Transport

APD Cut: A Flighty Economic Case

Stephen Richard — Tue, 07 Sep 2021 07:25:55 +0000

APD Cut: A Flighty Economic Case

Primary Author or Creator

Craig Dalzell

Stephen Richard Tue, 09/07/2021 - 08:25

Additional Author(s) / Creators

Common Weal

Alternative Published Date

April 2016

Air Departure Tax: A Post-Brexit Analysis

Stephen Richard — Tue, 07 Sep 2021 07:11:04 +0000

Air Departure Tax: A Post-Brexit Analysis

Primary Author or Creator

Craig Dalzell

Stephen Richard Tue, 09/07/2021 - 08:11

Additional Author(s) / Creators

Common Weal

Alternative Published Date

February 2017

A Public Future for Scotland’s Railways

Stephen Richard — Wed, 01 Sep 2021 12:50:53 +0000

A Public Future for Scotland’s Railways

Primary Author or Creator

Lewis Bloss

Stephen Richard Wed, 09/01/2021 - 13:50

Additional Author(s) / Creators

Common Weal

Category

Transport

Type of Resource

Policy Paper

Fast Facts

― Railways should be publicly run – Scotland’s rail system is currently structured in a complex manner, which mainly reflects the legacy of the Britain-wide privatisation experiment initiated by the Major Government’s 1993 Railways Act. For the past two decades, Scottish passenger services have been run by a succession of private and foreign state-owned train operating companies (TOCs), which in turn lease their rolling stock from privately-owned rolling stock operating companies (ROSCOs). Scottish rail infrastructure was also privatised, but is now once again publicly-owned by the UK public body Network Rail.

― Before privatisation, public ownership and operation of the railways under British Rail was far more efficient than some popular caricature suggests. Indeed, by the 1980s British Rail outstripped many of its European counterparts in these terms, despite suffering from sustained underinvestment and uncertainty regarding funding. Nowadays, the picture is reversed: the government funnel vastly increased levels of public subsidy into a rail system which has become far less efficient than others around Europe.

― The privatised British rail system is an aberration both historically and internationally. Given the dominance in the Scottish Parliament of political parties open to the principle of public operation, the railways in Scotland should not have to continue to conform to this model. Yet until recently, Holyrood has had little ability to fundamentally alter thenature of the rail system in Scotland.

― Scotrail should be taken over by a public-sector body at the earliest available opportunity – As of 2016, however, the Scottish Government can fund and entertain public-sector bids for the Scotrail franchise, presenting Holyrood with the opportunity to make a significant break from the past two decades of short termist, often dysfunctional, and dogmatic UK rail policy when the current Scotrail franchise expires. This will provisionally be in 2025, but could be as soon as 2020 (with the new operator beginning in 2022) if Abellio is judged to be failing to meet its contractual obligations.

― A publicly-owned Scotrail would be better placed to deliver beyond any specified, minimum obligations with regards to unprofitable social and environmental aspirations, and expansion to boost economic growth and activity, than current and past operators. Indeed public operation would also present an opportunity to incorporate greater responsiveness to social needs into governance structures.

― In the long-term, a permanent public-sector Scotrail should be a fundamental part of a reformed, revitalised Scottish rail network.

― The bringing about of a publicly-run Scotrail should prove the catalyst for a broader rethinking of the role our railways ought to play in Scotland’s overall long-term transport strategy. In 2017, social, economic and environmental imperatives demand that we start to think of rail travel as a fundamental public service, similar to how we see the roads at present, rather than as just another consumer product best left as the responsibility of competing private companies.

More details

1. Railways should be publicly run

• Scotland’s rail system is currently structured in a complex manner, which mainly reflects the legacy of the Britain-wide privatisation experiment initiated by the Major Government’s 1993 Railways Act. For the past two decades, Scottish passenger services have been run by a succession of private and foreign state-owned train operating companies (TOCs), which in turn lease their rolling stock from privately-owned rolling stock operating companies (ROSCOs). Scottish rail infrastructure was also privatised, but is now once again publicly-owned by the UK public body Network Rail.

• Both in Scotland and across England and Wales, the privatisation and fragmentation of the rail system has created a more expensive network which does not deliver a standard of service commensurate to its cost to passengers and the public. In particular, the periodic competitive tendering processes through which prospective TOCs bid for the Scotrail and Caledonian Sleeper franchises inhibit the effective and efficient running of the railways.

