Baroness Jenny Randerson writes…Consumer rights should cover train franchises

The recent poor performance of the Southern rail franchise, operated by Govia Thameslink Railway, have cast concern at the Government’s decision to exclude rail from the 2015 Consumer Rights Act. An Act which allows customers to be adequately compensated for any excessive disruption. In addition, passengers being forced to travel in cramped conditions when ironically, there are tight regulations preventing the overcrowding of animals when they are transported by train, but no similar rules relate to people.

Recent news headlines have been filled with these chaotic tales and the genuine distress of travellers, but what is more worrying is that this relentless and overwhelmingly negative impact appears to have no end in sight despite the recent reinstatement of 119 services. Both Tim and I have provided numerous comments on how the Government should and must intervene in a situation that is completely and utterly out of hand, and we share the exasperation of GTR’s customers.

Transport Secretary Chris Grayling recently declared that re-management of the franchise would be tantamount to “moving the deckchairs” on the Titanic, hardly encouraging words from one of the very few people that could take control of this mess. Additionally, the Home Secretary has been equally ineffective and stands by whilst her constituents, and many others, continually suffer.

The franchise has only operated in its current form for just over a year, with a further five years left to go in this agreement, who knows what else could go on if this is allowed to endure. It is time that GTR was stripped of these operating routes and made an example of, ensuring that sanctions and standards are placed within future contracts as a priority. This would go some way to reassuring passengers that the Government recognise people have been short-changed at best and disrespected at worst.

The issue of compensation is contentious. The ‘Delay Repay’ scheme currently in place is woefully inadequate and overcomplicated. That train franchises are excluded from the Consumer Rights Act is clearly wrong and a real kick in the teeth for those paying thousands in ticket prices. They deserve the right to be reimbursed in line with the inconvenience caused by delays and cancellations as it is home life, work and leisure arrangements that are all having to be jeopardised in a disaster over which they have no control.

Because of the inconsistency of the trains, the conditions within which people are forced to travel are even more cramped and unpleasant than usual, and the usual is frequently bad enough. Some trains are running at 200% over capacity and with train fares rising at double the rate of wages at almost 2%, people are understandably annoyed. With people paying more and getting less Southern should be taking steps to address this themselves. They could freeze ticket prices and minimise pay-outs to shareholders; these dividends last year totalled £222m, at an increase of 21%.

Part-time season tickets would greatly benefit those working infrequent hours, only a few days or on low incomes. It is an idea that was agreed in principle years ago but has never come to fruition. Flexible ticketing generally would go a long way to recognising the variety in the demographic of train users.

So it is not just the poor performance, it’s the poor attitude of the hierarchy at GTR that is failing customers and staff who are being forced into a position where they feel industrial action is necessary. In the past I have criticised the Unions myself, and I don’t believe they always act without political motivation, but Southern staff, in addition to customers, do have legitimate cause for complaint too. They have truly been at the sharp end of public anger and frustration in recent months.

Once again I urge the Government to put people first and not big business, now and in the future, providing watertight contracts where a repeat of this calamitous situation is never able to happen again. A start would be to include trains within the authority of the Consumer Rights Act and this is something that my party and I will be campaigning on both inside and outside of parliament.

* Jenny Randerson is a Liberal Democrat member of the House of Lords, and is the party's front bench spokesperson on transport.

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21 Comments

  • The train operator is carrying out Government instructions to reduce operating costs in order to cut taxpayer funded subsidies. The unions oppose these cust and have taken industrial action which has seriously affected train services. Why should the taxpayers then have to pay compensation to passengers for delays and overcrowding ?

  • How about properly identifying who is responsible for what and allocating blame accordingly? It’s far too easy to blame the TOC for things way beyond their influence.

