Prescott to carpet `appalling' rail firms

RAIL COMPANIES will be told this week that they will be booted out of the industry if they continue to provide an "appalling" service. The warning, to be given by ministers at a meeting on Thursday, will be accompanied by threats to cut subsidies.

John Prescott, the Deputy Prime Minister, will order Railtrack and the 25 train companies to stop squabbling over who is to blame for poor performance and start working to improve standards. The industry and its regulator have been summoned to the meeting with Mr Prescott and John Reid, Minister of Transport, after performance figures showed standards had slipped again.

Mr Reid said yesterday: "I intend to ... explain that unless we pull together, various people are going to hang separately."

Reliability, punctuality and overall quality had deteriorated among too many of the companies. "If they continue to produce an appalling performance ... there will be no future for them in the railway industry," he said on BBC television.

Mr Reid also told Railtrack he was considering altering the way it received its subsidy. It receives pounds 1.6bn through the train companies, and the minister said the Government may find a way of "having more direct leverage over Railtrack", which could mean passing the subsidy directly to the company in exchange for specific performance targets.

There may be another summit in the new year, to which the public may be invited, followed by annual meetings between ministers and railway bosses. Gwyneth Dunwoody, chairman of the Commons Select Transport Committee, said Railtrack should be reminded it was "not a property company but actually running a railway service".

"I know what I would do: I would be banging their heads together so hard they would ring all around the railway system. We are sitting on a volcano and the volcano may not erupt in the next 12 months, it may be the next 24 months, but ministers know there's an urgency about the need not only to patch up but redo the system so that it works for the benefit of the passenger," she said.

Gerald Corbett, Railtrack's chief executive, said it had delivered improved performance and said its co-operation on schemes such as the Channel tunnel rail link and London Underground could be jeopardised. "If there was that kind of control we would lose the support of the financial markets and we would find it harder ... to raise the sort of money required."

At Thursday's meeting, Mr Prescott is likely to give more details of how the railways will be run under the Strategic Railway Authority, the new body that will subsume the roles of the Franchising Director, Rail Regulator and British Railways Board. The Franchising Director, John O'Brien, who will also be at the meeting, hit the headlines when a letter he wrote to Railtrack complaining about their contribution to problems on the London- Berkhamsted line was leaked to the media.

The latest figures published by his office showed reliability and punctuality both worsened on average in the period from June to September.