The big debate on the future of our railways

GET ready for the next great political debate of 2016: should our railways be re-nationalised? While cheaper fares, more reliable services and a fairer deal for taxpayers was once the rallying cry behind privatisation of the railways, 20 years on the debate has gone full circle and the same promises are being made today by fans of re-nationalisation.

The news calls for re-nationalisation come against a looming 1.9 per cent hike in regulated train fares, in line with Retail Price inflation, which will see an annual season ticket between Glasgow and Edinburgh increase by around £71, to £3,819, from January.

“Anytime” singles and returns – which allow commuters to travel at peak time or any other time – will also be hit while, in Scotland, off-peak singles and returns will be capped at a one per cent hike under the terms of the Abellio ScotRail franchise. All other fares are set by the operator.

Action for Rail, an umbrella body for rail unions campaigning for public ownership, says rail fares have risen at double the speed of wages in the past six years – 25 per cent compared to 12 per cent – while the dividends paid to rail company shareholders have increased by 21 per cent over the same period, to £222 million.

The campaign is also highlighting the number of cancelled or cut services, overcrowded carriages and fewer ticket offices, and says commuters are “paying more and getting less”. Organisers say profit is being put before people.

The question is: would nationalisation reverse any of that?

In Scotland, both Scottish Labour and the Greens want ScotRail returned to public hands when the existing franchise expires in 2025, while the SNP has vowed to use its enhanced devolved powers to allow Scottish public sector bodies to bid for the ScotRail franchise.

This limited form of national ownership is the closest Scotland can get without independence since our railway infrastructure – from tracks and signalling equipment to its busiest stations, Glasgow Central and Edinburgh Waverley – would continue to be owned and managed by Network Rail, a UK Government quango.

The entire ScotRail fleet would also continue to be owned and leased by a handful of private rolling stock companies (Roscos) – a legacy of British Rail – who are in turn owned by overseas venture capital firms and pension funds from Australia to Hong Kong. The arrangement costs Scottish taxpayers some £86m a year.

Neil Bibby, Scottish Labour’s transport spokesman, said public ownership means reinvesting passenger profits in the railway.

He said: “Right now we have a government-owned company running our railways. It just happens to be owned by the government of the Netherlands, instead of our own. Before that, the ScotRail franchise had gone to the First Group and money flowed straight from taxpayers and passengers to shareholders.”

Passenger satisfaction with ScotRail is above average for the UK, with 87 per cent of travellers content with the service. However, value-for-money satisfaction dips to 59 per cent and only 76 per cent said they had enough room to sit or stand.

In Scotland, passenger journeys are at a record 93 million, up 35 per cent in 10 years, but with increases in rolling stock lagging far behind, overcrowding has become an increasing issue, with just one new seat for every 3,300 extra passenger journeys over the decade.

The Scottish Government argues that Scotland’s railways are already receiving record public investment, funding the new Borders Railway, major electrification schemes such as the Edinburgh-Glasgow Improvement Project, station improvements including the pending overhaul of Glasgow Queen Street Station, and 70 brand new trains from 2017.

Transport Minister Humza Yousaf said: “Over the past 10 years, we have seen a revival of Scotland’s railways. This transformative programme of improvements to the rail infrastructure is making up for decades of underinvestment, the success of which is evidenced by record passenger numbers.”

Unsurprisingly, nationalisation versus privatisation is far from black and white. To an ordinary commuter, it seems bewildering. Train operators are funded by both income from fares and taxpayer subsidy, but must pay track access fees to Network Rail to use the railway. However, Network Rail – underwritten by the public purse – is also liable to pay rebates to the operators if faults on the railway infrastructure, such as points and signalling failures, cause delays.

Trains meanwhile are leased at cost to taxpayers, while the operator – in ScotRail’s case, Abellio – is responsible for maintenance and repair.

Tom Rye, director of the Transport Research Institute in Edinburgh, said competition has brought about “very cheap fares” for passengers if they are prepared to book well in advance and travel off-peak, as well as increased service frequency.

Since privatisation, London-Glasgow trains have doubled in frequency from every two hours to hourly and London-Edinburgh will soon be running every half-hour. Private train companies are incentivised to increase passenger numbers because this is the most effective means to boost profits, and the quickest way to attract more passengers is with more services, faster line-speeds and new trains.

However, Rye said he can understand calls for renationalisation, describing the British model as “very inefficient and very costly” compared to Sweden or Germany.

For example, the taxpayer subsidy for ScotRail services was around 18p per passenger kilometre in 2013/14 – around £7 per trip. In Sweden, it is 5p per kilometre, yet the fares are cheaper too.

Rye said: “In Sweden, it’s effectively their equivalent of Transport Scotland that directly owns, maintains and upgrades the rail infrastructure

Over the past 10 years, we have seen a revival of Scotland’s railways. This transformative programme is making up for decades of underinvestment

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