Written Statement: Williams Rail Review

On 20 September 2018, the Secretary of State for Transport announced a root and branch review of Britain’s railways to be led by Keith Williams, former Chief Executive of British Airways and now Deputy Chair of John Lewis and Partners.  Keith Williams will be supported by an external panel and the UK Government intends to publish a White Paper on the review’s recommendations before the end of 2019.  I am pleased that the external panel includes Margaret Llewellyn, Chair of Network Rail’s Wales Route Supervisory Board.

I welcome this review.  Although we have managed to take a significant step with the award of the new Wales and Borders rail contract, the context for rail delivery in Wales is complex, fragmented and under funded.  I have today spoken with Keith Williams to set out the Welsh Government’s position.

The current railway settlement was designed before the advent of devolution.  Although some efforts have been made to evolve it, the current settlement is still a reflection of the times in which it was created.  20 years on from devolution, the Secretary of State for Transport in Westminster retains ultimate control of the railway in Wales.  This imperfect devolution settlement is the root of many of the problems with our railway.

We have statutory functions only for the Wales and Borders rail services contract, with services from three UK Government franchises operating in Wales beyond our control.  Whilst the Secretary of State for Transport rightly has a say in the operation of Wales and Borders services operated in England, the UK Government has refused to implement a reciprocal arrangement – meaning that we have no say on the specification or operation of the other three franchises which operate in Wales.  By way of example, Cardiff has the poorest rail connectivity with its peers of any of the UK’s 12 core cities.

Although we, like the UK and Scottish Governments, are a “franchising authority” and will next year become a track owner/operator, the Welsh Government has no role in setting the remit for, nor appointing any of the Directors of the rail regulator – the Office of Road and Rail.  Wales does though have this role for other UK regulators.

Also, crucially, and unlike Scotland, we do not have fair funding or control in respect of Wales’ rail infrastructure.  All of this prevents us from developing the rail services Wales needs as part of a wider transport system, fully integrated to cater effectively for the end-to-end journeys people want and need to make.

As well as these devolution issues, the majority of Britain’s rolling stock remains in the hands of three privately owned rolling stock operating companies which give priority to their own commercial interests and are unresponsive to local or service-related needs.

We recognise though that people and goods need to travel between Wales and the rest of the UK. Seamless travel between Wales and the rest of the UK is crucial, so we cannot do without some form of UK national rail system operator.

I am calling for the Williams Review to set out a clear path for Wales to have a greater say in specifying rail services, managing and developing infrastructure with a fair funding settlement, and establishing regulatory and system operator functions which recognise the diversity of UK devolution whilst maintaining a national railway which benefits all parts of Britain.  

I am also calling for the enduring lack of investment in our rail infrastructure to be addressed.  Despite Network Rail’s Wales Route having 11% of the route length, 11% of the stations and 20% of the level crossings across England and Wales, only an average of around 2% of money spent on network enhancements across England and Wales since 2011 has been spent here.  We should have received well over £1 billion in the last five year period alone. This explains why many line speeds in Wales are below the average for Britain as a whole, why we have insufficient network and station capacity in some key areas, why there are capacity limitations impacting on our abilities to accommodate new stations and services - particularly on main lines, why there are unacceptable limitations on the freight we can move by rail and why a significantly lower proportion of journeys to work are made by rail in Wales compared with elsewhere in Britain. 

The UK Government’s approach to allocating funding which gives priority to areas of the country with higher levels of rail use, often because of higher levels of historic investment, cannot continue to be applied.  Despite promises made at the time of the cancellation of electrification to Swansea, the UK Government has not committed to fund the delivery of any enhancement schemes in Wales.  We have unmet rail connectivity needs across our regions and the lack of a fair share of enhancement funding impacts on our ability to meet our aims for economic development and enhancing the wellbeing of future generations.

Clearly, significant change is needed and I am calling for these to be delivered through this review.  Specifically, we need:

• Transfer of ownership of Wales’ rail infrastructure (as recommended by Commission on Devolution in Wales) following a comprehensive assessment of its condition
• A fair funding settlement extending to enhancements based on broadly the same methodology as that used for Scotland
• The ability to select from a range of railway passenger service delivery models in Wales, including more integrated management of track and train
• The removal of the prohibition on public sector operators bidding for, and operating railway passenger services, in relation to Welsh franchise agreements
• A requirement for Welsh Ministers to agree specification and designation for railway passenger services operating in Wales under the control of others
• The power for the Welsh Ministers to operate, specify and designate any Welsh (cross-border) services into England following approval to do so through industry processes (without the approval of the Secretary of State)
• A full role in planning and decision making in respect of the infrastructure used by Welsh (cross-border) services
• Arrangements for owning, allocating and managing rolling stock which serves Wales’ needs
• Accountability to the Welsh Government for all organisations responsible for delivering passenger services and rail infrastructure in Wales
• A formal input for Wales in the Office of Rail and Road’s regulatory activities

The changes that can be made without amendments to legislation or a full assessment of the infrastructure should be made shortly after the review.  To move us towards a more satisfactory arrangement for the infrastructure while assessment work is underway, I will be pressing for an agreement which will allow us to manage the asset and enhance it with UK Government funding.  We are uniquely placed to do this with the recent creation of Transport for Wales.

This review is an opportunity to reform the railway and create the fully integrated public transport network which Wales needs.  This opportunity should not be missed.  Our railway could be one of our most socially and economically valuable assets with untapped potential to make a larger contribution in Wales to people’s lives, communities, environment and to our economy.