ScotRail dispute shows Scottish Government can't spend its way out of trouble, only into an even bigger mess – John McLellan

It’s only taken seven weeks for the folly of nationalising ScotRail to become clear.

Nicola Sturgeon unveiled a specially branded train at Glasgow Queen Street Station to mark ScotRail becoming publicly owned (Picture: Robert Perry/PA)

On Thursday at First Minister’s Questions, the buck for the breakdown of Scottish rail services in an inevitable pay dispute stopped where it was always headed, on Nicola Sturgeon’s desk.

Entertainment and arts organisers, publicans and restaurateurs are rightly furious that the night-time economy is once again under severe threat from a slashed timetable to cope with a driver shortage and, just like the 1970s, if the government owns the business, it owns the problems too. Yet from Ms Sturgeon’s answers to Conservative leader Douglas Ross and Labour’s Anas Sarwar it’s as if little had changed.

“It is so important that... ScotRail works hard to ensure, that the temporary timetable is just that – temporary – and that normal service is resumed as quickly as possible,” she said. “All parties must get round the table and negotiate a fair and affordable pay deal, and it is why ScotRail must continue the work that it is undertaking to train more drivers.”

Addressing the unions, she said: “I understand that their job is to represent their members and get a fair pay deal for them, but both parties should get round the table and negotiate for that in good faith.”

But Ms Sturgeon is effectively ScotRail and she’s giving orders to herself. Like any company, the management is there to implement policies agreed by the owners, be they shareholders or proprietors and the chief executive answers to the board.

In this case, ScotRail’s management answers to the Scottish Government which is therefore no longer an impartial broker, so when Ms Sturgeon asks all parties to get round the table, there is in essence only two and she’s one of them.

It’s certainly not Aslef, as Ms Sturgeon clearly demonstrated when she pointed out that, “last year, we negotiated with Aslef and agreed an extension to the rest-day working arrangements”. If “we” negotiated with the union when ScotRail wasn’t nationalised, there is no escaping the responsibility now.

In the desire to satisfy public clamour for state ownership of rail services, it was never fully explained what would be materially different, other than fan an expectation that somehow everyone would get what they wanted; trains would never be late, tickets would always be cheap and the staff would be paid what they wanted, and it would all work better because, well, just because.

But in less than two months, Aslef says negotiations are the worst they’ve experienced, and services have been slashed even though, as Ms Sturgeon was strangely keen to emphasise, this is only a pay dispute not industrial action.

God help travellers if the drivers actually strike. And when a settlement is eventually reached, the RMT will start it all over again.

The problem with politicians is they always think they can make a difference, even if they haven’t the foggiest idea what they’re doing, or haven’t fully considered the consequences of their actions.

The pandemic has raised a public expectation that governments should just spend their way out of problems and, as the cost-of-living crisis deepens after years of what in retrospect might look like an extraordinary period of affluence, the routes out of what could easily become an economic depression are narrowing by the day.

With inflation running at nine per cent and UK unemployment at a 50-year record low at 3.7 per cent (in Scotland even lower at 3.2), wages will be driven up, but higher earnings will be swallowed by higher energy and food costs, the latter predicted by M&S chair Archie Norman to rise by ten per cent, so higher general earnings will not spur increased productivity.

There is a belief that inflation is only the Bank of England’s responsibility through the blunt instrument of higher interest rates, but in the immediate period that will only lead to more misery for working people as mortgage deals expire, trackers soar and rents go the same way.

Lower personal taxation will help but it seems this is only something for the UK Government to consider not, heaven forfend, the Scottish Government which could cut income tax.

Increased productivity is the only sustainable way forward, but after 15 years the SNP has failed to drive forward a genuinely pro-growth agenda even though it would have been in the long-term interests of the independence cause to do so.

And with the SNP fully in lock-step with the Green Party’s anti-growth agenda, the First Minister this week pursued her opposition to North Sea oil and gas by calling for all exploration licenses to be suspended until the UK Government introduced “robust” climate compatibility tests.

Governments don’t grow economies, but they do create the conditions for growth, which is why the nit-picking barriers put in the way of the UK freeport scheme was damaging not just from a practical point of view but for the signal it sent.

Combined with attitudes towards such a vital sector as North Sea energy, too often does the Scottish Government convey the impression that “global leadership” matters more than the practical application of policies which will make a real difference to the here and now and focus on actions which will generate both public and private finance.

Over a fifth of Scottish workers are in the public sector, now including 5,000 ScotRail employees, and over a fifth of the whole population is economically inactive, all reliant on a healthy private sector to generate taxable revenue to pay for it all.

ScotRail can’t produce the revenue to pay the drivers what they want unless the trains are full of private people spending private money, otherwise they face not just tighter fares but higher taxes too.

Widen that out to the whole economy and, if the solutions are always the government spending more money on government, then the future is permanent stagnation in a listless economy reliant on the next political whim.