Rail regulator could wield axe over trains

The unelected rail regulator would have the power to cut trains services and even axe whole lines under an obscure clause in the Railways Bill which could have a profound effect on the profitability of train operators.

The Office of Rail Regulation (ORR) would be able to decide which routes and services will survive if there is a shortfall in government funding.

The Bill, currently going through Parliament, strips the ORR of the right to set the budget for the industry - a power aimed at protecting private investors from short-term changes in government policy. However, the proposed legislation will give the watchdog the power of life or death over services.

Roger Ford, a rail analyst, said the Bill would allow the regulator to "do a Beeching" - Lord Beeching was the chairman of the Transport Commission in the 1960s who closed down many rural lines.

In the latest issue of theModern Railways journal, Mr Ford said one of the main options for saving money would be a reduction in railway maintenance. That would lead to an increase in the number of temporary speed restrictions during the next five years.

"Slower, fewer trains with more delays mean less revenue, the business plan is shot, the franchise's profits fall," he wrote. Mr Ford argued that there would be a disproportionate impact on freight services if secondary lines bore the brunt of the economies.

The proposed legislation - which also abolishes the Strategic Rail Authority - was born partly out of ministerial frustration with Tom Winsor, the previous Rail Regulator. Mr Winsor angered the Government in 2002 by insisting on an extra £7bn for the industry.