All aboard The Big Debate Express! This week we ask: “Should Britain’s railways be renationalised?”
Yes – Harry Adams
The way Britain currently operates its railway system is flawed. But for over two decades governments have arrogantly maintained this system of cushy and lengthy franchise deals meted out to Train Operating Companies (TOCs) which in turn reap the benefits of limited or no competition and massive government subsidy. Ticketing systems are often complicated and misleading, and above-inflation fare rises put our railways at risk of becoming, in the words of former Transport Secretary Phillip Hammond, “a rich man’s toy”.
Given the fractured nature of the current system – in which infrastructure, operating rights and rolling stock are owned by three separate parties – it is little wonder that we find ourselves in a situation like this.
And yet, passenger numbers continue to boom and the government continues to use this as justification for its unswerving sponsorship of the current system. This is misleading and increasingly contrary to the electorate’s wishes; as illustrated by a recent YouGov poll which found that 58% of those surveyed wanted to see the railways nationalised.
The way Britain currently operates its railway system is flawed.
The privatisation argument is founded on two key myths. The first is the gross exaggeration that privatisation is the sole cause of the current renaissance of railway travel. The dissolution in 1993 of the tired British Railways (BR) halted the long decline with fresh private investment and sorely needed rebranding.
However, to pin the cause of today’s record-high passenger numbers on this completely is to overlook factors beyond the railway industry itself; namely, increasing road congestion and fuel prices. Additionally, the “competition, innovation and flexibility”, detailed in the 1992 White Paper, and assumed to be unachievable by any publicly run system, has never materialised.
Only with the introduction of “open access agreements” – in which the government allows certain additional TOCs to operate specified routes in competition with the main franchise holder – has anything akin to consumer choice been achieved. But the scale and scope of such operations is limited; something unlikely to change in the current climate without increasing subsidy payments, as the major TOCs oppose any competition as a threat to their profit margins.
The second myth is that a publicly owned railway would automatically take the form of pre-1993 BR, without learning any of its lessons. This is something to be wary of, but the BR of most people’s memories must be put in its proper context; that is, in the late 1970s and 1980s, when railways were unfashionable and limited congestion made road travel far more attractive.
Indeed, we already have evidence that the old BR-mould of operation is not the only form a publicly run network could take. From 2009-15, Directly Operated Railways (a not-for-dividend subsidiary of the Department for Transport) stepped in for the disgraced National Express on the East Coast Main Line.
It not only made the route profitable, but cost the government less to operate in subsidy payments than the Virgin-operated West Coast Main Line. However, in March 2015, the franchise was hastily re-privatised, at a greater cost to taxpayers and with dire implications for competition; Virgin now operates both the West Coast and East Coast routes.
This is transport policy at its most ideological. Directly Operated Railways provided a clear and successful alternative to the current regime of eye-watering subsidies, and during its six years of operation returned the government more profit than any other franchise.
In recognition of this, both Jeremy Corbyn and Caroline Lucas have proposed staggered nationalisation programs, whereby a government body like Directly Operated Railways assumes control of the franchises as they come up for renewal.
The government’s current policy, however, aims to make this potential process as difficult as possible, ensuring it would take until the early 2030s to complete, thereby risking a fractured transitional period in which the remaining TOCs become increasingly de-incentivised by looming nationalisation.
This is transport policy at its most ideological.
This is proving a powerful deterrent, but the overall cost of mindless ideological adherence to franchising in the face of a proven and superior alternative will ultimately be borne by the passenger and taxpayer. Ensuring that railways operate the public service desired of them will always cost the taxpayer in some form. Either by direct funding, or perpetuating the illusion of private sector competition by clandestinely funnelling public money to TOCs in the form of subsidies.
Further privatisation is an even less attractive option. It would likely entail the selling off of government-owned assets, fracturing the system permanently with little scope for effective regulation, and a situation in which subsidy-less TOCs soothed their stretched profit margins with fare increases or cuts to services.
