30 September 2015

The Little Engine That Couldn't

Choo, choo. At the risk of repeating myself, we really have to nail this one down: the Scottish Government does not have the legal power to take railways into any kind of public ownership. There aren't shades of grey here. There aren't knotty legal complexities. It is clear as day. Clear, apparently, to everybody except the new leader of the Labour Party. 

Interviewed by Gary Robertson on BBC Good Morning Scotland this morning, Jeremy Corbyn decided not to retreat from the inaccurate charges he laid at the door of the Scottish Government last Sunday. Instead, he chose to reiterate and elaborate on his allegations (from 02:40:00 in). And it is sorry, sorry stuff.

Robertson: "You also said on Sunday that they [the SNP] were behind the privatisation of ScotRail. Do you accept that that was wrong?" 
Corbyn: "No I don't think it was wrong at all, because I think - again - they could have taken a different option and could have pushed for public ownership rather than handing it over to the Dutch public." 
Robertson: "But that was about - again - that was about the franchise, wasn't it? Their argument is that in 1993, that was when ScotRail was privatised." 
Corbyn: "The franchise, yes. But I do think they had a choice, and they could have exercised it to ensure that ScotRail remained - or, er turned, rather - into full public ownership. Surely that would be a much better way of doing things. And indeed the Labour policy, overall, is to return the franchises and the rail operating companies into public ownership, so that we all get the benefits of the rail service and the profits that go with it."

This is a mess. Actually, it is worse than a mess: it is a sleekit politician's answer. And worse, I'm afraid, it is a lie. So let's strip it all back to basics. If Holyrood passes legislation which "relates to reserved matters", the law is void. If Scottish ministers act beyond their powers, they behave unlawfully and a costly and damaging trip to the Court of Session beckons. If we rummage through Schedule 5 of the Scotland Act 1998, which sets out these reserved matters, we find the "provision and regulation of railway services". Holyrood can't change the Railways Act of 1993

And it is the 1993 Railways Act which sets out the legal process for tendering rail passenger services. This was the instrument of rail privatisation - not the Scottish Government's October 2014 decision to award the new tender to the Dutch company, Abellio. Only Westminster can change the rules. And what do we find in section 25 of the 1993 Act? Oh look. A provision which says - clear as day, black and white - that "public sector operators" can't be rail franchisees. And how are we defining public sector operators? That is any company or subsidiary which is majority owned by ministers, or civic government. That test binds the Scottish Government. That seems to catch the kind of operation Mr Corbyn has in mind. 

The new Scotland Bill finally proposes to tweak the Railways Act to make it clear that, in future, section 25 will not "prevent a public sector operator from being a franchisee in relation to a Scottish franchise agreement." In future, a "people's Scotrail" will be possible, in Scottish Labour's campaigning phrase. This is well and good: a positive development which will allow the merits and demerits of a public sector bid to be explored during the next round of tenders. But on the 8th of October 2014, the Scotland Bill was a dim speck of light on the horizon. 

On the 8th of October 2014, Lord Smith of Kelvin hadn't even held his first meeting with party representatives to negotiate the next stage of devolution. There was no timetable to change the tendering rules, no legislative proposal being scrutinised. Just wooly aspirations, a Tory government and a Labour party dragging its feet on the future powers of the Scottish Parliament. Until the ink was dry on Smith, and the Bill had been introduced, it was anything but clear whether Holyrood would be empowered to consider the kind of public sector bid the new Labour leader understandably favours.

But don't believe me. I refer you to the analysis of Kezia Dugdale's predecessor as Scottish Labour leader, Jim Murphy, who blogged that he wanted to:
“... see better, cheaper public transport. The Smith Agreement means we can have a ScotRail that is serving commuters, not shareholders. The current ScotRail franchise sees money going straight from the public purse to shareholders pockets. The incoming one will see Scottish public money support transport infrastructure in Holland. Neither deal is the best deal for Scotland when commuters are waiting on late running services, paying over inflated fares whilst being squeezed against train doors on overcrowded journeys. The best deal for Scotland is a People’s ScotRail, a railway company whose commitment is not to a group of shareholders or a foreign Government, but to the people of Scotland.”
The merits of a public sector bid are one thing. But even the People's Scottish Jim for Scotland - not averse to throwing any old brickbat at the SNP - recognised that what he wanted to do with the railways wasn't yet legal. Even Mr Murphy declined to slag off the Scottish government for failing to do something which the law prevents them from doing. And yet, given a golden opportunity to clarify his remarks - in the interests of straight talking and honest politics - Mr Corbyn doubles down on his wrong-headed claims. 

