Keith Williams and Richard Brown gave evidence.

Q I remind Members that we must stick to the timings in the programme motion, which the Committee has agreed to. We have until 10.35 am for this session. Please could the witnesses briefly introduce themselves?

Richard Brown:

My name is Richard Brown. I have 43 years’ experience in the industry, nearly half of which—19 years—was with British Rail before privatisation. I was a director of the InterCity business unit before privatisation. I set up and ran one of the train companies’ privatisation and National Express’s trains Division, which had five franchises. I moved on to Eurostar as chief executive and then chairman. I have also been the Government’s special director on the board of Network Rail, and a member of the board of the Department for Transport itself. In 2012, I carried out a review of franchising for the Department.

Keith Williams:

My name is Keith Williams. In September 2018, I was appointed independent chair of the Williams rail review. I was appointed largely because of the failure of the system in May 2018. As independent chair, I led the rail review from 2018 to 2023, effectively. It was then the Williams-Shapps review, which came out in 2023.

Q I thank both the witnesses for coming. There is a lot to get through and we are short of time. I will start with Mr Williams. You have written a report on the future of railway. You proposed the creation of GBR, but to operate through private concessions as opposed to nationalisation. The Government have now taken a very different view. Please can you set out briefly the pros and cons of nationalisation over what you proposed.

Keith Williams:

When we did the review, the real focus was on passengers, to be honest. I was asked a number of times: “Is it nationalisation or is it privatisation?” I left that to one side because from my perspective, it was the better running of the railway, which is the structure that is now in place. To some degree, during the course of the review, franchising had been seen to be failing, and that was one of the premises of the review at the beginning.

Of course, what happened in the intervening period was that covid came along, and that changed everything, so everything was de facto put back into public ownership. To a large degree, we were agnostic on that. However, if you look at the railway even today, parts of it are run in the private sector and parts of it are run in the public sector. As I see it, public ownership was accelerated through covid and through the end of the franchising, which in my period was due to end in 2029, so it was a long way off. Obviously, that was brought forward because of covid.

Q I turn now to the Bill, rather than the broader situation. There are huge powers in the Bill for the Secretary of State or the Department for Transport, in relation to setting out the long-term strategy, intervening in fares and their structure, and giving guidance and direction. Those are the key areas, but there are a number of others. Are you a bit concerned that there is going to be some backseat driving going on?

Keith Williams:

From the Government?

Yes, from Government rather than GBR being the director.

Keith Williams:

No, the way I see it is that, actually, there is a good segregation of functions within the system now that were not there previously. Again, if you look back to 2018, the failure of the system was in part brought because every decision went back to Government. The Secretary of State finished up having total responsibility for the timetable fiasco that happened in 2018. That is when we came to the review. One of the clear things we wanted to do was to get a segregation of functions, which I think the Bill successfully does. It holds good to the review in that respect.

Government are responsible for strategy—and hopefully longer-term strategy than we have seen in the past—then they hand the operation down to the people who can run it in the interests of passengers and customers, with strong regulation, safety and a public ability to react when things go wrong. I think that system is very good. I come from a business background and in some ways it echoes what I see in business: a board sets the strategy and then passes the management down to the CEO and the people who run the business. I am not concerned about backseat driving to that degree.

Q Mr Brown, there are very few references in the Bill to value for money driving competition. In fact, the competition remit of the ORR is specifically excluded for large sections of the operation of GBR, and the Secretary of State has no ability to grant provision of service contracts to private companies—it has to be to a GBR or a subsidiary of GBR. How can operations of GBR be challenged on value for money for taxpayers? Do you think they have the balance right here?

Richard Brown:

Do I think what, sorry?

Do you think they have the balance right here? How do we drive value for money for taxpayers given those very significant constraints on competition?

Richard Brown:

Yes, I do. I think the balance is right. Putting everything together into GBR makes it the single directing mind. It will be up to GBR and its integrated business leaders to strike the balance and deliver better value for money. There is a lot of duplication and friction in the current system, which I think is one of the things that Keith Williams was highlighting in his review.

The accountabilities are very strong with this Bill. GBR is accountable to the Secretary of State, but is also regulated and overseen by the ORR and the passengers’ council, and has a responsibility to mayoral authorities. First and foremost—I think this featured in the previous discussion—the integrated business units and their CEOs, or whatever they are called, will be accountable to their local towns, communities and passengers. There are strong pressures and forces created with this Bill to actually deliver value for money for taxpayers, as well as for passengers.

Keith Williams:

Can I add one thing, there? Even in my time on the review, one of the things that started was bringing track and train together again. That allowed cost simplification, but it also enabled GBR to get a full picture of the revenue and costs of running the railway, which previously did not exist. It was surprising to me, on the review, that getting the costs together was an enormous exercise and a bit of guesswork, because the costs were in so many different areas.