But we have an obvious solution. Nationalisation along the measured lines of Directly Operated Railways is profitable and effective, for taxpayers, passengers and government alike. Irrespective of ideological views, it is time we rid British transport policy of this franchising rot for good.
No – Alistair Woods
Poor service, late, dirty… Ask your parents what they thought of British Rail and you will probably get an answer along those lines. Since the railways were privatised in the mid ‘90s they have improved markedly in multiple ways. So I find the statistic that 60% of Britons support railway nationalisation worrying.
The easiest way to demonstrate these improvements is to simply look at the facts, so here goes.
From 1993 to 1997 the government set up a tendering process whereby they offered up different sections of track to be run by private franchises, on approximately 10 year leases. Previously the whole thing was controlled by the state owned British Rail.
The key change has been increased investment. For decades the government had underinvested. In 1994 investment was £1.2bn (adjusted for inflation), but by 2014 it was £6.8bn. So even though trains can be horribly overcrowded in rush hour and halted by a few leaves or a millimetre of snow, they are actually in a far better state than if they had been left in the government’s hands.
These improvements have been noticed by the public, whose satisfaction with the railways has risen 7% to 83% since 1999 (the first year this was surveyed). More significantly people have been talking with their feet. Since privatisation passenger numbers have increased by 117%. This growth far outstrips comparable networks, such as those of France and Germany.
You should note that subsidies for the railways have increased in real terms, from £2.2bn to £3.8bn today. However, after considering the extra passengers, this works out as about a 20% decrease in subsidy per passenger journey, meaning that each journey costs the government less.
But perhaps the greatest complaint people have today is fare increases, which have gone up by 24% according to the Economist. But why should we assume that renationalising the railways would reverse this?
Since the railways were privatised in the mid ‘90s they have improved markedly in multiple ways.
Where most supporters of renationalisation perk up is at the fact that it is estimated that Britain’s railways are around 40% less efficient than comparable publicly owned European ones. Many then infer that therefore renationalisation must be the golden ticket.
However, the main reason for these inefficiencies is not the economies of scale that would occur under a single public company. Instead it is expensive labour practices that need to be tackled, according an independent government commissioned report.
Take a look at TfL, where Tube drivers start on £50k and strikes are seemingly annual, now guess whether the government would the required action to deal with this, i.e. fire a lot of people. If you want to improve efficiency look into leasing out the track itself (currently it is just use of the track) or changing lease lengths.
Instead it is expensive labour practices that need to be tackled
A major barrier to renationalisation is that the initial cost would be huge. The government would either be faced with spending billions on buying out the franchisees’ leases. Or lose tens of billions in private investment by taking over the lines as their leases ended, giving the firms no incentive to invest once they knew their lease was not going to be renewed.
Initially, from an outsider’s perspective, renationalisation may look great. But due to the chronic underinvestment under public ownership we are not in the same position as other countries, thus to try and emulate them would wrong. In our current situation, keeping our railways in private hands is the best policy.
And finally, yes, rail companies will make a profit. And yes, they are heavily subsidised. But we get a better service that’s better value for money for the government and the public. Get over it
Keeping you informed. Today the Scottish First Minister fights to block the Trade Union reforms in Scotland. The Workers of England Union campaigns for an English First Minister so that they can also fight to block these unacceptable Trade Union reforms being implemented in England. We wish Nicola Sturgeon every success today and hope that one day the workforce in England will have a First Minister protecting our interests.
Trade union reforms ‘unacceptable’ in Scotland, warns Sturgeon
14 December 2015 00:01 GMT
Nicola Sturgeon has warned David Cameron that imposing Conservative trade union reforms in Scotland would be “unacceptable”, ahead of a meeting in Downing Street. Nicola Sturgeon: Meeting Prime Minister over trade union reform.© HEMEDIA / SWNS Group
The First Minister said she would set out Scotland’s “clear opposition” to the Trade Union Bill when she meets the Prime Minister.
If passed, the Bill will introduce a threshold for strike ballots, new measures on picketing and will allow companies to hire agency staff to cover for strikers.
