Rail Regulator
Encyclopedia
The Rail Regulator was a statutory office, created with effect from 1 December 1993 by section 1 of the Railways Act 1993
, for the independent economic regulation of the British railway industry.
The office was abolished from 4 July 2004, using powers under the Railways and Transport Safety Act 2003
, when (in line with constitutional changes made to other economic regulatory authorities) the single-person regulator model was replaced by a nine-member corporate board called the Office of Rail Regulation
.
Under the Railways Act 2005
, the Office of Rail Regulation was later given safety jurisdiction in addition to economic regulatory functions.
, who held office from 1 December 1993 until 30 November 1998. Appointed by the Conservative Secretary of State for Transport
, John MacGregor
MP, Swift had little hope of being reappointed for a second five-year term by the new Labour party Secretary of State for the Environment, Transport and the Regions
and Deputy Prime Minister John Prescott
MP. Prescott had announced at the Labour Party conference in September 1998 that he intended to have a "spring clean of the regulators".
Because Nolan rules on the making of public appointments take months, Prescott appointed Chris Bolt
, Swift's chief economic adviser, as regulator on an interim basis from 1 December 1998 on a seven-month contract, to allow him to go through the process for a full-term appointment.
Prescott's choice for regulator was Tom Winsor
, a lawyer and partner in a leading City of London law firm who had shown his impatience with the poor performance of Railtrack
, the owner and operator of the national railway infrastructure. Winsor held office from 5 July 1999 until 4 July 2004, during some turbulent years in British railway history.
MP, Stephen Byers
MP and Alistair Darling
MP—and the chairman of the House of Commons Select Committee on Transport Gwyneth Dunwoody
MP.
That jurisdiction comprised:
The independence of the Rail Regulator was established by virtue of:
In October 2001, the independence of the Rail Regulator was threatened when the Secretary of State for Transport—Stephen Byers
—took steps which led to the placing of Railtrack
into railway administration. Although successfully resisted, on 15 July 2004 the government announced a legislative intention to restrict the jurisdiction of the Office of Rail Regulation
. The Railways Act 2005
was passed in April of the following year.
During the final Parliamentary stages of the passage of the Railways Act 2005, the Government sustained a defeat in the House of Lords over an amendment which would have protected passenger and train operators against a diminution of infrastructure quality or performance, or being held rigidly to their contracts for the provision of railway services which assumed no such diminution, if the Secretary of State for Transport
restricted funds available to Network Rail
. However, the amendment was reversed the same day in the House of Commons with a much weaker provision substituted for it. The House of Lords did not insist on their original amendment, and the legislation was passed without the protections which the train operators needed. Critics regarded this as an unjustified interference in an inter-dependent contractual matrix, contrary to the legitimate expectations of private investors in the railway.
Railways Act 1993
The Railways Act 1993 was introduced by John Major's Conservative government and passed on 5 November 1993. It provided for the restructuring of the British Railways Board , the public corporation that owned and operated the national railway system...
, for the independent economic regulation of the British railway industry.
The office was abolished from 4 July 2004, using powers under the Railways and Transport Safety Act 2003
Railways and Transport Safety Act 2003
The Railways and Transport Safety Act 2003 is an Act of the United Kingdom Parliament-Purposes of the Act:The purposes of the Act include:-*the creation of the Rail Accident Investigation Branch...
, when (in line with constitutional changes made to other economic regulatory authorities) the single-person regulator model was replaced by a nine-member corporate board called the Office of Rail Regulation
Office of Rail Regulation
The Office of Rail Regulation is a statutory board which is the combined economic and safety regulatory authority for Great Britain's railway network. It was established on 5 July 2004 by the Railways and Transport Safety Act 2003, replacing the Rail Regulator...
.
Under the Railways Act 2005
Railways Act 2005
The Railways Act 2005 is an Act of the Parliament of the United Kingdom concerning the regulatory structure for railways in the United Kingdom.- Overview :...