So taking all of that into account, a few questions. In what sense, Mr Corbyn, could the Scottish Government "have taken a different option" on rail franchising? What "choice" of "full public ownership" did the law give them? Are you seriously suggesting that failing to convince the UK parliament to change the law amounts to an SNP privatisation agenda in all but name? Does that seem fair to you? Do you think most people, listening to your interview, would have understood this was really what you meant? Or do you think the half-attending average punter would be left confused and deceived by your remarks?

You began by suggesting the SNP privatised the railways. Now that has morphed into a claim that they could have considered a public sector bid, but failed to do so, which was bad. But a thorough examination of the law shows us that the parliament in which you sit made it legally impossible for Scottish ministers to entertain the public sector bid you desire. The Scotland Bill, currently going through the parliament in which you sit, underscores the point and fatally undermines your argument. So in what sense did the SNP privatise the railways? Oh dear Jeremy. Straight talking, honest politics my foot. 

I think I can, I think I can, I think I can, said the Little Engine That Could. But thinking doesn't make it so. 


  1. My reading of "But I do think they had a choice, and they could have exercised to ensure that ScotRail remained - or, er turned, rather - into full public ownership." is that the Scottish Government could and should have fixed the tendering so that state-owned bids were guaranteed to win.

    1. That's certainly the Calmac argument, Brian. The criteria you apply in tendering can have a significant impact on what bodies are able to fulfill all the demands. But it doesn't extend to the railways as there can be no state-owned bids under s.25.

  2. Need to be slightly careful. There is no legislative devolution relating to franchise. But there is administrative devolution (circa 2003) allowing Scotland control of franchise allocation within the rules referred.

    Encouraging a co-operative, acting in the public interest, to bid MAY be possible provided public funds, guarantees and direction are absent but no one seems willing to pick that one up because of the substantial finances needed even to bid.

    1. I mention the legislative provisions and competence issues, because they mean you can't amend the 1993 Act and it is a question left to MPs. A critical point which might not be obvious to everyone. On your second point -- absolutely. Though I am not sure that kind of organisation would really represent a public sector bid in the sense Mr Corbyn means here.

  3. What would happen if the Scottish government decided to ignore the Scotland act and go ahead and take control of the railways?

    Would it be the uk government who would take them to court?

    Or is there just not the framework to break the Scotland act?

    How would the UK government react to a Scottish government breaking the act? In my head It always ends with the Scottish Parliament been dissolved and full control returning to Whitehall; Basically you've been naughty boys and girls so we are taking away your toys.

    What's the saying? Devolved power is always retained power.

    1. A very, very hypothetical hypothetical. Firstly, such a plan would almost certainly fail to be certified by the Presiding Officer as falling within Holyrood's powers. If, by some curious chance, the Bill was nevertheless proceed - yes, the Advocate or Attorney General would refer it to the UK Supreme Court for a decision on its lawfulness. Or, for that matter, any aggrieved punter could sue too.

  4. When pressed on this Ian Murray said Labour's complaint was that the Scottish Government should just have "waited a few months" until the Scotland Bill was in place. Even though Scottish Labour itself planned to do nothing until the NEXT franchising period:


    1. James Kelly's brave partisanship on this one was never entirely convincing. To put it gently - oh so gently.

  5. I read your post quite religiously (it is very nice to have somebody from a similar legal background analysing matter through this viewpoint) and English law is something I understand very well. I can boil it down to this: There is the general rule, exception to the general rule and exception to the exception (This is essentially the English character too).

    I understand your position perfectly and the possible ulra vires act of the Scottish Minister/Government should it renationalise it; it doesn't mean the Scottish Government could/should not do it as a poltical move. At this junction of the independence movement, every participant should actively antagonise Westminster as much as possible.

    In that spirit, someone on Wings highlighted this section of the Railways Act

    "26ZA No adequate tender for franchise received.

    (1)This section applies in the case of an invitation to tender under section 26 for the provision of services if—

    (a)the appropriate franchising authority receives no tender in response to the invitation; or

    (b)it receives a tender but considers that the services would be provided more economically and efficiently if they were provided otherwise than under a franchise agreement entered into in response to the tender.

