An anguished age for the train
We’ll send you a myFT Daily Digest email rounding up the latest FirstGroup PLC news every morning.
Some news stories seem absurdly linked. Amid the awful child-sex scandal of the late Sir Jimmy Savile, the television personality, and the West Coast main line tendering fiasco, I could not help remembering the hugely successful advertising campaign for British Rail’s InterCity 125 fleet that Savile fronted in the early 1980s: “This is the age of the train.” As it happens (as Savile would have said), I followed all this from the Labour conference at Manchester Central, a former railway station only streets away from the Ritz Ballroom, which Savile managed in the 1950s.
The InterCity 125 high-speed train, and Savile’s advert that promoted it, were a high point for state-owned British Rail amid the railways’ postwar decline. The InterCity service was a big hit with the public and its profits cross-subsidised rural routes threatened with closure.
Most of the fleet has remained in service since privatisation. Let us hope the Department for Transport has got its sums right on the £4.5bn deal for a Hitachi-led consortium to build replacement trains.
The West Coast affair, in which the DfT cancelled a deal for FirstGroup to take over the franchise from Virgin Rail after finding serious technical errors in the tender process, takes the railways’ tortuous history into a new phase. A year-long delay on future contracts is now expected as the government tries to work out what went wrong and how to rescue the franchising model.
We do not yet know the full details, beyond that the DfT appears to have failed to take account of inflation and to have miscalculated some passenger forecasts.
One consequence is that political pressure will grow for the government to reconsider support for the proposed £32.7bn High Speed 2 between London and the north. Opponents were already questioning the financial models used to justify the scheme even before this demonstration of incompetence.
Notebook, along with much of the business community, is in principle keen on HS2, which would eventually run to Manchester and Leeds. The West Coast main line is set to reach capacity by 2030, according to official forecasts, so there is a serious danger of damaging the north’s economy in future decades if it is not built.
But it will require sound figures and political nerve to make it happen. Patrick McLoughlin, the transport secretary, defended it at the Conservative party conference on Monday, pledging a study on extending the line to Scotland. But Britain is rarely at ease with grand projects, so I would not count on it.
Nothing is free
For the first time, “free” universal benefits created in Scotland since devolution are being seriously questioned. Two weeks ago Johann Lamont, leader of the Scottish Labour party, asked whether benefits such as free NHS prescriptions and student tuition, often enjoyed by the affluent, were the best use of resources. Then Robert Black, the former auditor general, also questioned their affordability.
If Scotland’s independence referendum in 2014 results as expected in a No vote, it is possible that the UK government will grant the Scottish parliament further tax-raising powers to match its spending. Then it will certainly have to take more care of what it spends.
The principle behind this argument is highly relevant to the rest of the UK. It makes the maintenance of universal benefits for pensioners such as free bus passes and winter fuel allowances – defended again by David Cameron, prime minister, on Sunday – look even more dubious.
Out of the blue
Intriguing ship-jump of the autumn: Nick Walkley, chief executive of the London borough of Barnet – the flagship Tory “Easycouncil” that is privatising swaths of services – is taking a pay cut to head neighbouring, Labour-controlled Haringey. A “personal career decision”, he says. Quite a move.
I once saw Roy Hodgson, England football manager, on the Tube, but I missed a trick by not asking him his team plans. Last week he apologised after being too frank with another passenger. I doubt this is what Boris Johnson, London mayor, had in mind when he celebrated the novelty of passengers talking to each other during the Olympics.
Get alerts on FirstGroup PLC when a new story is published