, the Office of Rail Regulation was later given safety jurisdiction in addition to economic regulatory functions.
Regulators
The first Rail Regulator was John Swift QCJohn Swift QC
John Swift QC is an English barrister and a leading authority on competition law.- Rail regulation :From December 1, 1993 until November 30, 1998, Swift was Rail Regulator and International Rail Regulator, having been appointed to those posts by Conservative politician and Secretary of State for...
, who held office from 1 December 1993 until 30 November 1998. Appointed by the Conservative Secretary of State for Transport
Secretary of State for Transport
The Secretary of State for Transport is the member of the cabinet responsible for the British Department for Transport. The role has had a high turnover as new appointments are blamed for the failures of decades of their predecessors...
, John MacGregor
John MacGregor
John Roddick Russell MacGregor, Baron MacGregor of Pulham Market, OBE PC FKC , is a politician in the United Kingdom. He was educated at Merchiston Castle School, then at the University of St Andrews and at King's College London...
MP, Swift had little hope of being reappointed for a second five-year term by the new Labour party Secretary of State for the Environment, Transport and the Regions
Secretary of State for the Environment, Transport and the Regions
The Secretary of State for the Environment, Transport and the Regions was a UK Cabinet position created in 1997, with responsibility for the Department of the Environment, Transport and the Regions ....
and Deputy Prime Minister John Prescott
John Prescott
John Leslie Prescott, Baron Prescott is a British politician who was Deputy Prime Minister of the United Kingdom from 1997 to 2007. Born in Prestatyn, Wales, he represented Hull East as the Labour Member of Parliament from 1970 to 2010...
MP. Prescott had announced at the Labour Party conference in September 1998 that he intended to have a "spring clean of the regulators".
Because Nolan rules on the making of public appointments take months, Prescott appointed Chris Bolt
Chris Bolt
Christopher Bolt Born Oct 16 1982 in Monrovia CA. Interests are bmx,fmx, welding - Railways :In 1994, Bolt moved to the Office of the Rail Regulator to take up appointment as chief economist...
, Swift's chief economic adviser, as regulator on an interim basis from 1 December 1998 on a seven-month contract, to allow him to go through the process for a full-term appointment.
Prescott's choice for regulator was Tom Winsor
Tom Winsor
Tom Winsor is a British lawyer and economic regulatory professional who was, from 5 July 1999 until 4 July 2004, the Rail Regulator and International Rail Regulator for Great Britain. He is a partner in international law firm White & Case LLP...
, a lawyer and partner in a leading City of London law firm who had shown his impatience with the poor performance of Railtrack
Railtrack
Railtrack was a group of companies that owned the track, signalling, tunnels, bridges, level crossings and all but a handful of the stations of the British railway system from its formation in April 1994 until 2002...
, the owner and operator of the national railway infrastructure. Winsor held office from 5 July 1999 until 4 July 2004, during some turbulent years in British railway history.
Jurisdiction
The Rail Regulator was the most powerful player in the privatised British railway industry. His jurisdiction was wide—too wide for the liking of many politicians, including the first three Labour Secretaries of State for Transport—John PrescottJohn Prescott
John Leslie Prescott, Baron Prescott is a British politician who was Deputy Prime Minister of the United Kingdom from 1997 to 2007. Born in Prestatyn, Wales, he represented Hull East as the Labour Member of Parliament from 1970 to 2010...
MP, Stephen Byers
Stephen Byers
Stephen John Byers is a British Labour Party politician who was the Member of Parliament for North Tyneside from 1997 to 2010; in the previous parliament, from 1992, he represented Wallsend...
MP and Alistair Darling
Alistair Darling
Alistair Maclean Darling is a Scottish Labour Party politician who has been a Member of Parliament since 1987, currently for Edinburgh South West. He served as the Chancellor of the Exchequer from 2007 to 2010...
MP—and the chairman of the House of Commons Select Committee on Transport Gwyneth Dunwoody
Gwyneth Dunwoody
Gwyneth Patricia Dunwoody was a British Labour Party politician, who was the Member of Parliament for Exeter from 1966 to 1970, and then for Crewe from 1974 to her death in 2008...
