Chamber and committees

Excellent.

Obviously, any rail disruption causes issues and problems for commuters, as we all know. We have not had the same degree of industrial action as has taken place over the past number of years in England, which I think has caused the majority of the cross-border problems.

There might be interaction between cross-border problems as a result of industrial action or, indeed, as a result of problems like the one that I experienced with LNER on Sunday. It seemed that everybody travelling from Waverley station who was going south to London had to turn up at Haymarket instead, which made it rather congested. My understanding is that that was as a result of a breakdown—and breakdowns happen.

Some of the issues will occur on an operational level. However, I hope that there will be a degree of stability in the system. I think that pay negotiations are being finalised, and I am very pleased that the rail unions are recommending that the Scottish pay offer is accepted. I understand that something similar is being attempted in the rest of the UK, which is welcome.

There is a combination of things. Public ownership in and of itself has, I think, stabilised our relations with the trade unions. They have said that relations have been in a much better place since public ownership. Will it be the same with the UK Government? I would hope so, but we obviously have not seen evidence of that yet.

Another benefit of public ownership is that we are focusing on passenger service delivery as opposed to companies seeking profit. That allows reinvestment in the service. It is quite telling that 400 additional staff members have been employed since public ownership. A lot of those are front-facing and public safety roles. The figure includes 260 new drivers, and another 160 drivers are being recruited currently. Replacing drivers is always a challenge. People retire, they can work for other companies and so on. Ensuring that we are not dependent on overtime and rest-day working is a common interest, and trying to achieve that is the right thing to do. Trade union members are perfectly entitled not to work on a rest day or to do overtime.

If there could be more stability in the system, that would really help everybody. It would mean that we would not have to have the temporary timetables that we have seen. The major disruption that is caused by strike action in the rest of the UK has had knock-on effects.

It is all quite complex. I am not going to assume that public ownership will suddenly resolve everything and that everything will be okay. Some of the issues will be at the operational level, and what happens will depend on the attitude of the employers and their behaviour towards their workforce. There are many challenges ahead. There always are, as I have realised since taking on the transport brief.

Thank you, convener. Good morning, members, and thank you for inviting me to discuss the legislative consent memorandum for the UK Government’s Passenger Railway Services (Public Ownership) Bill. I welcome the objectives of the bill as introduced and I recommend that the Scottish Parliament should give it legislative consent.

The bill represents an important development for which the Scottish Government has long advocated—the shifting of rail services back into public ownership across the UK. The bill aligns with the Scottish Government’s policy aims and objectives of a fully publicly owned railway to deliver for the people of Scotland and to achieve our vision of a reliable, resilient, affordable and accessible railway.

As members might be aware, the Scottish Government has already sought to achieve that for ScotRail and the Caledonian sleeper services as far as is possible within the current legislative framework, which is reserved. In 2022, operator of last resort deployment brought ScotRail and the Caledonian sleeper services into public ownership and control. Our duty to provide or secure the provision of services under section 30 of the Railways Act 1993 was engaged, and those services are now delivered through arrangements with our wholly owned company, Scottish Rail Holdings Ltd, and its subsidiaries.

The Scottish arrangements already align with the UK bill, and amendments to section 30 of the 1993 act will mean that those arrangements can continue on an on-going basis; indeed, achieving that aim as well as protecting Scottish devolved policy interests has been my key priority with the bill. Officials’ extensive engagement with the UK Government Department for Transport and with Scottish Rail Holdings has allowed us to consider and take an informed view of the bill’s policy intent since July, and I thank them for that. I also welcome the willingness of the UK Government secretary of state to engage with me and transport ministers from the other devolved Governments on the bill and, in particular, the close working among our officials.

The bill allows services to be delivered by a public sector company as the first-choice option rather than as the last resort. It allows current public sector delivery arrangements to be permanent, which will provide a stable network on which we can continue to provide reliable, affordable and attractive services.

The bill amends the Railways Act 1993 to replace the presumption that rail passenger services should be delivered by franchises with a presumption that they will be brought into public ownership when current franchise agreements end. It expects franchising authorities, including the Scottish ministers, to provide or secure the provision of designated services according to their duty under section 30 of the 1993 act, which is currently known as the operator of last resort duty.

