Right. Hello and good afternoon. I'm Mike Oggin. Welcome to this sixth and final instalment of STEER's election reflections, where we've been bringing together industry experts to discuss the new government and its agenda for cities, infrastructure and transport. My name is Mike Goggin. I'm a managing director here with Steer, and I work with the company to support its growth across the globe. But I also have a pedigree in railways and have been working on rail reform for a few years now. I'm very pleased to be joined by Howard Smith, OBE, who joins us from TFL. And I'll introduce Howard in a moment to give him a full introduction. But I wanted to just note a couple of things. First of all, you'll find subtitled versions of this conversation after the event available for you, as well as a transcript. And you'll also find on your window of how you're enjoying joining us today, you can find there's a chat function. And if you want to pose questions or offer comments, we'll take a look at those after the event. We don't have time in this 30 minute slot to do that right now, but do feel free to give us your views and we may well respond to you as well afterwards. But we will promise to look at those after the event. So let me introduce you to Howard. Howard is the director for Elizabeth Lyon for TFL. He's enjoyed a career that spans over 30 years and quite a varied career. He joined British Rail much like myself a few years before me in 1986 and saw him operating stations in South and West London. He joined internationally. He worked for freight and worked on international joint ventures with SNCF and SNCB, so both public and private sector. He was instrumental in the Docklands Light Railway, championing expansions to Lewisham and Woolwich and Stratford International as well as City Airport. He also developed the London Overground concept and has been working with London for many years, including the London 2012 Games success. He joined Crossrail full time several years ago and has worked significantly to support the mobilisation and success the Elizabeth line is today. He was also chair of the Institute of Railway Operators for just over four years, finishing last year. Howard, very welcome. Thank you for joining us today. Thank you very much. I'm going to ask you, Howard, to give us your immediate reflection on what you've seen and heard of the government's agenda for rail. But just before that, I wanted to take a quick, for everybody who's listening and tuning in, to give us an idea of the scale of something we're talking about here. So we're talking about an industry which moves over 20,000 passenger journeys every day, sorry, passenger trains every day, 4 billion journeys a year. We're talking about a fare box of some 20 million. We are talking about a significant employment organisation, over 120,000 direct employees and another 200,000 in the supply chain. This is a significant undertaking of many organisations. But it's also got its challenges, as we know. The Williams Review kicked off in 2018 because of some of those challenges. It was published in 2021, and we've been waiting for rail reform to mobilise ever since. We've seen freight seeing decline in the number of tonne miles being operated. And we do know that passenger service reliability isn't where any of us would like it to be. Passenger revenue remains at about 80% of pre-pandemic levels, meaning government is finding it hard to make the sums add up. And we also have that continuing industrial relations challenge. Alongside that, we also know that with the government's agenda, we've got significant mayoral ambitions and combined authority ambitions for what they wish rail to do for their communities. So against that landscape, Howard, of scale and complexity. What's your immediate reaction from what you've seen of government? Well, I should just kick off, Mike, just by making clear that I'll be speaking as an individual today rather than on behalf of TfL. But as an individual, I would first say I'm one of a relatively small number of people now who've actually seen privatisation go the other way, if you like. I was around in British Rail. I remember looking at the major governments and thinking surely they're not going to sort of privatize us and actually of course it happened now you know first reflection is that breaking up a single industry into a number of parts is in many ways actually easier than bringing those parts to some extent back together again so the first thing is you know it's a really big challenge The second observation I'd have is that I think we've reached a point, you know, politics aside, where the status quo had, you know, run its course. If you think back to the election, you know, nobody was going into the last election saying, let's carry on doing roughly what we're doing at the moment. We can debate the reasons for it. We can debate, you know, exactly the way forward. But in terms of, is there a thirst for change? Absolutely. So I think You know, it's exciting times ahead. And I don't think there's an option that consists of saying no, go away. You know, it's a bit of a distraction. So I think we need as an industry now to sort of embrace change. I think it's time if you look back historically, I won't keep taking us back. But, you know, if you look back, I was just pondering on the fact that. Railways, rail grouping in 1923 from memory, you know, nationalisation 1948, British Rail. We actually had the current model for quite a long time. And by historic standards, you know, you could say another reason for sort of time to change. I think the final thing is that pre-COVID... And I remember talking at a Steers event a few years ago with Andrew Haynes about this. To some extent, the strengths of the previous model had actually kind of caused the railway to eat itself. We've been incredibly successful, and we must recognise that, in growing business. You know, growing the railway, growing