In attempt by the Scottish Government to block the UK-wide reforms from being enacted north of the border was rejected as “not competent” by the Scottish Parliament’s presiding officer Tricia Marwick last week.
Speaking ahead of the meeting, Ms Sturgeon said: “There is clear opposition across Scottish society and across the Scottish Parliament to this damaging piece of legislation.
“The number of days lost to strike action have been reduced in Scotland by 84% through partnership working, not by slapping sanctions on workers.
“To impose this Bill on Scotland would be an unacceptable step and I will make that clear to the Prime Minister.”
The discussions will also focus on co-operation between the UK and Scottish governments on security and intelligence in the wake of the terror attacks in Paris.
The Prime Minister said: “We know that Daesh pose a very direct threat to our country and our way of life. That threat applies across the UK and so it is essential that the UK Government and the governments of our devolved nations co-operate in the most effective way.
“We are looking at a number of issues, including the use of intelligence information, and we also need to ensure co-operation at a legislative level as well.
“We cannot afford to give terrorists safe spaces in which to communicate and we must give the police and security services the tools they need to keep us safe in the 21st century.
“I am hopeful that when we debate the Investigatory Powers Bill in the new year, we can achieve cross-party support for these fundamental concepts.”
He insisted that the fiscal framework underpinning Holyrood’s new tax and welfare powers would be fair to Scotland as discussions on the financial rules accompanying further devolution continue.
Mr Cameron said: “Both the UK Government and the Scottish Government are committed to getting a good deal for Scotland and these discussions are continuing in good faith.
“What I am absolutely clear on is that we must abide by the Smith principles – that is the promise we have made to the people of Scotland. This means that the fiscal framework must be fair to Scotland, fair to the rest of the UK, and built to last.”
Ms Sturgeon said: “If the financial framework accompanying the new powers is wrong, Scotland could be worse off by hundreds of millions of pounds a year.
“The Smith Commission was clear that the Barnett Formula must continue unaltered, and that the Scottish or UK governments should be no better or worse off simply as a result of the transfer of powers – before any policy decisions are taken.
“It is absolutely crucial that future Scottish governments can use the new tax and spending powers, to create a fairer society and grow the economy, without losing out.
“Today is not about agreeing a final deal but I hope we can make significant progress in agreeing that the deal must be a fair one.”
Guardian undercover reporters find world where staff are searched daily, harangued via tannoy to hit targets and can be sacked in a ‘six strikes and you’re out’ regime
Sports Direct warehouse, store and distribution centre at Shirebrook, near Mansfield
The Sports Direct warehouse, store and distribution centre at Shirebrook, near Mansfield, England. Workers are kept onsite at the end of each shift to undergo a compulsory search by security staff.
Simon Goodley and Jonathan Ashby
Wednesday 9 December 2015 21.56 GMT Last modified on Thursday 10 December 2015 01.00 GMT
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Temporary workers at Sports Direct, the booming retail chain controlled by the billionaire Mike Ashley, are receiving effective hourly rates of pay below the minimum wage, an investigation by the Guardian can reveal.
Warehouse staff at the group, which is controlled by Britain’s 22nd richest man, are required to go through searches at the end of each shift, for which their time is unpaid, while they also suffer harsh deductions from their wage packets for clocking in for a shift just one minute late.
A day at ‘the gulag’: what it’s like to work at Sports Direct’s warehouse
The practices contribute to many staff being paid an effective rate of about £6.50 an hour against the statutory rate of £6.70 – potentially saving the FTSE 100 firm millions of pounds a year at the expense of some of the poorest workers in the UK.
The discovery of the low pay being received by Sports Direct workers comes on top of a string of criticisms of the working conditions within the retailer’s warehouse in Shirebrook, Derbyshire, where more than 80% of staff are on zero hours contracts. Workers are also:
Harangued by tannoy for not working fast enough.
Warned they will be sacked if they receive six black marks – or “strikes” (see document below) – over a six-month period for offences including a “period of reported sickness”; “errors”; “excessive/long toilet breaks”; “time wasting”; “excessive chatting”; “horseplay”; and “using a mobile phone in the warehouse”.
