SCOTLAND’S railways would be returned to the public sector in a new non-profit ScotRail franchise under Labour, leader Jim Murphy has pledged.
A new “People’s ScotRail” would provide cheaper rail services with financial returns ploughed back into the Scottish public purse rather than going to foreign companies or shareholders, he said.
The Smith Agreement will devolve powers to the Scottish Parliament to allow a non-profit, public sector organisation to bid to run Scotland’s railways.
Labour called for the suspension of the current ScotRail franchise until after the new power is devolved.
It was awarded to Dutch government-owned firm Abellio in October amid SNP warnings that a suspension would have cost the Scottish Government millions and could have brought trains to a standstill.
Murphy said: “I want 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.”
There was controversy when it was announced last year that Abellio would be awarded the £2.5 billion ScotRail contract.
Abellio took over from FirstGroup, who had run the franchise for the previous ten years. FirstGroup’s franchise will end on 31 March this year, making way for Abellio who are scheduled to run the network – which employs almost 5,000 staff and operates 2,400 train services – for the next 15 years.
Abellio won the contract in the face of competition from FirstGroup, Arriva, MTR and National Express.
But Transport Scotland’s decision to give Netherlands-based Abellio the deal saw trade unions complain that the contract had gone to an arm of the Dutch state railway.
Abellio is the UK arm of Nederlandse Spoorwegen, leading to the RMT union claiming that profits from Scottish rail services would be used to underpin investment and fares in Holland.
The RMT argued the deal represented a missed opportunity to bring the franchise back into public ownership, describing it as a “betrayal of the Scottish people”.
At the time, the then transport minister Keith Brown said Abellio pitched “the least expensive but most cost-effective” bid to take over ScotRail.
The decision has provoked anger from Labour and the unions, who insisted it should have been shelved until after the Smith Commission on devolution, which could permit Holyrood to appoint a public sector bidder.
Brown argued that shelving the decision until after the Smith Commission powers were in place would have cost the Scottish Government millions and could have brought trains to a standstill. He welcomed the contract, saying that Abellio would invest millions in providing an improved service and superior facilities for passengers plus a better deal for staff.
Last night a spokesman for his successor as transport minister, Derek Mackay, said: “Jim Murphy has hit the buffers with this embarrassing gaffe, which shows Labour doesn’t understand either our railways or the Smith Commission.
“Non-profit organisations can already bid to run Scotland’s railways. Indeed, the Scottish Government invited such bids for the new franchise but none came forward.
“The powers in the Smith Commission actually relate to allowing public sector bids – a principle the Scottish Government supports and Labour, hypocritically, failed to include in their submission to the Smith Commission. This is yet another Murphy mess-up.”
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