passenger numbers, even growing significantly parts of freight at a time when coal was declining. What that led to, actually... was a need to invest in the railway in a way that the fragmented industry makes almost uniquely difficult with a whole series of privatized rights, organizations marking each other. So I think pre-COVID, you know, the old industry had kind of eaten itself. It was time for change. COVID obviously brought the cost and revenue challenge into sharp focus. So I think, you know, really exciting times ahead. And the need is to move as swiftly as we can towards clarity on the model, how long it takes to actually implement it, you know, whether we do it, try to do everything too quickly. I think there is a small risk of that, but I think clarity for everybody involved in the way forward is long overdue and something that the industry really looks forward to. Can I pick you up on, you said the privatized industry was, you know, made its own success and then got eaten by it in terms of that growth. If that was the paradigm then that that that's what the, private sector operators under franchising were able to do what would the new paradigm be what's the paradigm for the industry now post-pandemic public sector going for growth so I think we've seen you know I think we've we see an industry post-covid that has got and I'd describe it as both a cost and a revenue challenge and I actually think one of the potential strengths that uh a new railway brings is the ability to bring closer together profit and loss or revenue and cost, if we want to put it like that. You'll never do that. You know, somebody traveling from sort of lowest off to edge bastion can never be parceled up into this is what it costs and this is the revenue. Networks don't work like that. But I think understanding which bits of the railway we can grow and grow substantially in terms of revenue where we, you know, have got a cost challenge almost regardless of revenue. I think the other thing which I'd suggest we need to do is work out as an industry, how we can play to some of the government's other priorities. And one that particularly springs to mind, and you know, I've been very familiar with in a London context, but I think it goes more widely as housing. And you think of, you know, that it's not just, getting back the markets that we've lost. It's looking at how things have changed and looking at government priorities and people's priorities, customers' priorities, which are very different, and addressing those going forward. That's the challenge. That's the new paradigm. I'm taken by what you're suggesting is the ethos, and then I'm going to compare and contrast. What we understand are the government's principal bits of its rail agenda at the moment is clearly bringing back into national ownership those which are already franchised. There's the public ownership bill going through Parliament as we speak, so moving fast on that. There is talk of the national integrated transport strategy. There is a commitment to structural reform, so creation of Great British Rail, the creation of the Passenger Standards Authority. There is talk about improved passenger experience, but how much of those big building blocks that government, and we're all aware of, are so vital to get the change that you're suggesting is required? Is there any one of those or are they a distraction to the agenda that we ought to be leaning on? I'll be a bit more positive than that. Not necessarily a distraction, maybe an enabler, but purely an enabler. You know, I think when we're clear as an industry, I think. we've been kind of hanging around, not necessarily all of us, because some of us have had something to do in terms of opening the Elizabeth Live, but in many parts of the industry, you know, people have been in positions or waiting to see what's next. And I'm not dodging the question of which bits are important and which aren't. But I think once we've established a framework going forward, there's some really clever, really determined, really innovative individuals who I would like to think we can keep in the industry who can drive forward to that agenda. What we've been lacking critically in the last couple of years is that clarity as to the direction. OK, let me let me turn to some themes. We've got about 20 minutes left of the conversation already. So turn to the first thing, which is the customer, passenger and growth. What's the vital ingredient to get us moving on that growth? You talked about better understanding of local growth opportunity. Is there something that can be unlocked now? What's the change we would seek to have? I think. Probably the main insight I'd offer, and I need to avoid becoming one of these people of which there are a small number who would try and persuade everybody that the British, the final incarnation of British rail sectorisation was some sort of golden age. You know, it was good, but it wasn't perfect. And anybody who says that is wrong. Nevertheless, I think part of the insight from that that's applicable today is we're too... you know, frequent at the moment in saying, what does the industry need to do? What does we need to do for the customer? Actually, one of the fundamental insights of that last incarnation of British Rail was, you know, intercity, Network Southeast under Chris Green, you know, if you're looking for somebody who was obsessive about customers, you know, good old Chris and he's still done a bit of work for me recently, you know, still going absolutely customer obsessed. But looking at customers in a London and the Southeast context, which was quite the same as the Chris Green who then went and addressed some of the intercity market. You know, ditto if we look at some of the regions, if we look at Scotland, again, there's different, you know, there's different calls. So I think... what I'm really saying is that it's it's looking recognizing and coming you know bringing