Banned from wearing 802 separate clothing brands at work.
Have to go through rigorous searches – down to the last layer of clothing, asked to roll up trouser legs and show top of underwear – which typically takes 15 minutes, because management is so concerned about potential theft.
Daily body searches: workers are banned from wearing 802 brands
Local primary schoolteachers have told the Guardian that pupils can remain in school while ill – and return home to empty houses – as parents working at Sports Direct are too frightened to take time off work.
Union officers say the strict culture in the warehouse has resulted in workers being afraid to speak out over low pay and conditions as they fear immediately losing their jobs.
The criticisms of Sports Direct – which have also included questions about whether its pricing policies are misleading, as well as the influence Ashley has on a company whose shares are held by many UK pension funds – come as the public company continues to dominate the UK sports retailing market and its trading performance flourishes.
The retailer is expected to announce more positive results to the City on Thursday – part of a financial success story that is almost entirely credited to the unconventional retailing nous of Ashley, a self-made man whose fortune amounts to £3.5bn, according to the Sunday Times Rich List.
Transline rules for Sports Direct workers.
By placing two undercover reporters inside Sports Direct’s warehouse, as well as interviewing former employees and speaking with workers about their roles while the journalists were employed on the site, the Guardian has established that many workers are in effect receiving less than the minimum wage per hour, over the total time they are required to spend in the warehouse and after financial penalties.
All warehouse workers are kept onsite at the end of each shift in order to undergo a compulsory search by Sports Direct security staff, with the experience of the Guardian reporters suggesting this typically adds another hour and 15 minutes to the working week – which is unpaid.
The discovery raises questions of whether such practices are within the law relating to the minimum wage. Lawyers said that paying workers for going through compulsory security checks had never been specifically tested under European law, but they added that a recent ruling by the European court of justice on the working time directive, which related to technicians travelling to customers’ premises to install equipment, appeared applicable to the policies employed in Sports Direct’s warehouse.
Clocking out: staff are penalised for logging off early
That ruling stated that as the workers’ travelling time could “neither be shortened nor used freely by the technicians for their own interests” then they were “at the disposal” of their employer. Therefore, their time is covered by the directive and counts as working time.
Mike Ashley: the ins and outs of Sports Direct tycoon’s empire
Zoe Lagadec, a solicitor at Mulberry’s Employment Law Solicitors, said: “Given that the employees are not free to leave their place of work until and unless the security check has been completed, this time should be considered ‘working time’ and therefore paid in accordance with the national minimum wage provisions.”
Furthermore, Sports Direct workers are docked 15 minutes of pay for clocking in as little as one minute late – even if they have arrived on the site on time. Conversely, staff are not paid extra for clocking out late, even when they have been finishing a job.
Literature handed to one of the reporters by The Best Connection employment agency, used by Sports Direct, said: “If you do not clock in by your shift start time then you will be recorded as LATE for that day and your hours and pay will be reduced by a minimum of 15 minutes.”
Lagadec added that docking 15 minutes of pay for clocking in slightly late is “arguably a breach of the national minimum wage, which carries both criminal and civil sanctions”.
The legal basis of her views was also confirmed to the Guardian by an employment law barrister at one of London’s top legal chambers.
The Guardian’s undercover reporters were employed during November by the two main agencies used by Sports Direct to supply temporary warehouse staff – Transline Group and The Best Connection.
Menial tasks, nine hours a day: inside the warehouse
The Best Connection worker was docked 15 minutes’ pay after arriving at the warehouse on time, but clocking in about five minutes late. Meanwhile, the Transline worker was not paid extra after clocking off five minutes later than the official end of the shift, when he had been finishing a job.
Sports Direct staff scared to take time off with sick children, teachers claim
Overall, the reporters’ pay was 3% lower than it would have been without the penalty and including the time spent on the retailer’s compulsory searches. It averaged about £6.50 an hour over all the shifts the reporters worked in November.