Q  I am conscious of time, so I just have one broader question about the devolution settlement, which is devolving services and how the railway works, which is mentioned in the Williams review, and I also want to go to Mr Brown’s point about integrated business units. Mr Williams, could you expand a little bit on what the operational reality of a more decentralised railway working in closer partnerships could look like under GBR? The Bill specifically focuses on mayoral strategic authorities as an appropriate unit to engage with to act as a catalyst for economic growth, house building and those things which are really conjoined with rail growth. Can you give us a glimpse of how you feel that the system might work in practice under the Bill’s framework?

Keith Williams:

It is a great question, because that, to me, was fundamental to the better running of an integrated transport system. I was listening to the earlier questions, and the advantages of bringing in the mayors and local authorities are twofold. First, there is deciding what the appropriate mechanism for running transport is in their area. I visited Manchester, where you have light rail, heavy rail and buses, so you need to make a decision as to which you are going to promote. In my opinion, that was better done at a mayoral level than a central level. That is one aspect.

The second aspect is integration. We looked at systems overseas and—guess what?—you find that the bus comes to the station, the train starts and then stops. That did not exist in the UK, and bringing the mayors and local authorities into that decision making was hugely important for running an integrated system.

Both of your reviews highlighted an issue of short-term thinking, or a lack of longer-term vision, on the railway. Are you satisfied with the way that the long-term rail strategy is set out in the Bill, and that it will restore a bit more long-term thinking and vision? Do you think it is a problem that “long term” is not defined in the Bill—are we talking about five, 10, 20 or 30 yearsQ ?

Richard Brown:

I think the Bill talks about a 30-year strategy and the Secretary of State having responsibility for producing that. There will be a degree of evolution, because when you are running an organisation, you need to be the person who is, if you like, giving birth to the strategy, in very close collaboration with your shareholder—if this was a business. The Secretary of State’s strategy will set the long-term objectives about what the Government wish to see the industry do, and then it will be up to GBR to produce the business plans, whether you call them business plans or more detailed strategies, about how it is going to deliver that. I am quite sure that, putting everything together, there are plenty of people in the industry who desperately want to produce a longer-term strategy for rolling stock procurement, electrification and reducing carbon impact, and they are frustrated that it is very difficult to do it now because of the range of parties involved.

Keith Williams:

I come from the airline world, and the problem there is that you buy an aeroplane and it lasts for the next 30 years. Rail is very similar: you operate the rolling stock, and that is a long-term decision. I was surprised that decisions were set over five-year periods, because the decisions that you make today partially define the future for a much longer period than five years. Again, a problem of running an airline is that you order the aeroplanes and unfortunately the market declines because of economic factors, commercial factors or whatever. You are therefore taking long-term decisions—that is not wrong—but within those you sometimes have to change direction because of the situation that exists at the time. The classic example of that in rail is franchising: franchising worked while the railway was growing, but once it went ex-growth, franchising came under pressure, and then obviously more pressure when covid arrived.

Q I spend about four hours a week on a train with a toddler, so I know well that inclusion on our railways is not just for those with disabilities, although that is incredibly important. I am interested in whether you think that the provisions in the Bill around accessibility are strong enough and will go far enough to ensure that we have a railway that truly works for everybody, as it needs to if we are to persuade more people out of their cars and on to the railways, and as is right given the endeavour around net zero and the Government’s wider ambitions.

Richard Brown:

Yes, I do. There are clear duties placed on the passengers’ council, for instance, to produce standards for accessibility. Those can then be enforced by the ORR or by persuasion with GBR. The improvement of accessibility is mentioned at several points in the Bill as a duty or responsibility or something that is important, and as something to be taken fully into account in planning and developing investment schemes. I think the Bill actually provides greater impetus on that score, but this is a long-term thing. There are railways with platforms and track such that you have to cross over the track to get from one platform to the other, and there has been a long-term programme of investment to try to improve accessibility with things like lifts. This needs to carry on, and ideally at a faster pace.

Keith Williams:

One of the disappointing things for me, when I did the review, was that we did not really know what accessibility was. We actually had to do an audit to look at where we had accessibility to begin with, and I would encourage you to keep the pressure on that one. It is one thing to have an audit of what does and does not exist, but the next thing is to prioritise what really needs doing going forward. I think that is part of the longer-term strategy for the railway, which is in governmental hands.

I have a couple of quick questions, following on from some of the comments that you have just made. Do you think that a 30-year strategy, or whatever, is a realistic proposition, given that the Government can change every five years—it may be more than that, but there is the potential for that—and a new Secretary of State may want to draft their own strategy, which may be completely different from the previous Government’s? That is a factor of politics. By adopting the approach taken here, do you think we bring that political risk even more starkly into this space than it is currently?Q

Richard Brown:

Unless you have a long-term strategy, you will always be condemned to short-term decision making. If you are running a business, you might have a 10, 15, 20 or even 30-year strategy, and you will need to change and adapt that according to circumstances at the time.

