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Sir Alistair Morton, the outgoing Head of the Strategic Rail Authority
Sir Alistair Morton, the outgoing Head of the Strategic Rail Authority

BBC BREAKFAST WITH FROST INTERVIEW: SIR ALISTAIR MORTON, Chairman Strategic Rail Authority

NOVEMBER 18TH, 2001

Please note "BBC Breakfast with Frost" must be credited if any part of this transcript is used

DAVID FROST: In a matter of days the chairman of the Strategic Rail Authority will be stepping down from his post, some months before he was due to finish the job. Sir Alistair Morton has admitted feeling frustrated by some of the handling of the railways and says the transport secretary, Stephen Byers, failed to involve the SRA in the decision-making process over Railtrack. Well given what's happened to that you must almost be relieved not to be involved in that.

SIR ALISTAIR MORTON: Yes.

DAVID FROST: Why are you leaving earlier?

SIR ALISTAIR MORTON: I came to that decision back in the spring, in fact before the election, that the Government and policy that I think was generated by Lord Macdonald with the Prime Minister's blessing, was not using the Strategic Rail Authority as that, a strategic authority. It wasn't giving it its terms of reference and letting it get on with it. And frankly at this stage of my career I decided that was not how I cared to spend the next few years. Also, it's going to be many years to put this straight and I think somebody younger ought to take the job and somebody younger is.

DAVID FROST: Do you think that in fact Stephen Byers did the right thing over Railtrack?

SIR ALISTAIR MORTON: Well let's distinguish between how it was done and the fact that something needed to be done. Yes, something needed to be done. What he actually did, somebody put it, if you plan the first ten percent of a programme the law of unintended consequences will take care of the rest. It seems to be going on.

DAVID FROST: So you're saying really - with the word strategic you mentioned just now - that there is still no coherent overall plan, and indeed including this where you're saying they don't really know what, now they've done it, what do we do next. But I mean basically there is, as yet, no plan to save our railways.

SIR ALISTAIR MORTON: No, and people go on about the fact that the SRA under my chairmanship has not produced a strategic plan. Well I reply to that, frankly, that events took charge of the situation quite some time ago, perhaps 18 months ago, and the structure of the industry is faulty, and therefore producing a plan, for which there is no money, for which the powers and structural relationships do not exist, is at best an academic exercise and I've been saying to people let's get the structure right. I've been saying that since earlier this year.

DAVID FROST: And they haven't done it?

SIR ALISTAIR MORTON: Not yet. I mean let's face it, the privatisation was faulty at the outset, back in the Conservative days of the mid-Nineties. It hasn't got better in the last two years and the problem is we have three black holes in effect. Railtrack, which has virtually imploded, has a management problem. Secondly, the regulatory system, which is wrongly structured and creating the SRA did not in fact put that straight - it wasn't done in a way that put it straight. And then thirdly, after we've solved those two, we'll have to look to the funding. But there's no point in talking about companies limited by guarantee and not for profit this and that, and other financing and funding matters, until you know you're getting the structure straight and what it is you're trying to fund.

DAVID FROST: And what is the danger that it will implode, the whole system will implode, as you said the management in Railtrack had - well what is the - are we on the brink of a potential disaster on our railways?

SIR ALISTAIR MORTON: I think that's alarmist language and I wouldn't like to use it, but I do not believe that the risks are getting less in the present interregnum that Stephen Byers has created. I think there's too much attention going to who said what and did what, and a lot of attention going to academic exercises about corporate structures that don't pay dividends, and not enough attention, no attention in fact, is going into just what is the structure of the railways when we emerge from administration.

DAVID FROST: And has Stephen Byers always been candid with you? Or not?

SIR ALISTAIR MORTON: I've seen very little of him since July. I mean he, he understood, from the time he arrived in office, that I wouldn't be there long term. He decided to interpret that as meaning he wouldn't consult me and, to be fair to him, he hasn't tried and I haven't - I've given him advice, I've written to him saying this is what you need to do, but this has not become a dialogue.

DAVID FROST: Not become a dialogue is it. And he's going to have a terrible job in terms of the not for profit, etc., etc., controlled by the government body, actually raising funds. I know they've got to produce a plan, but they haven't done that, but raising funds is going to be difficult isn't it?

SIR ALISTAIR MORTON: Yes, The City is very annoyed and is wondering just exactly what the level of regulatory risk in this industry is now. And indeed in Britain in general. I mean tremendous damage has been done by Stephen Byers' action. I think the Treasury is rightly worried about that. If this future structure, when we get to it, and I'm quite clear it ought to be the priority getting to it, is supported by the Government, it will have a triple A credit and get as much money as the Government is able to get, which is plenty. If it is not supported by the Government, in terms that financiers understand, it's hard to see how much money it will get from the private sector and will end up, if you like, being bailed out by the Government, which is a very unhappy state of affairs. We need to get it right, the Government needs to commit a level of support to the railways - because they don't make a profit in aggregate - and then needs to say what it's going to do and welcome the private sector in to create a market place, a market place that, as in North Sea oil where I once was, supplies the skill, supplies the management, supplies the funds, supplies the technology. If you get a market place where people are competing for work you get good prices, you get low cost financing. That's what the objective has to be. I have suggested ways towards that but we need to get many more minds than just mine working on that.

DAVID FROST: And everyone goes abroad to France and other countries in Europe and comes back saying "oh the trains are so much better over there than they are in Britain." What's the one thing more than anything else that our railway system needs in order to match say the French?

SIR ALISTAIR MORTON: It's a big, tall order.

DAVID FROST: Yes.

SIR ALISTAIR MORTON: The first thing it needs is the right structure between the regulators, the infrastructure providers, the future Railtracks - I think that's a plural - and the train operators. And also, obviously the maintenance contractors - all the parties to the industry. If you get their structural relationships right and the proper division of labour between them - both geographic and by activity - you can begin to say this thing will work and then you can start to get the money in and you can start to draw back the skills from the world marketplace. They exist, they've rather fled from our British railways and we talk about shortage of resources, but they do exist in the world.

DAVID FROST: Well that's encouraging. Thank you very much Alistair for being with us this morning and giving us that overview and underview of the situation on the railways. Thank you very much indeed, Alistair Morton.


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