Other workers also confirmed that these practices were longstanding and commonplace. If calculated over the whole workforce, the savings would amount to millions of pounds on the annual wage bill of a warehouse, where up to 5,000 workers are thought to report for work each day. At busy times, wages have hit £1m a week within the facility, which is currently being almost doubled in size.
A Transline spokesperson said: “We do not breach national minimum wage legislation. Like many other retail warehouse operations throughout the UK, Shirebrook also has a policy of searches for all warehouse employees, office staff, senior management, directors and visitors. As with all policies, these are constantly under review. The searches are conducted in accordance with employment contracts and are completed as quickly as possible.”
He added that docking 15 minutes’ pay for being one minute late was “not standard procedure”.
Sports Direct said the Guardian’s findings contained “inaccuracies” but declined to comment further. The Best Connection agency declined to comment.
Unite union members dressed as Dickensian workers protest against zero-hours contracts outside Sports Direct. Facebook Twitter Pinterest
Unite union members dressed as Dickensian workers protest against zero-hours contracts outside Sports Direct. Photograph: Matthew Taylor/Rex Shutterstock
Luke Primarolo, regional officer at the union Unite, said: “HMRC needs to urgently investigate what looks like a breach of the minimum wage. The majority of these workers are on precarious agency contracts, which while not illegal, make it virtually impossible for them to challenge unfair treatment for fear of losing their job. The culture of fear at Sport Direct’s Shirebrook depot is more akin to a workhouse than a FTSE 100 company. It needs to change with agency workers being given permanent contracts by Sports Direct and paid a decent wage.”
The findings that Sports Direct workers are receiving less than the minimum wage follows recent controversy over redundancies at one of Sports Direct’s fashion chains, USC.
In October, Sports Direct’s chief executive, David Forsey, pleaded not guilty to a criminal charge of failing to give 30 days’ notice for redundancies at the subsidiary. The case’s next hearing is scheduled for the spring.
Frances O’Grady, general secretary of the TUC, said: “It will surprise no one that Sports Direct is hitting the headlines for the wrong reasons again. All workers should be paid at least the minimum wage for every minute they are required to be on company premises. If the allegations against Sports Direct are found to be true, the government must make sure all their staff receive the full pay they are entitled to.”
A spokesperson for the Department for Business Innovation and Skills said: “We are determined that everyone who is entitled to the national minimum wage receives it. HMRC investigates every complaint made to the Acas helpline. In addition, HMRC conducts risk-based enforcement in sectors or areas where there is a higher risk of workers not getting paid the legal minimum wage.”
More than one in ten (11 per cent) workers who have attended a work Christmas party admit embarrassing themselves in front of their boss, according to new polling published by the TUC today (Monday).
The poll, carried out for the TUC by YouGov, also reveals that two in five (40 per cent) employees who have attended a work Christmas party have got drunk at their work Christmas do, with men (45 per cent) more likely to over-indulge than women (35 per cent).
The survey finds that, of those who have attended a work Christmas party:
• One in 11 (9 per cent) workers has thrown up.
• One in 12 (8 per cent) employees has revealed something embarrassing about themselves to a colleague.
• More than a quarter (27 per cent) of 18-24 year-olds have had a dance off with a co-worker, compared to only 8 per cent of workers aged 25-39, 4 per cent aged 40-49 and 3 per cent who are 60 and over.
The polling comes as the TUC it publishes its tips for a fuss-free festive bash today. For many the work Christmas party is a chance for workers to let their hair down over a few drinks with their colleagues. But every year trade union reps get reports of problems at Christmas parties that could have been avoided with a little planning and forethought.
To make sure the Christmas party is remembered for all the right reasons, the TUC makes the following suggestions to employers:
If you’re going to charge staff to come to the party, make sure it’s something all staff can afford, and don’t make people feel bad if they don’t want to come along. Whilst some staff will be happy to pay more for an extravagant celebration, it may be better to scale it back a little so everyone can enjoy it.
Ensure there are plenty of non-alcoholic drinks available for people who don’t drink and those wanting a break from the booze.
The Christmas party isn’t the right time for managers to start talking about staff performance or other serious HR issues – keep it light and friendly.
