever more specific rail franchises.
Speaking midway through a public consultation in his year-long review on the railways, Williams said he believed the industry needed “to reorientate towards the customer”, adding that it had taken the growth in passengers for granted.

I wonder if he is going to say that putting party dogma (e.g. minimising the number of operating staff, extension of DOO) into franchise requirements through the DfT is a silly idea?

 

[Railwaysceptic]

The most encouraging passage in that is this paragraph:

Unions and Labour have argued that full-scale renationalisation of the rail industry is needed. Williams said: “In certain quarters there is a rush to get to how the industry should be structured. Lets start by focusing on what we want to get to and why we want to want to get there. The appropriate structure – the how we get there – will fall into place.”

Mr. Williams clearly has his feet on the ground. Dogma is going to take second place to reality.

 

[DarloRich]

The most encouraging passage in that is this paragraph:

Unions and Labour have argued that full-scale renationalisation of the rail industry is needed. Williams said: “In certain quarters there is a rush to get to how the industry should be structured. Lets start by focusing on what we want to get to and why we want to want to get there. The appropriate structure – the how we get there – will fall into place.”

Mr. Williams clearly has his feet on the ground. Dogma is going to take second place to reality.

The structure IS the problem. Assuming it will "fall into place" is silly. We have to work out both service and structure.

 

[Glenn1969]

But nationalisation isn't the answer just like it wasn't in the 70s/80s when there was zero investment in infrastructure. We are still suffering from that mistake. Nationalisation just means the railways competing with health, education, defence etc for finite pots of public money. I'm just not sure I know what the answer is

 

[mallard]

The rail industry already is driving passengers away. Last year saw the largest drop in passenger numbers in nearly 30 years, driven by a nearly 10% drop in season ticket sales. As a former season-ticket commuter myself, who was priced out of the railway and turned to road commuting in that period, it's hardly surprising. The cost of travelling by road has remained basically static (in real terms) for quite some time, while rail fares keep increasing at inflation-busting rates.

The railways need increased government funding and, as unpopular as it may be around here, rail staff need to accept that above-inflation pay rises should not be the norm. Staff pay takes a far greater share of the pie than TOC profits (several of our current TOCs aren't profitable, but their staff still get those inflation-busting pay rises year after year).

The increasingly desperate attempts by TOCs to extract every last penny of potential revenue, by fair means or foul, from every passenger is only going to make things worse in the long-term.

 

[Bantamzen]

The rail industry already is driving passengers away. Last year saw the largest drop in passenger numbers in nearly 30 years, driven by a nearly 10% drop in season ticket sales. As a former season-ticket commuter myself, who was priced out of the railway and turned to road commuting in that period, it's hardly surprising. The cost of travelling by road has remained basically static (in real terms) for quite some time, while rail fares keep increasing at inflation-busting rates.

The railways need increased government funding and, as unpopular as it may be around here, rail staff need to accept that above-inflation pay rises should not be the norm. Staff pay takes a far greater share of the pie than TOC profits (several of our current TOCs aren't profitable, but their staff still get those inflation-busting pay rises year after year).

The increasingly desperate attempts by TOCs to extract every last penny of potential revenue, by fair means or foul, from every passenger is only going to make things worse in the long-term.

By their very nature, private companies are going to look at every means possible to maximise revenue within the scope of their franchise agreements. In the first instance it is the job of DfT to set the franchise agreements and police them. They don't do a good job.

For me a better way to run the system would be to simply contract routes out to private operators, and the DfT collect the revenue gained to help finance it. In the first instance this would make a single body, the government, responsible for pricing structures. TOCs could gain additional revenue by offering extra pops, bells and whistles as with the airline industry for those willing to pay for additional extras, but the government themselves would be responsible for setting the basic prices for travel. If a TOC fails to run the service effectively, or does not correctly collect revenue then as part of the contract their could be direct financial penalties, or even the threat of a contract termination. Conversely better performance could then attract extra premiums, which for a private company would help focus minds on growing their passenger numbers through better service & experience.

Its only a starter for ten idea, I haven't thought too much more about the finer details but personally I believe this would a step in the right direction without pushing the government towards something they are ideologically against, i.e. nationalisation.

 

[d9009alycidon]

I think that those who have been driven back to road commuting will soon consider returning to the train, there are already subtle changes occurring which will increase costs for those who commute by car, for example in the finance bill for Scotland there is the workplace parking tax, potentially a £400 per annum charge for the privilege of being able to park your car at work, diesel fuel is quietly edging further and further up in price and the spectre of road pricing has not gone away, as more and more cars are fitted with GPS as standard (you don't think GPS mapping is for your benefit do you) then it becomes easier and cheaper to introduce. Driving will get more expensive!