ourselves up sharp that we've probably done enough time since coving now to say these are the trends this is what's coming back this isn't this is broadly what's changed for good we won't be completely right but it's looking at it in that slightly disaggregated way rather than lulling ourselves into talking about what the industry needs to do for the customer Do you think that means, given your experience with TfL, do you think that experience is relevant in other parts of geography then? So you would be pushing for, you know, Manchester, Leeds, Bristol, etc. That combined authority experience is a powerful one and is more valid going forward, will be more, will support growth better? Yes, no, absolutely. I guess the, you know, the learning from TfL and its history from You know, some of the railways that I've worked on, like the DLR, like Overground, like the Elizabeth line, is that bringing some of these modal connections together is actually really important. But quite significantly, bringing those together with planning, you know, I don't want to keep coming back to the same thing, but as I say, particularly in a London context, but we've seen it nationally, you know, massive government priority on housing. Yeah. Or people, you know, public, probably slightly distrustful of railways in some ways, in a sort of customer transport way. If railways were seen as part of the, you know, unlocking of, as I say, affordable housing in areas that were sustainable and acceptable in a planning sense, you know, that's a real good. So that's one of the things that TFL, not perfectly, but TFL has brought together. Docklands Light Railway, you know, stunning in terms of the transformation it's brought in there in terms of east and west on the Elizabeth line. You know, you see the same. Is that applicable to Manchester in the north? Absolutely. Absolutely. Is there anything, I know you're answering on your personal basis, but is there anything that you would push and say, if I could get ministers to give me and TfL this, we could do more housing, we could do more growth, or we can carry more people. Is there anything that you have on your wish list already that you'd like to get a hold of? I think, I mean, and again, talking, repeat talking, you know, from personal experience and personal basis, I think it's, I think it's sustaining, you know, it's sustained policy. And again, it's easy, you know, we need to be avoid just becoming the sort of pub cynic, but it's easy to say that things have been twisted out of shape, you know, so many times that if you're a developer or if you're a local authority planning to, you know, build yourself around a transport link or particularly a railway these days, it's actually been quite hard. So I think sustained, I think there's a long standing and separate discussion about actually how developers contribute and big developers contribute to transport infrastructure. Not always the case, but quite often, you know, we unlock enormous value that we fail to capture. Elizabeth Lyon's probably the best example to date, actually, of value capture. But again, it's still not right. I guess if we're just extending it slightly more widely, one of the other great challenges that I think we've got going forward is to define the real purpose of HS2. Again, shares in HS2 could hardly be lower, but the only way is up. I wrote, as I've told you, Mike, before, 25 pages of sort of sponsors requirements for Crossrail, which I believe we've delivered and can tick and cross almost entirely. HS2, for reasons that we won't go into here, has almost ended up the opposite way round as an infrastructure project that's been pushed and pulled. And now we need to work out what the purpose is. Now, we could see that as an enormous problem, which in some ways it is. But my goodness, we're going to have a multi tens of billion pound bit of infrastructure there. Get that lined up and work out how that, you know, how we do play to the strengths of what's already been put in place and how we can build on it. There has got to be an opportunity there. You know, absolutely got to be an opportunity. And I think that's one of the huge missions without sounding too pompous in railways going forward is actually to define if you think what proportion of the rail investment budget the HS2 is going to consume. It's not a choice to stop. So therefore, let's make the most of it and let's work out how we build on it for the strengths I've just talked about. allows me to do a very deft segue. Watch this. HS2, one of the reasons for having HS2 is because it frees up the conventional network for other services and other purposes, including freight. So let's just turn to freight. You've got some experience back in the day with Channel and Tunnel Freight, as I noted. What's in it for freight? Because we've got this, GBR is going to merge. There's going to be a new access management regime. freight operators are going to be a bit nervous of revenue and those passenger services in the same organisation. How do we deliver for freight? Freight's still important to the UK PLC, for UK growth. What's your take on rail freight? I mean, my first thing, which is going back more than 20 years to Channel Tunnel experience and dealing with, and I've no problem talking about it now, but Deutsche Bahn, as was as a sort of monolithic organisation, is to recognise the concern. I used to run trains into Belgium, I used to run trains into France, and they made a lot of money because we were pushing trains a small distance over the boundary into Germany. It wasn't worth their while versus Germany. hoarding stuff to north german port so they made it very difficult for us now I'm not suggesting for a moment that you know there are people in gbr who are going to you know try and hijack things in that way but yes there's obviously a concern there if you're you know reorganizing the rest of the industry on more integrated lines that