Look into travel arrangements so that everyone gets home safely. If you can, think about laying on transport home or at least provide the times of the last train and phone numbers for reputable local cab companies.
Staff also have a big part to play in ensuring Christmas festivities go well. To make sure you make the most of the chance to let your hair down with your colleagues, the TUC suggests that workers:
• Resist the temptation to complain about colleagues or ask your boss for a pay rise. Save these big conversations for office hours!
• Be careful not to say or do anything which upsets or insults anyone if you are emboldened with ‘Christmas cheer’.
• Resist posting embarrassing pictures of your boss or your colleagues on Facebook and Twitter.
• Consider booking a day’s leave after the party if you think you may be too tired to work.
TUC General Secretary Frances O’Grady said: “Christmas parties are a great way to celebrate a year’s hard work and let your hair down with colleagues.
“However, workers and bosses need to remember that they are still in a work setting. No one wants to make a fool of themselves in front of colleagues – or worse, do something that will get them sacked at Christmas. Use your common sense and have a happy and safe night.”
NOTES TO EDITORS :
– All figures, unless otherwise stated, are from YouGov Plc. The total sample size was 1,695 adults, of which 1,406 had been to a work Christmas party. Fieldwork was undertaken between 25 and 26th November 2015. The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).
– All TUC press releases can be found at www.tuc.org.uk
– Follow the TUC on Twitter: @The_TUC and follow the TUC press team @tucnews
- Most workers are legally entitled to 5.6 weeks paid holiday per year (this is known as statutory entitlement).
- Part time worker are entitled to the same amount of holiday (pro rota) as full time colleagues.
- Employers can set the times when workers can take their leave – for example a Christmas shut down.
- If employment ends workers have the right to be paid for any leave due but not taken.
- There is no legal right to paid public holidays.
Once an employee starts work details of holidays and holiday pay entitlement should be found in the employee’s written contract, where there is one, or a written statement of employment particulars given to employees by their employer.
Note: The written statement is required by law and must be given to employees by the employer no later than two months after the start of employment.
Most workers – whether part-time or full-time – are legally entitled to 5.6 weeks of paid annual leave. Additional annual leave may be agreed as part of a worker’s contract. A week of leave should allow workers to be away from work for a week – i.e. it should be the same amount of time as the working week. If a worker does a five-day week, he or she is entitled to 28 days leave. However, for a worker who works 6 days a week the statutory entitlement is capped at 28 days. If they work a three-day week, the entitlement is 16.8 days leave. Employers can set the times that workers take their leave, for example for a Christmas shut down. If a worker’s employment ends, they have a right to be paid for the leave due and not taken.
There is no legal right to paid leave for public holidays; any right to paid time off for these holidays depends on the terms of a worker’s contract. Paid public holidays can be counted as part of the statutory 5.6 weeks of holiday.
Carrying leave over from one leave year to the next
Workers must take at least 4 weeks of statutory leave during the leave year, they may be able to carry over any remaining time off if their employer agrees. So if a worker gets 28 days of holiday, they may be able to carry over up to 8 days. Workers who receive statutory leave don’t have an automatic right to carry leave over to the next holiday year, but employers may agree to it.
Workers who are entitled to contractual leave may be able to carry over time off if the employer agrees, this agreement may be written into the terms and conditions of employment. For example if an employee gets 35 days of leave the employer may allow them to carry over up to 10 days as part of the terms of employment.
When workers are unable to take their leave entitlement because they’re already taking time off for different reasons, such as maternity or sick leave, they can carry over some or all of the untaken leave into the next leave year. An employer must allow a worker to carry over a maximum of 20 days if the worker is off sick and therefore unable to take their leave.
In the Employment Appeal Tribunal case of Plumb v Duncan Print Group Ltd 2015 the Tribunal held where an employee chooses not to take statutory annual leave during sick leave, they can carry forward the untaken leave for up to 18 months from the end of the leave year in which the leave arises. This means that if a leave year ends on the 31st December the worker would have 18 months after that date in which to take the annual leave for that year.