Rail 802: What the EU has done for us

A couple of issues ago,  I speculated about the possible impact of Brexit on HS2, suggesting it was probably the only way that the scheme could end up being shelved or scrapped.  That did not, as I stressed, turn me into an Outer as I firmly believe that the European Union is more of a good thing than a bad one, crucially in the area of keeping peace in Europe for the past 70 years.

Moreover , since writing the column, I have become rather more optimistic about the chances of victory for the Inners since much of what has come out of the Leave camp has bordered on the insane, especially from its chief cheerleader Boris Johnson. However, politics is pretty unpredictable at the moment across the world – witness the success of such different characters as Jeremy Corbyn, Donald Trump and Marine Le Pen. It is therefore, worth examining what Brexit would mean for the railways.

This is not easy to work out as various claims have been made for the influence of the European Union on the railways which are not borne out in fact, and because predicting precisely what decisions would be made following a Leave vote is no easy matter. However, first consider what Europe has done for the railways so far. The key influence has been the insistence that, when the railways were privatised, the infrastructure should be separated from the operations.

This was actually a bit of a con. The Tories insisted during the privatisation process that the two main components of the railway had to be completely separate in order to encourage open access operators. However, as I wrote in my book Broken Rails, the story of rail privatisation, ‘the separation needed only to be an accounting mechanism and the sole open-access operators who had to be accommodated were international freight ventures and not, as the Tories implied, any Tom, Dick and Harry who fancied running a railway’.  The proof, of course, is that other European nations, such as France and Germany, have managed to keep both infrastructure and operations in public hands and pretty much still under the direct control of their state railways.

This could change, though. The relationship between the railways and the EU has been governed by a series of ‘railway packages’ which purport to improve train services across the Community. The first package dealt with the initial accounting separation as mentioned above while the second focused on ‘revitalising the railways through the rapid construction of an integrated European railway area’. In fact, that has been pretty much a failure. The number of cross border trains, especially sleepers, has actually fallen mostly because of the high cost of track access charges imposed on operators from other countries using foreign rails and the failure to address bureaucratic issues, such as forcing operators to change locomotives at borders.  The second package, passed in 2004, tried to liberalize freight and speed up the technological integration of the continent’s railway technology, but again progress has been slow as demonstrated by the plethora of systems still in use and the huge difficulties of implementing a new in cab signalling system, ETCS, the European Train Control System (try reading the Wikipedia page on it and anyone who can make sense of it, write to me!).

The third package, passed three years later,  opened up open access rights for international rail passenger services and a European train driving licence but again this has not resulted in much change on the ground. Indeed, cross border services have, as mentioned above, continued to decline and in practice drivers still require specific training to cross borders – a contact of mine is being paid for a year by Eurostar while he learns French. A few basic passenger rights, such as not discriminating against disabled people, were thrown in but a wider compensation package for delays was rejected after the rail companies argued that it would be too onerous and result in higher fares.

The fourth package, currently awaiting approval from the European Parliament, is an attempt to further entrench competition by forcing railways to put all their services out to tender by January 2019. However, it is unclear whether there will be any derogations and already attempts to further entrench separation between operators and infrastructure managers have been watered down after fierce opposition from the French and German railways. Now, rather than requiring the two to be completely separate businesses, they will be able to be owned by a single holding company.

Underlying all this, there have been two main related themes. The European Commission has an intense dislike of the state run railways which it sees as inefficient monopolies. This is by no means an unfair criticism. Many state-run railways across the Continent, especially in the former Communist countries of Eastern Europe, have been fantastically inefficient and have failed to modernise or take advantage of the opportunity which congested and often inadequate roads offer them. However, it is also fair to stress that the EU has by no means been an unequivocally pro-railway force. Quite the opposite.  It has tended to take the view that mobility per se is a good thing and has in no way sufficiently stressed the environmental advantages of railways. Therefore it has funded huge road projects even where there is a rail alternative. A reader recently wrote to me about a project funded by the EU with more than £500m to build a motorway through the stunning and unique Kresna Valley in Bulgaria, even though there is a parallel rail line which has been allowed to deteriorate through lack of investment.