    Who controls fares and season tickets?
    Who controls the quantity and type of rolling stock?
    Given that TUPE rules would ensure staff and managers would move with the transfer of the franchise, what makes you think that stripping GTR of their franchises would result in anything changing, and if something would change, what and how?
    Can you prove that GTR have broken their franchise agreement to the extent that removing the franchise would not itself be a breach of contract? If not, who will pay the damages to GTR, taxpayer or fare payer?
    Who are you going to give the franchises to and if private would they not want a profit and dividend? If public where are the experienced successful senior management going to come from?
    How are you going to recruit more drivers given how long it takes to train them?
    How much of the problem can be identified to the publicly owned Network Rail?
    What on earth has the Home Sec got to do with this beyond being 1 of dozens of MPs impacted?
    Is there rail and platform capacity for more trains on GTR franchise services?
    Can you guarantee absolutely that increasing GTR services won’t impact on services elsewhere in the country as leased rolling stock is moved around not increased?
    Given many of these lines are loss making and need subsidies to keep them going who is going to fund more services needing more trains and more on-board staff?
    Why can’t GTR drivers shut the doors when drivers on many other operators and the Underground manage to do it quite safely?
    Who is going to compensate passengers? If TOCs they would build the risk and cost into franchise bids. Problems caused by DfT, ROSCOs, Network Rail? How do you apportion? Bottom line the compensation will be funded by other passengers via fare hikes or the taxpayer.

    I know it is tempting to take the simple route and blame the badge on the train but it is pointless to suggest actions that target the wrong culprit and achieve nothing other than making a political point. I’m quite disappointed to be honest.

  • nvelope2003/Stevan Rose…Did you miss the “these dividends last year totalled £222m, at an increase of 21%”?

    If these figures are correct what impact would keeping guards on the trains have overall?…

    Before criticising Network Rail why not investigate the performance of it’s predecessor, the privately owned Railtrack….

    Anyway, why the demand that a rail transport system MUST make an ever increasing profit? After all, major government projects are always ‘sold’ with the, “‘it creates jobs” label…How many private sector jobs in London, and other major cities, are only viable because of an effective rail transport system?

  • Stevan Rose 31st Aug '16 - 3:25pm

    @expats. I’m not criticising Network Rail, I’m asking what culpability they have (if you want to include their defunct predecessor fine but what does that bring to a practical solution) because it’s not all the TOC’s fault. I’m not suggesting railways should make profits. They don’t, they require subsidies. But if you want more someone has to pay more and I would suggest that people outside the South East who don’t use the trains contribute enough already.

    £222m dividend. I can’t find any source for that but the last Southern dividend last year was £25m on profits of £29m so I would suggest the decimal point is in the wrong place. Govia runs several franchises and is a partnership of two other companies. £25m doesn’t sound hugely excessive when you realise the GTR contract is worth £1.2bn per year. So another question… Where did £222m come from?

    On the GTR the Government takes all the fare revenue by the way, GTR just collect it and hand it over. So have no influence on fares. I would expect a front bench spokesperson on transport to know that. How does GTR freeze fares they just collect for the DfT?

  • nvelope2003 31st Aug '16 - 3:35pm

    Expats: It is not clear what the £222 million dividends relate to as the company has other activities. It has stated that it does not plan to remove conductors from the trains but give the driver the responsiblity for operating the doors. Not so long ago the passengers opened and closed the doors themselves. British Rail sacked hundreds of thousands of staff as they were no longer needed. Under nationalisation staff were reduced from 750,000 to about 100,000 because passenger numbers kept falling and freight traffic collapsed although the pre 1948 private companies had an extensive network of scheduled freight trains and I can remember even small stations which bustled with activity.
    Since the train operating companies were franchised to private companies rail traffic has improved tremendously, hence the track capacity problems which were caused by BR cutbacks. BR existed for 48 years, Railtrack for 6 years and Network Rail since 2002.

    I rely on public transport and would rather see a thriving profitable railway than a loss making declining one but I presume those who want nationalisation for political reasons are not concerned with practical issues. I do not want to see a railway system just reduced to a few long distance and commuter routes around London which was the way things were going.

  • I really don’t know why some Lib Dems are prejudiced against public ownership of rail franchises as they come up…….. it seems to be some sort of ‘economic liberal’ obsession (private good/public bad).

    The East Coast main line did a wonderful job after coming back into public ownership when GNER went pop make a massive financial contribution to government revenue before it got into the hands of Virgin & Stagecoach. Eastcoast had great staff morale and offered a splendid service – and we were never got barraged with fluffy PR guff about not putting a goldish down the loo……

    And oddly enough………….. the vast majority of the rest of the so called private rail operators are already state owned (by the Germans, the French and the Dutch). Given the Europhile tendencies of LDs, this seems perverse.

  • nvelope2003 31st Aug '16 - 3:52pm

    Stevan Rose: Thank you for the information.

    Expats: I expect that a lot more jobs are created by profitable companies. The unprofitable companies normally go to the wall. There are millions of jobs which have nothing to do with public transport and it could be argued that the subsidies just encourage overcrowding and excessive amounts of travel.