 

[AndrewE]

The railways need increased government funding and, as unpopular as it may be around here, rail staff need to accept that above-inflation pay rises should not be the norm. Staff pay takes a far greater share of the pie than TOC profits (several of our current TOCs aren't profitable, but their staff still get those inflation-busting pay rises year after year).

Which is down to the structure of the industry. TOCs competing to hire qualified staff (i.e. steal them off each other) when a single industry would have a unified salary structure which included tweaks like London Allowances, or whatever was considered justified. Also a staffing policy worked out on a regional scale and which looked further into the future than the end of the current franchise.
p.s. the fact that staff pay might be more than a TOC's profit is neither here nor there. It's just a fact of life in a service industry. If you think labour should be virtually free then I suggest that you go and work in the Philippines, or illegally in the USA, and see how you like it.

 

[LNW-GW Joint]

Keith Williams cannot change the industry structure, and describing him as the railway "tsar" is not correct.
His job is to make structural recommendations to Chris Grayling for the government to act on (or otherwise).
He will certainly not be taking a nationalisation decision - that's for the government of the day.
Any major change needs a Railways Act which will take months, maybe years to enact, in competition with all the other government business.

 

[mallard]

p.s. the fact that staff pay might be more than a TOC's profit is neither here nor there. It's just a fact of life in a service industry. If you think labour should be virtually free then I suggest that you go and work in the Philippines, or illegally in the USA, and see how you like it.

Sure, that's exactly what I meant (sarcasm, for the humor-impaired), I wondered how long the personal attacks would take to arrive... The point is, possibly not perfectly worded, that the annual increase in staff pay, both in relative and real terms is greater than the TOC's profit (especially for the currently unprofitable TOCs), so the constant claims we hear that TOC profits are the root of all evil and that we can fix everything by re-nationalising and eliminating that small percentage don't ring true to me.

By their very nature, private companies are going to look at every means possible to maximise revenue within the scope of their franchise agreements.

I doubt that refusing to accept valid tickets, refusing to sell certain valid tickets, giving faulty (always to the TOCs revenue advantage), enacting confusing and poorly thought out penalty schemes, denying correct Delay Repay claims for made-up nonsensical reasons, etc, etc, etc. are "within the scope of their franchise agreements".

In the first instance it is the job of DfT to set the franchise agreements and police them. They don't do a good job.

Agreed. Both the DfT and the ORR fail miserably in their obligations to protect customers from blatant financial exploitation. Quite frankly, the level of potentially fraudulent activity by TOCs should be the subject of a major criminal investigation.

 

[HowardGWR]

Excellent analysis so far, from Mr Keith Williams. Given all the brickbats thrown at Mr Grayling, at least he has done what I believe is the only meddling an SoS should do and that is appoint a self-evidently competent official, in this case. Good to see he is orientated to 'getting there' leaving the how until later.

 

[AndrewE]

Sure, that's exactly what I meant (sarcasm, for the humor-impaired), I wondered how long the personal attacks would take to arrive... The point is, possibly not perfectly worded, that the annual increase in staff pay, both in relative and real terms is greater than the TOC's profit (especially for the currently unprofitable TOCs), so the constant claims we hear that TOC profits are the root of all evil and that we can fix everything by re-nationalising and eliminating that small percentage don't ring true to me.

I quite like jokes, but staff pay (and the increases that employers have had to pay to some key staff now that they have the whip hand in the privatised world) isn't something to joke about, and I'm afraid I can't see any sarcasm or humour in your post. It really does read just like a knee-jerk bit of Tory mud-throwing when in fact wages are completely irrelevant. Why miss a chance to blame someone else, especially if it might lower their public support?

 

[mallard]

The fact is that rail staff have received incredibly generous pay deals, while most of the rest of the working population have seen nothing close. Public sector workers have had an official freeze and the majority of the private sector have seen their wages fall behind inflation for most of the last decade (I'm pretty sure decrying those things is a somewhat left-wing sentiment, even though the one-dimensional left-right dichotomy is a terrible way to characterise one's politics.). The money to pay rail staff has to come from somewhere; that's at least partially the "fare box". Thus, increasing staff costs do indeed push up fares (note that many unregulated fares have increased far more than the official percentage that applies to regulated fares) and thus that is indeed relevant when discussing how the rail industry is pricing away its customers.