MP.
That jurisdiction comprised:
- power to determine the financial framework of the railway industry, setting price controls for access to the national network of railway facilities (principally track and stations), through the power to determine the efficiency and activity levels necessary for the competent operation, maintenance, renewal and enhancement of the railway system
- determining the fair and efficient allocation of capacity of railway facilities, including ordering compulsory third party access, and setting standard terms for access contracts
- issue, modification, compliance monitoring and enforcement of operating licences for railway assets
- development of industry-wide codes (particularly the network code) dealing with timetable development, changes to rolling stock and the network itself, the handling of operational disruption, transfer of access rights, local accountability, information provision and environmental protection
- acting as competition authority for the railways under the Competition Act 1998Competition Act 1998The Competition Act 1998 is the current major source of competition policy in the UK along with Enterprise Act 2002. The act provides an updated framework for identifying and dealing with restrictive business practices and abuse of a dominant market position....
- acting as appellate body for certain regulatory and legal disputes, including in certain cases of the establishment, amendment and abolition of safety standards.
Independence
Although appointed by a government minister, the Rail Regulator was independent of government. This was because, to encourage and maintain private investment in the railway industry, it was essential that decisions by the regulator were taken on objective economic criteria, free of undue political influence or considerations.The independence of the Rail Regulator was established by virtue of:
- the absence of any ability of the Secretary of State for Transport to give him directions or orders as to what he should or should not do
- the absence of any right of appeal to the Secretary of State for Transport in relation to the actions of the Rail Regulator
- the absence of the right of the Secretary of State for Transport to remove the Rail Regulator from office, except on grounds of incapacity or misbehaviour (the same grounds as apply to judges of the High Court).
In October 2001, the independence of the Rail Regulator was threatened when the Secretary of State for Transport—Stephen Byers
Stephen Byers
Stephen John Byers is a British Labour Party politician who was the Member of Parliament for North Tyneside from 1997 to 2010; in the previous parliament, from 1992, he represented Wallsend...
—took steps which led to the placing of Railtrack
Railtrack
Railtrack was a group of companies that owned the track, signalling, tunnels, bridges, level crossings and all but a handful of the stations of the British railway system from its formation in April 1994 until 2002...
into railway administration. Although successfully resisted, on 15 July 2004 the government announced a legislative intention to restrict the jurisdiction of the Office of Rail Regulation
Office of Rail Regulation
The Office of Rail Regulation is a statutory board which is the combined economic and safety regulatory authority for Great Britain's railway network. It was established on 5 July 2004 by the Railways and Transport Safety Act 2003, replacing the Rail Regulator...
. The Railways Act 2005
Railways Act 2005
The Railways Act 2005 is an Act of the Parliament of the United Kingdom concerning the regulatory structure for railways in the United Kingdom.- Overview :...
was passed in April of the following year.
During the final Parliamentary stages of the passage of the Railways Act 2005, the Government sustained a defeat in the House of Lords over an amendment which would have protected passenger and train operators against a diminution of infrastructure quality or performance, or being held rigidly to their contracts for the provision of railway services which assumed no such diminution, if the Secretary of State for Transport
Secretary of State for Transport
The Secretary of State for Transport is the member of the cabinet responsible for the British Department for Transport. The role has had a high turnover as new appointments are blamed for the failures of decades of their predecessors...
restricted funds available to Network Rail
Network Rail
Network Rail is the government-created owner and operator of most of the rail infrastructure in Great Britain .; it is not responsible for railway infrastructure in Northern Ireland...
. However, the amendment was reversed the same day in the House of Commons with a much weaker provision substituted for it. The House of Lords did not insist on their original amendment, and the legislation was passed without the protections which the train operators needed. Critics regarded this as an unjustified interference in an inter-dependent contractual matrix, contrary to the legitimate expectations of private investors in the railway.