you become an outsider I think the second, you know, so there's a job to do that I wouldn't claim to be into the detail of, you know, in terms of insurance. But we've got to recognise that. And it won't just be freight. It'll also be things like open access. You know, so there is a job to be done ensuring fair play. Yes. Beyond that, again, it's recognising what freight, you know, what freight brings. It absolutely doesn't bring revenue. to the railway you know so it's never the winner in terms of being attractive in terms of revenue to the railway but it is a really big part of the policy agenda as we've talked about so recognizing it's the policy agenda and again without becoming a you know a sort of repeating myself again within freight one of my I think enduring but probably still relevant you know observations would be that again it changes in different ways So, you know, we've seen the absolute pretty well end of coal, you know, for better or worse, things like petroleum, oil products declining to, you know, almost the same way. At the same time, intermodal, yes, it's been through a tough time in terms of sort of world trade and the like lately, but there are opportunities in intermodal, particularly in things like construction. Construction, again, you know, is it a, low recently from which we might expect to see the green shoots of growth so I think for freight it's a fair market it's fair treatment yes on what it can do and recognizing again this policy steer um that's probably actually easier in a joined up industry than it was when we were trying to fiddle a whole series of microeconomic incentives if that makes sense yes yes understood understood okay and you also have already touched on the power of talent and people in the industry. And I wonder, you know, as I said at the start, we have a very large workforce, diverse set of experiences and roles. We know there's an importance in leadership, which is important in the frontline experience, which delivers so much of the passenger service, et cetera. How do we take people through this journey without getting lost, without being demotivated, given the sense of mission and keep the talent? I suppose. What's any mission, any things that you've managed to secure through Elizabeth line opening or something that you would if we could do this at scale, this would be useful. Oh, I mean, a few observations on that, Mike. I mean, I've showed a number of audiences the faces of the people who turned up to the opening of the Elizabeth line. many of them young people, and said that's not just our customers for the future, that's actually our workforce. The second thing is we've got to attract people, actually, because the demographics of the railway industry in terms of age, parts of it at least, are really problematic. So we've got to make ourselves attractive. The positive, I would say, and absolutely sincerely, would be that I think... The new railway potentially offers greater clarity and opportunity and particularly accountability for some roles. Again, without putting myself into too controversial territory, I've shared the observation with engineers who I work alongside. about how awful it is that a tiny, you know, precious amount of engineering talent in the UK, a huge amount of it, spends time writing reports to each other, making homework, assuring things, auditing things. if we, you know, or writing reports to back disputes of one sort or another, the more we can move away from that, the more we can have clarity and accountability. I mean, I go back again to a world where when I was the station manager, I was sort of, you know, kind of master of all I surveyed in terms of track and train. I'm not saying that's the ultimate answer, but I'm saying that there are opportunities there. I would say with my old role with the chartered institution of railway operators for railway operators and engineers in particular to actually have more satisfying um careers that has been based in an industry where they you know continually have to work with five or six people to achieve almost anything I heard so excited about the vision excited about those new roles which will give you a greater learning opportunity greater autonomy uh there's a greater Ability for an individual to have influence, to drive influence and a success. Absolutely. Greater accountability. Accountability is good. And I think most, you know, most people actually welcome it. And I think the chance that that is an opportunity. There are risks as well. Risks that we will lose good people. Yes. You know, from the industry, both because of reorganisation, because they might not be able to get a job paying quite what they got in the job that they were doing at the moment. They may just choose to go off somewhere elsewhere while the rail industry sorts itself out. So there are risks. But at the same time, I think going back to greater clarity, greater accountability does offer real benefits, particularly for operators and engineers, I'd say. Can I take it? Keeping on the people agenda, just tackle the thorny issue of workforce reform. And it's not reforming the workforce, really. It's adoption of technology, adoption of new ways of working, I suppose. How do we navigate that journey and how important is that journey to delivering a future sustainable railway? I mean, it's absolutely vital. We need, you know, we need a well-paid workforce. But we, I think most people would recognise we need to work, you know, we need to get productivity up in various areas. And that's not a... I don't see that as a pessimistic statement, you know, and I take that right across the piece. That's not aimed at, you know, particularly at sort of maintenance or a particular branch of operations. I mean, even on some of the stuff that I've been involved in over the years, too often... the answer to a problem has been to add in a bit of staffing here because it's just actually easier and quicker