    (2)The appropriate franchising authority may —

    (a)issue a new invitation to tender under section 26 for the provision of the services;

    (b)decide to secure the provision of the services under a franchise agreement with a person who did not submit a tender; or

    (c)decide not to seek to secure the provision of the services under a franchise agreement.

    (3)Nothing in this section prevents the appropriate franchising authority, where it has decided not to seek to secure the provision of services under a franchise agreement, from subsequently making a decision to issue a new invitation to tender for the provision of those services."

    as a way to overcome the prohibition (emphasis on section 1[b]). I am not well versed in particular UK statutes nor I do have the time, so I am grateful if you can opion in this.

    1. Was this not the thrust of the SSP's ill fated Provision of Rail Passenger Services (Scotland) Bill, ruled outwith Holyrood's legislative competence by the Presiding Officer? (http://www.scottish.parliament.uk/parliamentarybusiness/Bills/24964.aspx)

    2. A fine spot, absolvitor!

      A pretty clear legislative competence transgression, I should have thought. The critical point here is, ministers stand a snowball's chance in hell of artificially pretending that no economic option presents itself under this section. At the very least, they would have to start the tender process -- they couldn't, from a standing start, decline to do so under this section, with a view to keeping trains under more congenial forms of control.

  6. There was a question of not issuing a franchise under section 30 of the same act, so Scotrail could be operated by the State even if it wasn't owned by the State. Corbyn is confused between ownership and operations and that confusion shows up in Labour policy for railways.

    As far as the current regime in Holyrood is concerned, the acusation is that rather than doing what they can do (in this case operate the railways directly), they deflect onto powers they don't have (full public ownership of railways). Except it is likely they chose to franchise the railway because it seemed the better choice, and they possibly wouldn't have taken railways into full public ownership for the same reasons if they had been able to do so.

    1. Sorry, I should have used "administration", not "regime" in the above comment.

    2. Avoiding responsibility is always the better political choice.

  7. Continue that train of thought Jeremy. It's a loco motive for attempting to shunt lost Labour goods back onto the Circle Line going round and round to and from the same old station.Waterloo.

    Come on , get aff !

  8. Now now Andrew, this degree of pedantry mixed with righteous hostility does not suit you. In this new Corbynite dawn, we should calm down, stop accusing people of being "liars" and instead focus on the underlying principles and values of our politicians. Jeremy Corbyn has always been in favour of the nationalisation of the railways - even going back to the days of the Railways Act 1993. It is clear that he believes in the merits of public sector rail provision deep down in his soul. Where have the sainted SNP been in this debate over the years? Oh yes, in government, making decisions about the railways. During this time, did the SNP lobby the UK Government to take action and allow public sector operators to compete for rail franchises? No, they did not. Did they use the bully pulpit to campaign for rail nationalisation during these years? No, they did not. Did they make speeches on the streets, in town halls and in Parliament advocating for the railways to be brought back into public hands? No, they did not. Well, Jeremy Corbyn did. The SNP's silence on this important issue of public policy is deafening. The reason for this silence is clear - the SNP do not care. They have acquiesced in the status quo of rail privatisation and are quite content for such privatisation to continue in perpetuity. If the SNP really cared about this issue, one would have maybe expected them to kick up a bit of a fuss over the years. Jeremy Corbyn certainty kicked up a fuss - and re-nationalisation of the railways is now a central pillar of Labour Party policy. We have to understand Jeremy Corbyn's comments in the context of the SNP's feeble servility on this issue. In light of this, I would say that Jeremy Corbyn is perfectly entitled to chastise the SNP for their meek acceptance of rail privatisation. In short, the SNP are bad.

    1. "It's Labours policy", but for how long? In short Labour flip flopping and ineffective.

    2. He's not entitled at all to chastise SNP. In fact the Express reports Keith Brown in 2012 talking about the possible re-nationalisation in an independent Scotland or if more powers over railways were handed over.

      Furthermore, although Corbyn may personally have been in favour of taking the railways back into public ownership his party did nothing towards that in 13 years of government. Like Trident I smell hypocrisy.

      The SNP may be bad (not) but Labour are congenital liars.

    3. No, what we have to understand is whether what he is claiming the Scottish government could do was within their remit. It was not.

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