Kevin Lindsay shows that both the social and economic case for the full renationalisation of the rail network stack up. But which political party will take a lead?
David Cameron’s often-mentioned desire to strengthen his party’s relationship with Scotland will not have been helped by money-saving proposals to axe a number of direct rail links between London and Scotland. Plans to cut services on the state controlled East Coast Main line will result in direct services between Glasgow Central and Kings Cross station in London being reduced from thirteen a day to just two. These latest cuts which have been strongly opposed by ASLEF follow money-saving proposals to axe the direct rail link between London and Aberdeen. The DfT has so far been one of the biggest losers in the savage round of cuts that followed the General election, facing reductions of £683 m, or 4.6 per cent of its total. Further announcements of cuts to specific projects are anticipated following the Comprehensive Spending Review in October.
Scotland is additionally facing the prospect of losing more than direct cross-border services. Infrastructure plans to upgrade lines and replace slow diesel trains with faster electric models were put on hold in February following a report by former Audit Commission Chairman Sir Andrew Foster who claimed that halting electrification at Edinburgh, requiring passengers who want to travel further north to change to slower local services, would save tens of millions of pounds. His report stated that ‘some significant long-distance destinations (Aberdeen and Inverness) are served by lines which are not, and may never be, electrified and therefore require diesel propulsion’. Such routes would best be served by ‘high quality connecting trains rather than through services’. Foster’s proposal would certainly save on capital costs but is likely to prove something of a false economy. Not just for the cities losing a direct rail-link to London but for the whole of Scotland. History has proved that any government that disinvests in transport infrastructure will inflict long-term damage on its economy.
After failing to increase their tally of just one MP in Scotland, Westminster Conservatives might see Scotland as a soft target for swingeing cuts, a perception that has the potential to seriously damage their junior coalition partners, the Liberal Democrats who currently hold 11 Westminster seats in Scotland, including the Inverness seat of Chief Secretary to the Treasury, Danny Alexander. In fact Con-Dem transport policy for Scotland is likely to harm not only passengers, but the entire country. A survey published in August which looked into the impact of economic activity found, to no one’s great surprise, that investing in rail produces a better return than investing in any other sector for which the government is a major provider. In fact £2.20 of wealth is generated for every £1 spent, which compares particularly favourably with investment in the banking and finance sectors. At a time of economic uncertainty the most obvious course of action is to invest where medium and long-term profits can best be achieved. Any cutbacks to rail services, in Scotland as well as in the rest of the UK can be seen as a betrayal of Conservative and Liberal Democrat election manifesto commitments to fully support business while ensuring that public transport continues to provide for those who most need it.
The Scottish government has so far taken a different approach to Westminster in giving the go-ahead to the electrification of the 200 miles of track between (and immediately around) Edinburgh and Glasgow at a cost of £1 billion. The funding of the scheme through Network Rail, which uses the rail track as collateral and is able to obtain low rates of interest because loans are underwritten by the UK Government, means that any savings to be made from cancellation of the scheme would have been relatively small. At the same time the DfT in England has postponed two schemes funded by the same mechanism: the electrification of the Great Western Main Line between London and Wales, which it described last year as of vital national strategic importance to both England and Wales, and the line between Liverpool and Manchester, which would enable electric trains to operate between Manchester and the West Coast Main Line services to Glasgow and Edinburgh. In Scotland, the decision to go ahead coincides with economic forecasts of slow or negative economic growth resulting in higher than anticipated high job losses. All of which requires much deeper cuts elsewhere to compensate, such as the cancellation by the SNP government in Scotland of the Glasgow Airport Rail link which would have created 1300 jobs at a time when they are desperately needed and significantly enhanced existing infrastructure in time for the city to host the Commonwealth Games. The cancellation of GARL was a short-sighted decision which leaves Scotland without rail links to any of its major airports and will undoubtedly lead to an increase in road traffic, meaning increased congestion and carbon emissions.
In fact the Fraser of Allander Institute at Strathclyde University warned in August that the risk of a second recession in Scotland had been considerably increased by the fiscal consolidation package in the Con-Dem coalition’s post-election emergency Budget. The warning was based on the impact of a 14 per-cent real terms reduction in the Scottish budget by 2014/15, equivalent to the loss of between £4bn and £4.5bn a year, calculations based on the continuance of the Barnett formula. If that were to be changed to adopt the proposals of the Calman Commission, with the Scottish budget based on tax receipts from north of the border, there would be an even bigger cut (an additional £500m in Scotland’s annual budget) with all that implies for major investments in infrastructure.