and cheaper even than doing the technological solution or the longer term solution or the structural solution. Yes. So I think, again, you know, In a more joined up industry, it's probably going, you know, I'd like to think it's going to be easier to take a longer term view, a more structural view that will actually lead to more productive, you know, well paid jobs. You could take the rail industry to some extent as a little bit of a parallel for actually how the UK productivity has gone more widely. You know, our problem as a nation is actually to some extent productivity. That's the unique challenge we've had and I think you could apply that challenge at least. I wouldn't like to back it up with figures just off the top here, Mike, but I think you could apply that challenge and I suspect see some reflection of that in the rail industry. So I think it's moving on, getting away from, you know, short-term solutions as the answer that just keeps things rolling and think how do we make things, how do we make people really productive and consequently really well paid and really valuable in what they're doing. Understood. Understood. I'm conscious of time. We've got about five minutes left. We've talked about customers briefly. We've talked about freight briefly. We've talked about people. Let me turn to engineering and assets, I suppose. Is there anything that you think the government must embrace? And it's on the net zero journey. It's on a growth journey. How does the railway navigate the path without, you know, it can't be more expensive. but we have aspirations to improve the technology of the system as you're talking about productivity. But I'm just wondering what your technique would be to adopt new technologies, new assets, et cetera. Is there anything, again, from TFL that Elizabeth Lyne or elsewhere we've seen that we can do at scale? I guess, and again, I wouldn't dodge the question, but I guess this is possibly one area where I'd be more cautious you know, than some of the others. I think while we're trying to do everything else we talked about here, to actually kick off some really new and novel stuff at the same time risks tripping ourselves up. So to use the Elizabeth Klein example, because you led me to it, you know, it is It is stunningly productive because effectively we've got very efficient long trains that are very full for a large part of the time running entirely on electricity. You know, should we concentrate in the next few years on doing that even better and having another 10% load factor and fuller trains elsewhere, or should we go off and sort of try and stick batteries on them or something? I'm not knocking, you know, to be clear, I'm not knocking battery technology in itself, but I'm saying maybe this is the area where we, at the time when we're changing everything else, need to build to our current strengths. Yes. without too much of overlaying on top of that a radical set of technology changes or something, some of which has tripped us up in the past and all of which are quite tricky to do. I'm thinking of big electrification schemes and things like that. So, you know, a bit of caution probably there, Mike. The only time I'll ever give you a bit of caution. Well, I'm going to ask you to be bold now. We've talked about some of the changes that can come about. You've sort of helped prioritise and lean into the policy agenda. preserve and protect talent go slower on technology if you want if I roll you forward five years time labour is coming up maybe it's gone the full term it's coming up to the next generation where would you like the industry the rail industry to be in five years time what would you be what will you have achieved I think I think I think a simpler railway you know we've said one that's actually sort of connected clear accountability I think I busier network rather than necessarily a bigger network, you know, focused, as we've said, on the customer, on dense flows, you know, and housing, as well as the areas where we run railways for policy reasons. So HS2 with a purpose, I'll repeat that again, you know, I think that's really significant. Sustainable demographic. And I guess customer trust is Because I think while it's not universal, I think we've severely dented over the last few years customer trust as an industry. So I think winning that back and with it, the commercial and political support is really important. And if we did all that, almost to come back to where I started. If we did all that, there's so many times when actually the UK industry has sort of led the rest of the world. You can argue whether it's led in a brilliant direction or not, and that's a separate discussion. But actually, if we did all of those things, we might have charted the next chapter. We've been ahead of most people most of the time. We might have charted the next chapter post-fragmentation for the world. How's that for us? That's pretty good. I mean, generally, you're optimistic, and there's no reason why you can't think the British rail industry... the sector won't be again, progressive and top of the game for the globe. Yeah. The ways, the ways forward, the ways up. Great. I can't think of a better way to end it. That's 30 minutes gone. Howard, you've ended up on, we've ended up on a high. So, um, I'll, I'll thank you so much for sharing, sharing thoughts and reflections, your personal thoughts and reflections. There is so much more detail we could have gone into on any of those topics. So I, I apologize for cantering you through them all so quickly, but you've done, you've done a masterful job. Uh, Thank you to you for tuning in, listeners, viewers. Much appreciated. As again, you'll find a recording of this in the transcript of all our conversations over the last week or so on steergroup.com, our website. Look out for further future events. And in the meantime, it's a thank you from Harold and a thank you from me for joining us. Thank you very much.