    Southern is operated under a management contract and is not a franchise like most of the other train operators. If the profit is only £25 million that could easily be lost if there was a small downturn or a marginal increase in costs. All businesses have to keep their costs and finances under review. We have seen enough examples of the consequences of failing to do that recently and their effects on employees. There is absolutely no reason why railways, like every other business, should not be operated efficiently. Why should passengers and tax payers pay for waste ?

  • Stevan Rose 31st Aug '16 - 4:27pm

    “it seems to be some sort of ‘economic liberal’ obsession (private good/public bad).”

    Maybe it’s more balanced – private can be good/bad, public can be good/bad, cooperatives can be good/bad, not-for-profits can be good/bad, combinations of some or all can be good/bad. In this case there is a good mix of public and private elements that all have some culpability in something quite bad.

    You don’t solve the problem by applying an ideological solution but by getting all the stakeholders to work better together and often that means stopping management by contract terms and threats of penalties – all that does is ensure delivery to the letter of a contract with no goodwill that is vital in complex situations like this one. I’m guessing that the management of the GTR contract right now consists of endless meetings of lawyers, or service directors with lawyers in tow, where no side will concede any point that might damage their commercial interests. You have to dump the lawyers and commercial managers at the door and employ strict Chatham House Rules.

  • nvelope2003 31st Aug '16 - 7:30pm

    If foreign state owned railway companies wish to operate UK franchises what is wrong with that ? The whole idea is to encourage some competition so we have foreign companies tendering instead of British ones, probably because with an average profit margin of 2% they are not interested, while the foreign companies can get a bit of experience of operating commercially in preparation for when their own systems are put out to tender. We are not the only country which uses private comapnies to operate rail services. It happens in France, Germany etc and some of these services are operated by UK companies.

    I have nothing against nationalised companies if they work efficiently but generally an element of competition improves services. If a private business goes bankrupt there are normally plenty of others to cope with the trade, When Woolworth and BHS etc closed there was no shortage of other shops to go to.
    If you compare private supermarkets with the Co-op they are generally more succesful because they have to be or they would close down. Why should that not apply to public transport. It is the excessive regulation and detailed oversight from Whitehall which creates a lot of the problems.

  • Can we drop the comparisons between moving cattle and moving people?

    Cattle have no choice – people do. If the train’s too crowded for you don’t get on.

  • Simon Freeman 31st Aug '16 - 8:35pm

    Why not just take the rail contracts back into public sector when they end and have done with it? If Southern Rail is failing surely they are in breach of contract?

    Some things are better in the private sector, some public, and rail should be public, a bit like the NHS, BBC, Post office.

    i just heard today about another privatised service in Sheffield revert to Council Control.

  • Stevan Rose 31st Aug '16 - 9:55pm

    “Why not just take the rail contracts back into public sector when they end and have done with it? If Southern Rail is failing surely they are in breach of contract?”

    That would depend on whether you can pin the blame fairly on GTR and the terms of the contract. The (former) Minister is on record as saying 65% of the problems are track related. A fair whack will be down to the Minister – fares and rolling stock. Leaving GTR with a small proportion of the blame, perhaps their industrial relations expertise, though the RMT don’t come across as apolitical and interested only in the safety of passengers. Passengers don’t care who is ultimately at fault for the service and fares, they blame the name on the station, trains and staff badges. Politicians who want fairness and justice should really be looking a bit deeper. Not least because you can’t solve a problem unless you know the real cause.

  • Southern isn’t in breach of contract because the contract goalposts have been moved by the DfT to ensure it doesn’t happen. It could get embarrassing for the DfT if they had to take the contract off them.

    This whole sorry saga seems to have been kicked off by the DfT awarding the contract to the current operator. Just how workable were their plans compared to those of the rival bidders? Was the possible operational robustness of others bids sacrificed for the sake of the DfTs precarious rail budget?

    Someone quite independent of the DfT should be tasked with going through all those bids with a fine tooth comb to give us the true answers. You could anonymise the others so to protect the innocent.

    As for the CRA delay, the reason the DfT are not putting rail in it now is that they would have to foot the bill. That would blow another hole in their budget.

  • The fault of problems on the railways are with the unions and unions alone. Trains without conductors and stations without staff have been proven safer by the Rail Safety Board than staffed ones because other staff cause miscommunication issues with drivers.

