Tuesday 13 April 1999
Since Sir Alastair Morton, head of the still phantom Strategic Rail Authority, has long shared the view that the more appropriate use of subsidy is to pay it directly to the rail infrastructure company, then the switch stands some chance of happening.
The outgoing Rail Regulator, Chris Bolt, is expected to tell Mr Prescott formally this week that there is nothing to stop him making the change, even though he will have to wait until the expiry of existing operating franchises before doing so.
The attractions to Mr Prescott are obvious. In other respects, however, this would be a quite retrograde step, taking the railways back to the bad old days of British Rail, when they were run by the Government. The present system, whereby the subsidy is paid to the TOCs, who then pay a correspondingly high access charge to Railtrack, may have its drawbacks, but at least it is transparent and accountable. In the days of British Rail, no-one seemed to have any idea where the public subsidy was being spent - least of all ministers and managers.
Railtrack is openly hostile to the idea - again for the obvious reason that it will lead to increased Government meddling. Railtrack also believes it will deter City investors at a time when it needs all the support it can get to fund its pounds 27bn ten year investment programme.
This may be a trifle alarmist. The level of public subsidy in the railways is declining rapidly. By 2003/4, it will have fallen from the present level of pounds 1.5bn annually to little more than pounds 600m a year. It is open to question what degree of leverage such a small amount will give the Government, or indeed whether switching it from the TOCs to Railtrack, is really going to matter very much.
On one level, however, Railtrack is right to be concerned. The key issue for the railways right now is investment. Since the public sector is unprepared to provide it, Railtrack and the Government have to find some way of persuading the private sector to do the business instead. While so many regulatory issues remain up in the air, of which the debate over who should receive the subsidy is just one, there seems little chance of doing so. Indeed, shareholders might do well to instruct their board to cease all investment until they know precisely what it is they are dealing with.
elephant appealThe first 23 lots in our charity auction have now gone. But there are 22 more still up for grabs
newsFormer soldier taped 33 of the animals to the floor and then stamped on them one by one
Michelle Nijhuis' daughter insists (s)he is, and she learnt a valuable lesson on gender in books
Sun will 'flip upside down' within weeks, says Nasa
Lee Rigby murder: How killers Michael Adebolajo and Michael Adebowale became ultra-violent radicals
Cycle death inquest: Boyfriend hugs driver of 32 tonne tipper truck that killed his girlfriend
Paul Walker death caused by speed alone
Apollo Theatre collapse: Scores injured after ceiling collapses in London's West End
- 1 America's 'virgin births'? One in 200 mothers 'became pregnant without having sex'
- 2 North Koreans are gasping for the truth: Let's give it to them
- 3 Sun will 'flip upside down' within weeks, says Nasa
- 4 Christmas comes early: Justin Bieber is 'retiring from music'
- 5 Cycle death inquest: Boyfriend hugs driver of 32 tonne tipper truck that killed his girlfriend
- < Previous
- Next >
iJobs Money & Business
£55000 - £120000 per annum: Pro-Recruitment Group: The Financial Services Tran...
£600 - £700 per day: Harrington Starr: Client based in West London is looking ...
£80000 - £120000 per annum + Benefits: Pro-Recruitment Group: Risk - Delivery/...
£Negotiable: Citifocus: This is a new role carrying responsibility for a numbe...