The cancellation of major infrastructure projects south of the border and the delay of similar projects in Scotland belies Conservative attempts to ‘decontaminate’ the party by pursuing a green transport agenda.
Promising to scrap the third runway at Heathrow and a second at Stanstead alongside a major overhaul of Air Passenger Duty is meaningless without the provision of an alternative cleaner, greener, electrified rail network. Since regaining power earlier promises to begin work ‘immediately to create a high speed rain network that connects London, Heathrow, Birmingham, Manchester, Leeds and eventually Scotland and Wales’ have not been repeated. Only time will tell whether this silence can be blamed on a lack of money or on growing resistance from Conservative-voting greenbelt residents. Either way the Conservatives are suddenly looking a lot less green than previously, and those on the left should now be mounting a concerted challenge to Tory pretensions to ‘be the greenest government in history’.
The Conservative election manifesto included several promises specific to our railways. Included among them was a commitment to ‘grant longer, more flexible franchises to incentivise private sector investment in improvements like longer trains and better stations’. What the vast majority of the rail-using public would prefer to see is trains and tracks reunited and running on time under a fully nationalised railway, both south of the border and here in Scotland, something that Scottish Labour seemed to be considering when they said in a manifesto that ‘the case for running the Scottish franchise on a not-for-profit basis needs to be fully examined as part of the preparation for the next franchise.’
Scotland would be the ideal place to try out a return to a socialist, publicly owned railway, operated for and by the people because the railway network in Scotland is largely self-contained, with more than 90 per cent of services run by one company, First Scotrail. The only exceptions are the cross-border long-distance trains operated by Virgin and East Coast Mainline. First Scotrail’s franchise, which received subsidies of £1.7bn over seven years, making it one of the most heavily subsidised franchises on the entire network, was extended until 2014 by Scottish Transport minister Stewart Stevenson without consulting MSPs, transport authorities, passenger groups or trade unions, despite an assurance given to a Scottish TUC delegation only a few weeks earlier that future decisions would be made only after ‘consultation and dialogue’. Aslef has contended that this decision was deliberately timed to pre-empt Audit Scotland’s enquiry into whether taxpayers were actually receiving value for money. Certainly Scotrail’s shareholders were.
Why not introduce a fully integrated, publicly owned operation instead? The benefits of combining track with train in a single body that exists to serve its users, rather than its shareholders are manifold and likely to provide much better value for money to a traveling public fed up with delays and fare hikes. Profits would be reinvested, allowing fares to remain stable and the need for subsidies would no longer exist. It is an operating model that has support, not just from rail unions, but from a confused and exasperated public who have seen for themselves the expensive chaos resulting from the fragmentation of the railways that followed privatisation.Despite a doubling in the revenue from ticket sales since privatisation Britain’s rail network receives an annual subsidy of more than three times what it cost to run British Rail, and in Scotland’s case you can not even claim the intended ‘benefit’ of competition. In England delays in awarding two rail franchises earlier this summer presented taxpayers with a bill of £24m, for which they received absolutely nothing in return. Further delays in re-negotiating the East Coast franchise will likely cost many more millions. At a time when Train Operating Companies’ profits continue to rise despite a recession-led drop in passenger numbers the left must amplify its demand for an end to this maddening, incomprehensible and covert system of administering the great carve-up of our railways. Having spent almost £40bn partly nationalising the banks you would think that taking our railways back into public ownership at almost zero cost would be considered a bargain the government would want to snap up. Of course there is little chance of this government doing so, but it is certainly something a newly invigorated Labour opposition should plan early for, that is if the leadership can overcome new Labour’s aversion to the ‘n’ word.
Renationalising our fragmented railway would not only be cheap to do, but has never looked more possible. Franchise operators, who owe the government millions of pounds for the right to operate trains, can not reasonably expect to continue running on an overdraft. Sooner or later we are likely to see more Train Operators default on government contracts. Rather than re-negotiate we should cancel existing obligations and instead ask for our trains back. If we do not then fares are likely to soar above inflation from next January. Transport Secretary Phil Hammond has already hinted strongly that exponential fare increases might be one way to help balance the books saying ‘This is not a normal year. The scale of the financial crisis means that we have to make some tough decisions in the spending review which concludes this autumn. I am therefore not in a position to determine next year’s fare increase’. All very different than before the election when the Liberal Democrats under the leadership of deputy prime minister Nick Clegg pledged to change the formula for pricing rail fares so that they would be pegged to RPI minus one per cent.
A clean, green railway that operates seven days a week and does not charge more than it costs to travel by car might be the only way to preserve our network, our environment and the trust of passengers. It is an objective that only a fully nationalised network can deliver.