• Operators of the Scotrail franchise have made consistent annual operating profits of £10-20 million. Under the stewardship of First, the vast majority of these profits were extracted out of the rail system and distributed to shareholders; as Abellio is the international arm of the Dutch state operator Nederlandse Spoorwegen, its predictable intention is for profits made in the UK to benefit passengers of its parent firm in the Netherlands. At the same time, Scotrail is one of the most highly subsidised franchises in the UK – in 2015-16, Abellio Scotrail received £293 million in direct government funding, amounting to nearly 45.6% of its total income. The overall picture that emerges here – of consistent TOC profit obtained on the basis of vast public subsidy and limited amounts of at-risk investment, then extracted from the Scottish rail system – seems hard to justify.

• Before privatisation, public ownership and operation of the railways under British Rail was far more efficient than some popular caricature suggests. Indeed, by the 1980s British Rail outstripped many of its European counterparts in these terms, despite suffering from sustained underinvestment and uncertainty regarding funding. Nowadays, the picture is reversed: the government funnel vastly increased levels of public subsidy into a rail system which has become far less efficient than others around Europe.

• Railways throughout the rest of Europe are characterised by a far greater level of public-sector involvement than in Scotland and the UK. Finland, a country which is in some key respects comparable to Scotland, has a publicly owned and run rail system which is more punctual, more affordable and more technologically advanced than our own, despite receiving less public funding. Overall, the British rail system has been found to be 40% less efficient than those of comparable European countries.

• The privatised British rail system is an aberration both historically and internationally. Given the dominance in the Scottish Parliament of political parties open to the principle of public operation, the railways in Scotland should not have to continue to conform to this model. Yet until recently, Holyrood has had little ability to fundamentally alter the nature of the rail system in Scotland.

2. Scotrail should be taken over by a public-sector body at the earliest available opportunity

• As of 2016, however, the Scottish Government can fund and entertain public-sector bids for the Scotrail franchise, presenting Holyrood with the opportunity to make a significant break from the past two decades of short termist, often dysfunctional, and dogmatic UK rail policy when the current Scotrail franchise expires. This will provisionally be in 2025, but could be as soon as 2020 (with the new operator beginning in 2022) if Abellio is judged to be failing to meet its contractual obligations.

• In the absence of any major legislative changes in the next few years, a prospective public-sector operator of Scotrail will have to compete against private and foreign state-owned TOCs for the franchise contract. In order for a public-sector bidder to have a chance of succeeding, several key technical considerations regarding legality, financial backing and staffing will have to be taken into account.

• If the bidding process was to be successfully navigated, there is every reason to believe a publicly-run Scotrail could achieve a greater level of service than its predecessors.

• The recent case of public-sector operation of the InterCity East Coast franchise, which ran at a profit with customer satisfaction reaching record levels, proves the potential of publicly-run railways to achieve outstanding outcomes even within the limitations imposed by fragmentation and the franchise system.

• Public-sector operation would allow the reinvestment of operating profits into the creation of a new, fairer fares regime. Recent annual accounts Executive Summary iv suggest that the reinvestment of operating profits into fares under public-sector operation would allow for a 6.5% average fare cut, while retaining present funding levels. This potential cut could be even higher if, as was the case with East Coast, public operation led to greater efficiency, or if further funds were freed up by the abolition of the franchise system. Alternatively, funds could be put towards the creation of a new fares regime which prioritises affordability, reliability and fairness for all passengers.

• A publicly-owned Scotrail would be better placed to deliver beyond any specified, minimum obligations with regards to unprofitable social and environmental aspirations, and expansion to boost economic growth and activity, than current and past operators. Indeed public operation would also present an opportunity to incorporate greater responsiveness to social needs into governance structures.

• Broadly-defined public ownership of Scotrail may take the form of an arms-length public body, an integrated public transport body or a co-operative governance model (but with government financing). Though each has its own distinct potential advantages, in each case high levels of democratic accountability and responsiveness to public demands could be achieved through well-designed governance structures.

• Public-sector operation of Scotrail is a crucial aim in and of itself, one which clearly has the potential to lead to an improved experience for all those in Scotland who depend in one way or another on the efficient, effective running of the railways. Yet as things stand, even the best, most effective public operator of Scotrail would have to work within the confines of the franchise system, meaning it would have to go through all the cost and uncertainty of the franchise bidding process again within a decade of taking over Scotrail. At this point the franchise could easily return to the private-sector, as has been the case in the East Coast franchise. Our aspirations for our railways cannot, therefore, be limited to the development of a successful public bid for the Scotrail franchise.

