Challenges for Scotland: freedom for the railways

Challenges for Scotland: freedom for the railways

by Marcus Buist
article from Monday 24, November, 2014

HURRAH! In case you missed it in the run-up to the referendum, First ScotRail is gone at last. Better yet, a far superior Dutch company has won the bid to take over the network and improve services. Let us be clear, this is not enough.  The railways saga brings to mind an episode of Spitting Image from 1987 in which the cabinet of the day is seen discussing the continuing problems of recently denationalised British Telecom. With a bored sigh, Thatcher explains “Well we clearly didn’t privatise it enough”, to which Douglas Hurd, the supposed lefty voice of reason questions, “So, if something is particularly useless, you're saying we have to privatise it twice!” 

Obviously, I regard privatisation as one of the great successes of the Thatcher government, and something that future reforming governments should seek to push forward.  Even John Major’s rail privatisation, though often mocked, has had its successes. Delays are markedly less frequent, the long decline in passenger numbers in the nationalised service has been reversed, and safety and maintenance standards are much improved. British Rail had always been the most expensive, most subsidised, most heavily loss-making rail operator in Europe; that the Beeching axe fell hard was unsurprisingly in a nationalised network rotten at the core. 

Despite this, private railways in Britain, and in Scotland in particular, have a poor reputation. Rail services across the UK are heavily subsidised masking their real price from consumers who then pay indirectly through taxation. While it might be reasonable to assume that higher subsidies would result in lower fares and therefore greater access, our prices are simultaneously the highest in Europe. As a student, I am well aware that a single trip from St Andrews to my home in Perth can take up an entire month’s travel allowance.  ScotRail customers suffer more than high costs; our carriages are old-fashioned, our journeys slow, the seats uncomfortable, aisles cramped and the toilets dirty. 

The solution is emphatically not more socialism. To return to the sketch, the problem is that the privatisation of Britain’s railways was botched and needs to be done over. Franchising without the possibility of competition makes a mockery of the free market, and is in effect the granting of a monopoly to firms that promise to squeeze most out of commuters. The temporary nature of the franchise makes matters worse, disincentivising continuous investment in improving rolling stock and stations. A degree of permanence is needed in order to ensure firms have reason to invest over periods longer than five or ten years. 

Though the product of an EU directive, the practice of separating the rolling stock from the rail operator has also proved to be misguided. Unlike road transport, trains are not so easily separated from the track. Reuniting these while remaining a member of the EU will be difficult, but as directives offer a degree of flexibility, this should not prove impossible. When operators have a commitment to their line through permanent ownership, we can reasonably expect them to invest beyond the lowest requirements of state regulation. Network Rail is concerned with its own pension liabilities and not the profitability or comforts of the routes it is charged with maintaining; privately owned rail networks will behave rather differently. For Scotland, increasing capacity on our overcrowded intercity lines, and increasing the speeds at which locomotives can travel, ought to be the immediate priorities for investment. 

It is not surprising that the structure of railway management should be critical to unlocking the potential of the anaesthetised giant of transport. The most important two steps, however, must be the compulsory stipulation of open access at peak and off-peak times, and the end to subsidies. Without subsidies, the pressure to improve productivity and to cut costs will become an imperative to operators looking to freeload on the gullibility of our representatives. With open access, the sum total of rolling stock will be increased, while evidence from the UK east coast main line suggests that fares will fall, too.   At the very least, we should commit to open access on the basis of choice for consumers fed up with the state sanctioned provider. Apart from paying a standard fee to the main operator and owner of the network, competing providers ought to be free to charge as they will, offering different varieties of services based on local conditions. As this works successfully for air transport, it ought to bring benefit to our railways.  

To recap, rail is important, and privatisation made it better, but the state still plays far too great a role. The first step is to unite both train and track across the UK, portioning the network into four key areas modelled on the areas covered by LNER, GWR, LMS and SR, with some routes being owned in common or by a public trust. This would mean an end to franchising, and future interference, with a simple auction or negotiated offer deciding ownership and further mergers prohibited. Balancing the power of the new “Big Four” would be dozens of smaller competing firms, entitled to access the line at no more than cost price, these would keep quality up, fares down, and investment in primary rolling stock high.  No more corporate welfare, no subsidies used to fund dividend payments, no high speed rail funded at taxpayer’s expense, nor Border’s Rail to stuff the ballot boxes of canny politicians. Instead, rail needs a new future that is not merely private, but independent and free. This must be a service owned by the people and run for the people, not by and for the state. 



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