Rail 755: Scotland – what will independence mean for the railways?

Here’s an irony. Just as Scotland is voting to break off from England with the possibility of needing a a passport to travel between the two countries, the Scottish sleeper services between the two are about to be greatly upgraded.

The prospect for the old sleeper services is indeed an exciting one. I have used them numerous times over the years and while I enjoy them enormously, there is no doubt that have address a 20th century feel to them. The trains are old, there is a slight grubby atmosphere – despite the attentions of the mostly excellent staff – and more often than not I seem to be sleeping over a wheel flat.

Therefore although Serco has promised new trains for 2018, in the meantime the company has promised that in April when it takes over the franchise from FirstGroup (it was previously part of the Scotrail contract but will in future be separate) it will give the trains a ‘deep clean’ and the company will embark on a major marketing initiative. That is a slightly risky idea if one remembers what happened to Virgin when it took over West Coast, but Serco will also try to ensure there are immediate service improvements such as allowing people on the trains earlier and enabling them to book prior to the normal 12 week window, which currentlyrather discourages foreign tourists on trips planned well in advance from using the trains.

Then in 2018, when the new trains arrive, Serco promises a completely different type of service. In another piece of irony, the purchase of the trains, reckoned to cost around £100m, was largely funded by the UK government as the result of a promise made in the Budget two years ago by George Osborne (shame they can’t bring back the old luxurious trains that were earmarked for Cross Channel services using the tunnel which were never brought into service in the UK but instead sent off to Canada). There will be four different levels of service and the top one will include en suite toilet and shower. There are even discussions about stopping off at various other places, perhaps even in England, to offer a sleeper service to new destinations.

However, independence would put rather a spoke in the wheels of these plans. It could, for example, greatly damp down demand for travel between the two countries as traditional links are severed. Even if that is not the case, it will undoubtedly add great complexity to the arrangements as the whole SNP plan for creating an independent Scotland is fraught with difficult issues.

The Scottish Government issued a document earlier this year setting out the implications of independence which included a section on the railways. In fact, the Scottish government already has a great measure of control over the country’s railways and it is since devolution that line reopenings have proceeded much faster than before. This is put down by one Scottish source as ‘the fact that the Scottish government was able to devote time and resources to examining properly the case for reopenings, something that would not have happened if power had remained in Westminster’.

Transport Scotland, a government agency, is in charge of the Scotrail franchise and is in the process of letting a new 10 year contract starting in April, with a possible five year extension. Already five bidders, including the incumbent First (who are not favourites by any means) have been shortlisted and the Scottish government has said that a vote for independence will not stop the process.

So, initially there will be no change. However, the government’s statement does suggest some changes in the longer term. In particular it argues that ‘the current franchise model is unnecessarily constrained by the limits imposed by UK legislation. In the future, an independent Scotland will be free to pursue legislation that enabled alternative approaches, including public-supported and not-for-profit models. ‘ This is a rather strange statement since, in practice, there is nothing at the moment to stop the Scottish government looking at different ways of letting its franchise. However, this is politics, not common sense.

ASLEF, the trade union, has expressed concerns over the implications. In a statement, it questioned what would happen to cross border services, operated by Virgin, East Coast, CrossCountry and TransPennine. It is a good question. There is no doubt that operating in two separate legislative administrations would pose complexity and, indeed, cost on the industry. Moreover, political decisions come into play. Such services, particularly the more local ones, are highly subsidised, and the UK government may decided to cut back on them if they are mainly use by citizens from north of the border.

ASLEF raises a good example: ‘London to Preston is extremely profitable. This allows the line north of Preston which is not profitable to rely on profit from the rest of the line leading to a smaller state subsidy. If the profitable section of this line resides in England with the loss making line in Scotland, will the Scottish taxpayers be required to pay a high subsidy to the franchise owner?’ Gosh I can already imagine the headaches for the civil servants and politicians that such questions will pose. ASLEF points out that this could mean that Scottish people are paying out great subsidies for a service they have no necessarily specified. And so on.

The Scottish government has ambitious plans to improve its rail service. The SNP has been quite supportive of rail, though more recently it seems to be veering towards greater spending on roads. At the moment, however, uncertainty prevails. It would be great shame if the rail improvements of recent times north of the border and the the wonderful service being promised by Serco were jeopardised by a vote for independence.

And worse, what if passengers on the sleepers have their nights ruined by officious customs officers shaking them awake. Gestapo style, in the middle of the night to demand their passports? Not likely, agreed, as my bet is that the ‘Better Together’ campaign will prevail, but you never know. And I bet Serco did not factor that possibility into its bid.

 

Labour still in limbo over franchising

With various leaks and statements, it seemed that Labour’s plans for rail franchising, should the party win next year’s election, had been settled. The treasury team led by Ed balls was wary of any commitment to take the franchises back in house as they ran out, worrying that this would be seen as ‘anti-business’ which in this day and age is tantamount, apparently, to a death sentence for any political party.

However, the party activists were keen to push this through gradual renationalisation and baulked at the compromise of merely allowing a state owned in house organisation to bid for any franchises that came up. This, as I have argued too, was seen as the worst of all worlds, angering the private sector, causing the government extra expense in drawing up bids and probably resulting in the status quo since the private operators would be very keen to see off a state owned company.

The issue needed to be resolved at the party’s policy forum in Milton Keynes in July so that it could shape the contents of the manifesto. And to the outside world it seemed matters had indeed been settled with victory for Balls.

Not so. While, yes, the idea of having a state-owned bidder was agreed, the policy forum’s deliberations – or rather frantic talks in a van in the car park of the hall where the meeting was taking place between unions and senior Labour party officials – resulted in yet another compromise. Shadow ministers also had to agree that ‘we need to end the presumption against the public sector” in official documents and that there would be a ‘review of the failed franchising process’. There would also be ‘an end to the fare- setting powers of the operators’ but this rather belies the fact that the government sets the regulated fares and that there will be a high cost in taking away any power of the operators to set fares on their own trains – would every advanced fare, for example, have to be set by the government. As I said in the adjoining piece, this is politics not common sense!

There was also confusion over what was meant by the promise that Labour would set up a new rail authority to take control of rolling stock- I doubt very much if there is any plan to spend billions in buying it back off the rolling stock companies.

What this means if Labour is in power – or sharing it in a coalition – therefore remains unclear. It was a classic fudge and I suspect it is a recipe for yet more fraught discussions, possibly in Downing Street rather than a van in a Milton Keynes car park, after May 2015. It will doubtless give this column plenty to write about.

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