Regulator welcomes Government’s commitment to “independent economic regulation” and says it is now time to move on

10 February 2004
ORR/04/04

The Rail Regulator, Tom Winsor, today welcomed the latest government statement on the need to preserve independent economic regulation for the good of the public-private partnership of the railway, investors, passengers, customers and funders.

Delivering the Sir Robert Reid Memorial Lecture 2004 in London, Mr Winsor said:

“Government has recently said that it wishes to have more influence or control over how much money goes into the railway industry. In a statement to Parliament made yesterday government has now explicitly ruled out of the present rail review ‘any change to the rights of third parties, which will be protected’.  It said that ‘there is no question of weakening the effectiveness of economic regulation’, and it has recognised that the maintenance of ‘fully effective and independent economic regulation is critical for retaining investor confidence’.  It added that ‘there will be no diminution in the regulatory protection of the private sector investors in the railway’. 

“Having given these important and immensely valuable assurances, it is clear that government will not ask Parliament to intervene and curtail the powers of the ORR to carry out an access charges review.  Indeed the constitutional significance of such a step would be immense, and the adverse effects on the relationship between the state and the private sector in the railways and in other industries would be so severe as to be unthinkable. 

“Instead, government needs to make no change to the institutional structure of the railways other than to ensure that its agent, the Strategic Rail Authority, or the Department for Transport acting in its own right, engages - and is allowed to engage - in the planning of railway services in sufficient detail and in sufficient time to ensure that the ORR has the information it needs to translate a decided-upon service pattern, together with other contractual rights, into a set of network outputs which government is content it can afford without doing unnecessary damage to its other priorities.  This may well require five- and ten-year planning horizons for government, and once made they should be adhered to.  That is what transport planning needs anyway, and the present system works to encourage or even corral government into doing it.  This is the antithesis of the annualised financial settlement which BR had to endure almost throughout its existence and which drove railway professionals to the point of distraction.

“It is the role of government to make decisions about what kind of transport we want for the benefit of the community - and that includes the wider community which benefits from transport links.  It is the role of business to deliver transport services within that overall policy.  Business will do this provided it can have the confidence and certainty necessary to come in, and provide quality transport services at a fair and affordable price.”

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