 

[CaptainHaddock]

The rail industry already is driving passengers away. Last year saw the largest drop in passenger numbers in nearly 30 years, driven by a nearly 10% drop in season ticket sales. As a former season-ticket commuter myself, who was priced out of the railway and turned to road commuting in that period, it's hardly surprising. The cost of travelling by road has remained basically static (in real terms) for quite some time, while rail fares keep increasing at inflation-busting rates.

Perhaps the rail industry is deliberately passengers away? We constantly hear about overcrowded trains, a network full to capacity and all that. New lines and new trains are prohibitingly expensive and there's little incentive for a TOC with a short term franchise to invest when the benefits may not be seen for years, by which time they may have lost their franchise. In such circumstances, you can understand why some think lowering demand may be preferable to increasing capacity.

 

[Carlisle]

The most encouraging passage in that is this paragraph:

Unions and Labour have argued that full-scale renationalisation of the rail industry is needed. Williams said: “In certain quarters there is a rush to get to how the industry should be structured. Lets start by focusing on what we want to get to and why we want to want to get there. The appropriate structure – the how we get there – will fall into place.”

Mr. Williams clearly has his feet on the ground. Dogma is going to take second place to reality.

Perhaps someone should inform him that’s almost identical to what was said repeatedly by advocates of privatisation shortly before it happened , ie a new era of great customer service, staff loyalty and commitment was about to sweep away the tired old BR outfit.

 

[mallard]

Perhaps the rail industry is deliberately passengers away?

Well, Mr. Williams certainly doesn't sound like he thinks it's a good thing. You'd think if the government had a policy of modal shift away from the railways, they wouldn't be keeping so quiet about their success!

 

[AndrewE]

The fact is that rail staff have received incredibly generous pay deals,

No, some staff in some TOCs have

while most of the rest of the working population have seen nothing close. Public sector workers have had an official freeze and the majority of the private sector have seen their wages fall behind inflation for most of the last decade

I know this very well. I was in the public sector on the current pay freeze, and (in common with lots of people in the same position) got poorer every year until I drew my pension. I am grateful that I actually earnt enough to keep us well above the breadline, but I am very aware how badly a lot of people doing essential jobs are being paid, and how desperately difficult a lot their lives currently are.

 

[HowardGWR]

I have wondered whether this thread and the nationalisation one should merge, but, as Mr Williams said, it's a bit early for that. Strange that people have leapt in immediately on that issue here. Mr Williams wants to talk about customers and as one who has eschewed rail for our early summer holiday, because we can't rely on rail to get us to the airport in time and just can't get us back home, if the plane lands after early evening. I hope that the airports will have a hefty input to his study, because this is a market that needs satisfying and isn't being at present and where there are big environmental savings to be made.

 

[underbank]

I hope that the airports will have a hefty input to his study, because this is a market that needs satisfying and isn't being at present and where there are big environmental savings to be made.

Have to agree with that. Take the Manchester situation where more and more trains start/terminate at the airport. All well and good, but the trains just don't cater for the busy early morning flight period and don't cater for the late night arrivals either. If they're serious about encouraging people to use the train for the airport, it needs to be closer to a 24 hour service to get people there for 5am to check in for the 7am flights and to take people home from the late night arrivals around midnight.

 

[ChiefPlanner]

Keith Williams cannot change the industry structure, and describing him as the railway "tsar" is not correct.
His job is to make structural recommendations to Chris Grayling for the government to act on (or otherwise).
He will certainly not be taking a nationalisation decision - that's for the government of the day.
Any major change needs a Railways Act which will take months, maybe years to enact, in competition with all the other government business.

I really , really wish this useless term "Tsar" could get binned. Started with the "Drugs Tsar" way back.

Students of history might care to consider what awful fate befell the last Russian one , and worse, his family.

Surely the "meejia" could come up with a better term, - how about "Potential Chairman" , "Supremo" -or similar . Answers on a postcard please.

 

[AndrewE]

Surely the "meejia" could come up with a better term, - how about "Potential Chairman" , "Supremo" -or similar . Answers on a postcard please.

"Supremo" has echoes of a megalomaniac Latin American dictator in an old Hornblower book: a military man who promoted himself and insisted on being addressed as "el Supremo" I think.

 

[vlad]

I really , really wish this useless term "Tsar" could get binned. Started with the "Drugs Tsar" way back.

Students of history might care to consider what awful fate befell the last Russian one , and worse, his family.