    Despite this the rail unions would rather endanger lives by using 19th century practices. And rather than step up to the plate and provide proper customer service, drivers would rather hide in cabs and absolve themselves of responsibility for passengers, despite wanting management levels of pay.

  • Opposition to foreign state railways running our services is racism pure and simple.

  • Lib Dem David Boyle, a regular traveller on Southern Rail, has written several posts in recent weeks about the dispute on his blog which are well worth reading. See for example:

    http://davidboyle.blogspot.co.uk/2016/08/the-strange-and-worrying-silence-of.html

    What strikes me are the parallels with the Junior Doctors’ dispute – an inflexible, ideologically motivated and target-driven approach from government that simply doesn’t work. Of course, the ministers responsible try and blame it all on intransigent unions (who admittedly don’t always help their case) but the problems are really due almost entirely to their own incompetence.

    @ Stimpson – “The fault of problems on the railways are with the unions and unions alone.” Do you have any evidence for that or is it just a ‘drive by assassination’ attempt? If you do have evidence, please share it.

  • Matt (Bristol) 1st Sep '16 - 5:29pm

    Some comments:

    – I can see why extending consumer rights legislation to the railways will make passengers (sorry, customers) happier in the sense that they will have a right of redress, and I’m not against it in principle but what it will immediately structurally do to make the railways more effective is not entirely apparent to me. That, to be honest, is the same concern I hold about Corbyn’s ‘renationalise everything’ approach: I hold no ideological prejudice against it, but in itself it produces no new money and no new infrastructure.

    – David Raw is right that we should not rule out public ownership (although I am more resistant to centrally-managed public ownership than I am to regionally-managed public ownership) – it is frightening how much the debate has shifted to the right since the 80s. I was with a (leftwing, Green voting) friend last night who seemed to be unaware, for eg that National Express had been nationalised in the past, and that it would be ‘illegal’ to nationalise anything that was not already in public hands (he seemed to use ‘nationalise’ only to mean ‘not re-franchise’ ie on the lines of the Direct Railways experiement).

    – David Boyle’s other points, about DfT targets being fundamentally flawed, and mutualisation on the John Lewis model presenting a significant ‘raod not yet taken’ require an answer, which no-one seems yet prepared to give.

  • nvelope2003/Stevan Rose..please define ‘Private’?…The private Southern Rail has just been given an additional £20million of taxpayers’ money…
    .

  • @expats – “please define ‘private'”

    ‘Private’ fundamentally means a legally different organisation to government and it’s departments of civil servants.

    What this enables is the costs of the railways much more visible to all and secondly helped to make the system more honest, clarifying roles and responsibilities and setting service levels that can be objectively measured.

    Hence that £20m will actually move between organisations and bank accounts and thus be accounted for, rather than simply be lost in Whitehall departmental budgets. Ie. We only know about the £20m because the government has had to get it’s chequebook out.

  • The issue of compensation is contentious. The ‘Delay Repay’ scheme currently in place is woefully inadequate and overcomplicated.

    This is an area where the government/DoT could act and unify compensation schemes across the network. For example, as a session ticket holder for services on the Euston line, I automatically got refunds for poor service – which in some years amounted to several months of travel.

  • Stevan Rose 3rd Sep '16 - 7:34pm

    I take it that the good Lady at the top of this page is an Internet fly-poster from the silence. I was under the impression that writers are encouraged to monitor and respond to commenters. Lots of questions for Jenny but no answers.

    “Southern Rail has just been given an additional £20million of taxpayers’ money”

    No it hasn’t, though that’s what sloppy lazy journalists want you to think, including headlines in the Independent. Look more closely. Grayling refers to a £20m scheme to tackle the cause of breakdowns. It includes replacing track, removing vegetation, improving depots used (but not owned) by Southern. This is money being pumped into publicly owned Network Rail.

    Yet our own spokesperson is quoted as calling this a “bailout” of the Southern franchise. Should the good Lady pass by, perhaps she would explain why she thinks it is right to distort the truth? I fully expect Corbyn’s Transport shadow to depict the spending as going to GTR rather than the nationalised failure that is actually recipient of the money and the invisible cause of a majority of the delays. I fully expect Grayling and the DfT to go along with the misperception diverting attention away from the actual failure that is their direct responsibility. Probably opening champagne at seeing their opponents also gunning at the wrong culprit. But this is supposed to be a Party of integrity and justice, so why are we protecting and not targeting Grayling and Network Rail?

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