What I think is very important—Mr Williams has highlighted it—is that the railway assets are long-life. The trains have 30, 35 or 40-year lives, and the signalling and track last even longer. If you do not have that long-term strategy for investment and the sorts of things that you are planning to buy, taking account of new technologies, you are condemned to short-term decision making, which, to an unfortunate extent, is too often where we have been.

Q Thank you. Mr Brown, I think it was you who mentioned the integrated business units and accountability, and you also mentioned communities and passengers. How will the Bill provide direct accountability to individual communities? How will it ensure that those integrated business units are directly and meaningfully accountable to individual passengers or an area, and that the director or MD of a particular integrated business unit is directly accountable to them rather than upwards to the chief executive of GBR?

Richard Brown:

In terms of governance, they have to be accountable to the chief executive of GBR, who has to be accountable to the Secretary of State. You could say that one of the complexities of the Bill is that there are a number of accountabilities. If you are running a regional or local railway, such as Southeastern trains in Kent, particularly given GBR’s responsibility to consult with and take account of local transport plans, you cannot avoid developing a relationship with the towns, communities and mayoral authorities on your route, as well as the passenger groups. If you do not, GBR will move you on to another job, or even get rid of you.

I have run business units like that within British Rail and in privatisation, and I think the local focus is a really important feature. That is why I am really encouraged by what is happening: as each franchise comes to its end, where it can be merged with the local route management of Network Rail, it is being done very quickly. That can happen across the piece when GBR is fully up and running.

Q I want to build on the points about mayors and the mayoral authorities, in the context of the devolved nations. There is a really complex picture there, particularly with cross-border travel and the different ownership of companies that may operate across the border. Do you think the Bill covers that adequately and can cope with the challenges?

Keith Williams:

It is a great question. The issue, of course, is cross-border; for example, trains go from London into Wales, and similarly into Scotland. Giving total devolution was something that we looked at. There is so much cross-border traffic that you need to take that into account, so we left the devolved positions largely as they were.

Richard Brown:

The Bill is pretty clear in setting out the roles and responsibilities of the Secretary of State and the devolved Administrations. In practice, these things will always need to be based on collaboration between the different organisations, which is the way you run a railway. There are inherent tensions between, for example, what the Welsh Government might want in terms of cross-border services and what might actually be affordable and in the interests of passengers, competition for capacity use, and so on. All of that will be within GBR to, not adjudicate, but work its way through, produce solutions and, where there are options, put those to the Secretary of State and the Welsh Government, for instance.

Out of that will possibly come a compromise, because not everybody will get what they want from the railway. There are too many competing people wanting different things from the railway. The great news is that all of that responsibility to co-ordinate and produce a plan for the most effective use of capacity for the different users is put on one body rather than being split between the Department for Transport, ORR and Network Rail, as it is now.

OnQ accountability, both this panel and the previous one have talked about the benefits of having a single business unit or chief executive responsible for both track and train. I accept the logic of that and the point that there are mechanisms for local communities and passenger groups to interact with that business unit and for it to have to take local plans into consideration. The step that I am missing is that I can convince the chief executive responsible for my area that we need a new passing loop at Tisbury—he is 100% convinced of that—but ultimately he is still delivering based on the broader business plan. For all of the mechanisms of interaction with my local business unit, how does that translate into delivering within a business plan, if the business plan continues to deprioritise the south-west, for example?

Keith Williams:

I encourage you to work with your MD to put forward the best plan, which will then go into GBR’s overall plan and there will be a set of priorities. There are always going to be priorities. In a sense, in the past one of the failures was that that then went to the Secretary of State, who was making most of the decisions, because everyone else was avoiding making a decision, or absolving themselves of doing so, and sometimes the best decisions were not being made. I think there is a much greater likelihood that the priority list will be set by somebody who knows how to run track and train.

Q The Secretary of State will still have to sign off that loop, though.

Keith Williams:

They will still have to sign it off, but hopefully they will leave it to the people who know what needs doing to do it.

With 60 seconds for question and answer, I call Baggy Shanker.

Q Mr Williams, how does the Bill reflect the vision of your review that we have a more integrated and passenger-focused railway?

Keith Williams:

I think it absolutely does. That was at the heart of the review. Customers’ main complaints were about punctuality and cancellation. Bringing track and train together ought to solve that issue.

Q Mr Brown, how does the Bill reflect the failings that you highlighted in your review about a broken franchising system?

Richard Brown:

I did not actually say that franchising was broken; I said that it needed to be substantially improved. Frankly, having reread my review before this session, I think the complexity of the review proved too difficult for the Department to manage effectively, and I think it is past its time, so I do not think it is not relevant to the current discussion.

Order. We have reached the end of our allocated time. I thank the witnesses for their time today.