3. In the long-term, a permanent public-sector Scotrail should be a fundamental part of a reformed, revitalised Scottish rail network

• The bringing about of a publicly-run Scotrail should prove the catalyst for a broader rethinking of the role our railways ought to play in Scotland’s overall long-term transport strategy. In 2017, social, economic and environmental imperatives demand that we start to think of rail travel as a fundamental public service, similar to how we see the roads at present, rather than as just another consumer product best left as the responsibility of competing private companies.

• In 2015, the resources expended by various bidders in the tendering process for the Scotrail franchise amounted to an indirect extraction of over £30 million from the British public transport system. In order to allow us to fully enjoy the rewards publicly-run railways have the potential to offer, the Scottish Government should seek the power to abolish the franchise system, and instead allow Scotrail to be operated permanently on a public-sector basis. This would help eliminate non-productive costs, facilitate long-term thinking and planning, and ensure a publicly-run Scotrail retains its transformative potential by providing a permanent break with decades of market-oriented rail policy. If the UK-level legislation enforcing the franchise system was to be repealed, or if the relevant powers were devolved to the Scottish Parliament, it would be possible for the Scottish Government to abolish competitive tendering by making a direct award to a public-sector operator regardless of the nature of Scotland’s future relationship with the European Union. This would be our strong preference over a public-sector franchise bid.

• In future, the Scottish Government should also purchase rolling stock directly, thus ensuring that privately-owned ROSCOs will no longer be able to extract significant profits from the rail system by leasing trains to TOCs at excessive rates. The total savings from doing so, previously estimated at as high as £127,000 per carriage per year, could amount to millions annually given the ongoing necessity that Scotrail replaces parts of its ageing fleet.

• Finally, increased levels of ambitious and far-sighted investment in rail infrastructure will be necessary if publicly-owned and run railways in Scotland are to have the capacity required to be truly transformative. Levels of investment in the railways have long lagged behind levels of investment in motorways, despite the fact that the rail infrastructure projects that have taken place in recent years have proven hugely successful. The new Borders Railway is a case in point, and provides an indication of the variety of benefits – environmental, economic and social – Scottish society could reap as a result of greater investment in rail.

• With regards to the environment, the most effective means of securing a reduction in emissions from the transport sector – now the single largest source of greenhouse gas emissions in Scotland – would be to achieve a modal shift in transport usage away from the roads and towards the railways. Given that rail travel is over twice as carbon efficient as travel by car, every 1% of current car passenger kilometres shifted onto the railways could be expected to reduce emissions by around 22KtCO2e. In addition, each tonne of freight transported by rail produces 76% less CO2 emissions than the equivalent HGV journey, while further electrification of Scotland’s railways would increase the efficiency of v both passenger and freight transport even more.

• In economic terms, enhanced rail links would increase connectivity and improve the prospects of those living in cut off areas, such as Levenmouth. Each freight train, meanwhile, removes between 43 and 77 HGVs from the roads. If more freight was to be shifted from heavy goods vehicles (HGVs) onto the railways, the £2.4 billion (source) annual cost of congestion could be reduced by £8 million per freight train increase. Further savings could also be made from the significant proportion of the Scottish Government’s £967 million motorways and trunk roads budget which is currently devoted to repairing damage for which HGVs are disproportionately responsible.

• Given that Scotland is a country in which over 30% of households do not have access to a car, a truly national and affordable rail network would give multitudes of citizens greater access to the swathes of Scottish social and economic life from which they are currently effectively excluded.

• Finally, the presence of well-funded, affordable and publicly-run railways would prove a powerful symbol of the sort of country Scotland aims to become in the 21st century. At present, while most similar European countries have efficient publicly-owned national rail companies operating most or all passenger services, Scotland’s trains are run by the Dutch state rail operator. A new, publicly-owned Scotrail has the potential to be a source of collective pride in the same way the National Health Service is today, and its presence would send a potent signal that Scotland’s society is one in which the infrastructure and services we have collectively built up contribute to shared rather than private prosperity, ultimately answering to and serving the common good.

Resource Address (URL)

https://commonweal.scot/wp-content/uploads/2017/11/A-Public-Future-for-Scotland…

Keywords

Railways

ScotRail

Publicly owned rail services

Language English