The Scottish Government considers that the bill engages the legislative consent process, as modifications to the 1993 act alter the executive competence. The bill removes the power to award franchise agreements and the requirement to publish a statement on how that power will be exercised, and it proposes a new duty to designate services that ought to be provided under section 30. It prohibits extending existing franchise agreements or agreeing new ones, although the UK secretary of state, as the only franchising authority still to have franchise agreements in place, will have a temporary power to make further short-term awards or extensions to incumbent franchisees in certain circumstances.

The bill amends section 30 to ensure that the duty exists on an on-going basis, and not only in circumstances when no franchise agreement is in place in respect of the services. Franchising authorities may secure the provision of services to fulfil that duty only by directly awarding a contract to a public sector company, which can be a wholly owned company.

Finally, I have another important rail-related announcement on which I would like to update the committee directly. As the announcement will be made via the answer to a Government-initiated question this morning, it would be remiss of me not to use the opportunity provided by this morning’s meeting to give an update.

I am announcing today that the Scottish Government has agreed to ScotRail moving to replace the intercity high-speed train fleet that operates between Glasgow, Edinburgh, Aberdeen and Inverness. More than 4 million passenger journeys were made on intercity trains in the past year, and I want to maintain and, where possible, increase that number. This planned investment will ensure the reliability of our intercity routes for the long term, reduce emissions from intercity services and support our efforts to decarbonise Scotland’s railways. The contract notice will be published in a few weeks, and I will update the committee on progress.

In the meantime, I thank you for inviting me to discuss the legislative consent memorandum for the UK Government’s Passenger Railway Services (Public Ownership) Bill, which I am happy to answer questions on.

The open procurement process will establish the optimum requirement for delivery of the trains. I have talked about improvements in passenger service, and ScotRail will establish and publish the contract details in the coming weeks.

I am fairly open on open access because there are opportunities that have not necessarily been fulfilled. Open access challenges the main operators to ensure that they have better services. However, that will be more an issue for the UK Government, because most of those services are cross-border services. Therefore, as the bill progresses through the House of Commons, the matter will be subject to scrutiny.

Open-access operators operate even though we have public ownership of the railway in Scotland. That is primarily because of the arrangements that the UK Government makes. I think that we have the space for that. I do not think that it is problematic, but that depends on the extent and scale of open access and whether it is seen as being a few companies doing it on occasion, as opposed to there being a full roll-out of open access and so on.

The issue is more for the UK Government, but we will keep a keen interest in it.

Yes.

Can I take that question back and think that through?

Even just looking at the LCM-related legislation, we can see that establishing the timeframe for when franchises might come to an end will be a challenge. The approach will not be to have full-scale nationalisation on day 1; it will be a rolling issue.

On the wider issue of GB rail reform, I am conscious that this committee has a full agenda and that your interest in the issue is similar to ours. Therefore, I undertake to keep in close contact with the convener and the clerks to share what we know about timescales for scrutiny and engagement, so that our work can be aligned and we can all take the opportunity to ensure that Scotland’s interests are protected.

I cannot speak for the UK Government, but I can speak to our experience over the period of our public ownership of rail. Remember that it has been quite a short period. With the establishment of Scottish Rail Holdings Ltd and with our pressing down on spend, we have managed to reduce costs rather than have costs increase. We have seen substantial passenger-number increases—I will look up the figures later but, obviously, they have increased substantially since the pandemic period. Our satisfaction levels are the third or fourth highest in the UK, and that figure has increased, with the latest finding being a satisfaction level of 91 per cent. Under our public ownership, good things are happening in terms of cost and satisfaction levels. Performance levels have gone down, but that is because things were more efficient during the pandemic, as there were fewer passengers and so on.

I think that our experience to date indicates that public ownership has benefits.

There is an underutilisation of the potential of what we have in our railways, and there are different ways of trying to resolve that. There is far more that can be done on freight, and I am keen to do that under control period 7. We have strong targets under CP7, and I am glad that the UK does, too. However, when it comes to utilising our rail tracks, there are a lot of moving parts, as it were, not least in terms of what is electrified, what is not electrified and what that means in terms of speed and so on. Obviously, the fact that some operators are cutting cross-border services to Scotland does not help. Of course, as we have seen recently, some of that space has been filled by open access operators, and we have to watch where things are going on a UK basis.