The other theme is to encourage competition. The EU is obsessed with stimulating competition and again that is partly motivated by the dissatisfaction with state owned railways. The whole project of separating the infrastructure from operations was born out of a desire to stimulate rival companies into competing against one another, principally as a challenge to the entrenched state railways. In the UK, however, given that the railways have been privatised and there is a measure of open access,  the impact of further legislation will be limited  (although Northern Ireland, state run and integrated may be forced down a different path unless its special circumstances can earn a derogation).

As a result of this emphasis on competition in the fourth railway package, the two main rail unions, the RMT and ASLEF, have come out for Brexit (although the TSSA supports Remain), but, in fact, much of what they argue against has already happened in the UK which is far further down the line of privatisation and the encouragement of competition in its railways than any of its European counterparts. Brexit therefore would make little difference to the railways although a future Labour government might have a bit more leeway in reversing some of the emphasis on competition enshrined in European legislation.

Two caveats, however. First, as I mentioned two issues ago, the future of HS2 might be more uncertain if there is a Leave vote. Secondly, the general chaos that would arise from Brexit could lead to all kinds of unexpected consequences. My view is that no one has any idea of what will happen if the electorate plump for Brexit except that there will be a long period of uncertainty which is bound to be damaging to the economy and consequently to the railway. So to keep us on the train, vote Remain!

 

 

French sleepers battle

 

A good example of the way that breaking up the railway to highlight the supposed costs, in line with the EU’s emphasis on separating track and infrastructure, can lead to damaging side effects is the announcement by SNCF, the French state owned railway, that it wants to find an operator for the bulk of its sleeper trains or else it will close them.

I have made use of these on numerous occasions to reach ski resorts in the alps. You can leave London on an afternoon Eurostar, have a steak frites in Paris and be on the slopes by 10am. Sure, the rolling stock is quite old and the toilets basic, but they provide a wonderful service and are very heavily patronised with literally thousands of people leaving Paris on a Friday night. They are far more environmentally friendly than the alternatives of flight or car  but SNCF is arguing that they are uneconomic, claiming they need a subsidy of 100 euros per passenger.

This is a typical lack of holistic thinking and comes down to a narrow view of railway economics. SNCF is arguing that it is the high track access charges that require this subsidy but Mark Smith, the Man at Seat 61, says this is the wrong way to calculate the costs: ‘If these trains are discontinued the industry as a whole doesn’t escape the track charges. These are non-escapable costs and shouldn’t really be included as a cost for running the train. The track access costs for signalling, maintenance and staff remain exactly the same in total, so there isn’t actually going to be any saving’. He reckons the only real costs are the driver, guard, and other staff, the power – and bed linen!

SNCF has already  downgraded the service, scrapping the first class where people had just two berths in their compartment, which cut out lucrative high paying passengers.  Now it wants to kill them off, the kind of tactic reminiscent of British Rail. There is a petition online to save these services which you can find at https://www.change.org/p/sncf-save-the-french-sleeper-trains .

 

  • RapidAssistant

    Politicians of both major colours have always hid behind the EU competition rules to justify keeping the franchising system whenever it’s been questioned; now that we going to Brexit where does that leave things? – in my opinion this was always a classic case of the Tories (and New Labour, for that matter…) cherry picking the bits of the EU that suited their neo-liberal agenda.

    My hunch is don’t bet on anything changing soon.

  • CorBlimeyJerkin

    Sleepers,
    Perhaps you didn’t know, but City Night Line, subsidiary of Deutsch Bahn has beaten the French to it, already having announced the termination of its sleeper services between Northern Germany and Switzerland at the coming timetable change in December.
    One can only sympathise with DB’s management having to face up to the low cost airlines and the effect of their own high speed trains.

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