That would be Peter I, who died of natural causes and is now generally referred to as "The Great". I appreciate that he was incredibly despotic and therefore his death led to a crisis of succession amongst those of his family he hadn't done away with but still....

You wouldn't be talking about the Romanov Emperors instead, would you?

 

[Starmill]

Supremo was often used to describe Chris Gibb. I don't see that it makes any more sense than dubbing Williams Tsar!

 

[Aictos]

That would be Peter I, who died of natural causes and is now generally referred to as "The Great". I appreciate that he was incredibly despotic and therefore his death led to a crisis of succession amongst those of his family he hadn't done away with but still....

You wouldn't be talking about the Romanov Emperors instead, would you?

However to be pedantic, the term Tsar/Czar was often also used to describe Nicolas II who was the last Emperor of Russia so by that the last Tsar/Czar was Nicolas II who I believe @ChiefPlanner is actually referring to as he with his family were murdered by the local Communists.

 

[NSEFAN]

Perhaps the rail industry is deliberately passengers away? We constantly hear about overcrowded trains, a network full to capacity and all that. New lines and new trains are prohibitingly expensive and there's little incentive for a TOC with a short term franchise to invest when the benefits may not be seen for years, by which time they may have lost their franchise. In such circumstances, you can understand why some think lowering demand may be preferable to increasing capacity.

Wasn't this tactic also used by BR, under instruction from the Treasury?

 

[Bantamzen]

I have wondered whether this thread and the nationalisation one should merge, but, as Mr Williams said, it's a bit early for that. Strange that people have leapt in immediately on that issue here. Mr Williams wants to talk about customers and as one who has eschewed rail for our early summer holiday, because we can't rely on rail to get us to the airport in time and just can't get us back home, if the plane lands after early evening. I hope that the airports will have a hefty input to his study, because this is a market that needs satisfying and isn't being at present and where there are big environmental savings to be made.

Have to agree with that. Take the Manchester situation where more and more trains start/terminate at the airport. All well and good, but the trains just don't cater for the busy early morning flight period and don't cater for the late night arrivals either. If they're serious about encouraging people to use the train for the airport, it needs to be closer to a 24 hour service to get people there for 5am to check in for the 7am flights and to take people home from the late night arrivals around midnight.

Indeed, there are a number of airports that would benefit from better connectivity, Manchester being one. If I recall correctly, flights are cleared for take-off from 06:00 - 23:00 but incoming flights, especially in the summer come in all hours. I've certainly flown from there very early & late, and landed at silly o'clock in the morning when there is precious little in the way of transport options save the odd TPE & taxis. Given that Manchester serves pretty much the whole of the North of England & Wales, it only makes sense to find ways of connecting the major centres of these areas with a reasonable 24 hour service (the same can be said for other major airports elsewhere BTW).

Of course with Manchester there is the long running argument about letting long distance trains pass through Manchester to the airport instead of tipping them all out at Piccadilly to join the ever-growing throng, but with a lot of investment going into Manchester Airport & projections of a lot more passengers using it in the coming years, there needs to be a solution that attracts new passengers & doesn't involve lots of changes the way London airports suffer from (I am in favour of these also having better direct connectivity from a wider catchment area).

 

[Tetchytyke]

But nationalisation isn't the answer just like it wasn't in the 70s/80s when there was zero investment in infrastructure. We are still suffering from that mistake. Nationalisation just means the railways competing with health, education, defence etc for finite pots of public money.

It does now, though. Network Rail is nationalised. Capital investment in new or upgraded infrastructure comes from government. New trains such as IEP are underwritten by the goverment.

The idea that private companies are investing is demonstrably false. The current franchising model is nothing more than paying Branson, Souter and the rest vast sums of money to do something the government could do for free.

 

[E50019]

nationalisation in todays railway - alliancing...

contractors and Network Rail 'working together' on certain projects or workbanks, all working in the same office...

 

[underbank]

I really , really wish this useless term "Tsar" could get binned. Started with the "Drugs Tsar" way back.

Have to agree with that. And also the ridiculous "community" tag that's applied to schools, fire service, policing, etc. Not to mention that truly hideous word "commissioner".

 

[underbank]

The idea that private companies are investing is demonstrably false. The current franchising model is nothing more than paying Branson, Souter and the rest vast sums of money to do something the government could do for free.

Yes, because despite what they say, it's not privatised - it's state controlled pretend privatisation. It's just like the stupid PFI deals for shiny new hospitals and schools. It's ALL just a ploy to get the debt/borrowing off the governments official figures.