AS I SEE IT: Nicola Sturgeon is promising a better ScotRail. So, how is she going to pay for it, asks TERRY MURDEN
A new era, or maybe that should be a ‘return to an old era’, beckons for Scotland’s railways as the trains revert to public ownership for the first time in 25 years. The First Minister, as the latest Fat Controller of ScotRail, is promising to deliver a service that will be rid of the problems of the past and will be more reliable and, of course, greener. Given the Scottish government’s record of intervention in renewables, steel and aviation, we should not be holding our breath.
Everyone wants a cheaper, more punctual railway. It has been the holy grail of operators since Stephenson fired up the Rocket. A perfectly-run railway is not easy to find unless, of course, you are prepared to pay for it. And this is where many of the arguments get lost in a fog of hope over expectation.
Speaking at a ceremony at Queen Street station in Glasgow to signal the change of owner, Nicola Sturgeon announced: “This new beginning creates a real opportunity to deliver a railway which is for the nation, and fully focused on being run for the benefit of its users – customers, staff and stakeholders, as opposed to shareholders.”
Those last few words – the demonising of shareholders – say a lot about a failure to understand how companies are financed and, in the case of the railways, how they are forced by the financing system to work with, and not against, the public sector.
Blaming shareholders for all that is wrong with train operating companies is the regular mantra of the trade unions. Ms Sturgeon now joins that chorus with a belief that, by doing so, she has the workers on her side and that a workforce liberated from greedy shareholders will be able to fulfil everyone’s desire to make the trains run more efficiently.
In fact it is a rare shareholder who wants the company in which they invest their money to run inefficiently and to lose money. All those I have come across demand the companies they own are run well, attract more customers and make more profit that can be re-invested in making them even better. Everyone wins.
Ms Sturgeon has called for a “national conversation” on how to improve the railways. So far, there has been an inevitable call for cheaper fares – including a reversal of the recent 3.8% increase – more discounts for younger people, reopening of ticket offices, more on-train staff to provide improved security, and the reinstatement of closed lines.
These are laudable ambitions. But they come at a price.
Travel on Britain’s trains is undeniably more expensive than in many other countries and is regarded as uncompetitive with buses. One caller to a radio phone-in said she had taken a bus from Glasgow to Aberdeen for £1 to avoid a £93 rail ticket. No wonder many passengers are giving trains a miss.
However, the pricing is not imposed solely by avaricious private companies and shareholders but has been pre-determined by the support, or lack of support, they get from government. In countries such as Italy, personal taxes are higher to help keep rail fares down. We have done the opposite. It is a political, not a commercial decision.
Apart from high fares, passengers, and would-be passengers, get frustrated by the unreliability of the service, even though in its final months Abellio has improved performance. This may be partly because much of the disruptive work on improving the infrastructure has been completed.
‘In countries such as Italy, personal taxes are higher to help keep rail fares down. We have done the opposite. It is a political, not a commercial decision’
We will never know if this improvement in punctuality would have continued under the Dutch state-owned company. But we do know that punctuality improves when there is less pressure on the network. Since privatisation in 1993 passenger numbers have doubled. Simply by forcing more trains on to a network largely built by and for the Victorians has created a timetabling nightmare. One broken down train can create a huge ripple of delays.
With Covid causing passenger numbers to fall, trains have run less frequently but also with less likelihood that anything will get in the way of arriving on time. That has enabled them to improve punctuality.
This leads us back to the revenue and pricing debate. With ScotRail operating at 60% of its pre-pandemic capacity it is facing a parallel fall in income, and the scope for a corresponding reduction in fares is thereby diminished.
It has not been clear if Abellio actually paid a dividend to its Dutch state owner, but as we can no longer blame it for any shortfall in revenue we will have to find other means to plug the gap, or else operate a smaller service.
The Liberal Democrats are leading calls for the recent increase in fares to be be scrapped, ticketing discounts to be extended, and more lines to be opened.
I didn’t see any reference in party transport spokeswoman Jill Reilly’s demands that money to pay for these initiatives should be diverted from other already-stretched budgets or that there should be an increase in taxation.
Politicians and the public may demand a more reliable and cheaper rail service, but they are less willing to accept that either the taxpayer or the passenger now has to pay for it.
tmurden@dailybusinessgroup.co.uk
Terry Murden held senior positions at The Sunday Times, The Scotsman, Scotland on Sunday and The Northern Echo and is now editor of Daily Business
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