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I was the Head of Policy and Public Affairs at UNISON Scotland until my retirement in September 2018. I now work on several policy development projects, so all views are very definitely my own. You can also follow me on Twitter. I hope you find this blog interesting and I would welcome your comments.

Wednesday, 7 November 2018

Let's make this the last major anniversary of rail privatisation

This week marks the 25th anniversary of the legislation that privatised British Rail into a complex series of franchise arrangements. 

This is not an anniversary to celebrate. As Aslef’s Scottish Organiser Kevin Lindsay said; 

“Today is the 25th Anniversary of the great railway rip off, when John Majors Tory government rushed through the unnecessary, unwanted and plainly unworkable rail privatisation. It’s time for the UK and Scottish governments to take action and to return the railway to public ownership.”

Sadly, neither government appears to be heeding that call, which is supported by the other rail unions. A call that comes from the people who represent the workers who really understand the railway. The editorial in this month’s ‘Modern Railways’ paraphrases the Joni Mitchell song to say that the government has:

Looked at the railways from both sides now
From win and lose and still somehow
It’s life’s illusions they recall
They really don’t know railways at all.

The Scottish Government has the power to end this franchise early by using the break clause in 2020 which would see the franchise end in 2022. However, in a recent letter to the public sector bid stakeholder reference group, Transport Secretary Michael Matheson said he “fully expects the current franchise to continue to its planned expiry date of 2025”. 

The UK Government has commissioned the Williams Review - the Transport Secretary’s response to the fiasco of the May timetable changes. As the interim Glaister report concluded, ‘Nobody took charge’ – a clear recognition of the damage fragmentation has caused. The review will look at the ‘most appropriate organisational and commercial framework for the sector’.  

The timetable for the review is as slow as our privatised railway – steam trains were quicker on some routes! (an excellent solution in my personal view 😊  – with CCS of course!). A white paper next autumn and an unlikely implementation ‘from 2020’, which points to a few cosmetic changes. There have been 30 such railway reviews since 2007. 

So how are our railways doing?

There was a small 3% increase in freight traffic last quarter, but that was mostly down to an increase in coal traffic caused by a spike in gas prices. Hardly a sustainable future for freight. Some innovative work is being done on promoting rail for log transport in Scotland and sidings for timber boards and mineral water, but overall there are few signs of a significant shift to rail freight. For example, the lack of long crossover loops on the Inverness line makes rail 30% less efficient than it should be. We should remember that rail generates around 30% of C02 emissions of road haulage per equivalent journey, nearly 90% less small particulate matter (PM10) and up to fifteen times less nitrogen oxide (NOx). 

Passenger demand for rail remains strong. 23.9m journeys were made on ScotRail in the last reported quarter, up 1.5%. Passenger journeys increased 3.1% nationally last quarter, despite the timetable issues, possibly driven by a 15% increase in the price of car fuel.
Scotrail’s poor performance is rarely out of the news with punctuality reaching breach level for the last two reporting periods and significant fines. Their management of rolling stock has been equally shambolic, with the new Hitachi trains delivered 10 months late and their new refurbished High Speed Trains expected to be introduced without Controlled Emissions Tanks, meaning effluence will be discharged directly on to the tracks. While services have plummeted, fares have spiralled. As of next year, commuters will be paying 10% more for their ticket than they did at the start of the franchise. 

In parts of the industry, Scotland’s attempts at integrating trains and track through the ScotRail Alliance is seen as a move in the right direction, if not quite a template. However, all is not well at senior levels as reported in today’s Scotsman. They report one industry source saying: “There is a lot of discomfort about how much control of the railway has been handed to the train operator [ScotRail].”

It does at least highlight one of the benefits of devolution and the Scottish Government is calling for the devolution of Network Rail. There is certainly a case for that, although integration requires more than just trains and track and this focus on powers avoids the bigger issues.

Which leaves us with the question of ownership. 

Many industry figures argue that only when you have created a working railway network should you consider ownership. I don’t dispute the importance of structure, but the idea that this can be done without addressing ownership and accountability is fanciful. We have the ludicrous situation where the majority of our railways are in foreign state ownership, sending profits back to support their domestic rail operations. We should also recognise the impact the short-term profit motive has on the management of any service. Management culture and accountability is an important issue that the ‘structure before ownership’ lobby ignores.

The TSSA/Common Weal report is a useful starting point for a debate on the merits and methodology of creating a publicly run railway in Scotland. There are some legislative barriers that could be circumvented to avoid a franchise bidding process, although that would be complex and legally challenging. Labour’s commitment to bringing railways into public ownership across the UK, provides the best platform to take this forward and that should include a discussion about further devolution. A policy that the polls show has widespread public support.

And then, inevitably, there is Brexit. Current EU rules would not allow a future Labour government to reinstate a national rail monopoly. The EU Commission’s Fourth Railway Package would astonishingly foist the UK model on the rest of the EU. There are also problems with EU Single Market rules on procurement and State Aid, which Mick Whelan of Aslef has outlined in the Scotsman and Scottish Left Review. 

Others argue that there are ways of introducing greater public ownership within EU rules as is done in Spain, Netherlands, Germany and Italy – using separate state-owned companies. Although even this retains the market framework. 

While more work is needed on the detailed structure and Brexit implications, the direction of travel towards an integrated railway under public ownership should be clear. Mick Whelan sums up the case this anniversary week when he said; 

“Privatisation has, demonstrably, failed to deliver. Fares have soared, rolling stock got older, and our trains are more crowded. Private companies talk about investment and risk. But there is no private investment – the money for investment comes from the taxpayer – and there is no risk because the companies hand back the keys when they can’t make the profits they want.”

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