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Here's the real reason we can't renationalise the railways

Jeremy Corbyn and Andy Burnham have both pledged to renationalise the railways - but we can't do that while we're in the European Union, says Kate Hoey. 

As we approach the end of Labour’s leadership contest one of the most interesting things about the last few weeks has been the resurgence of policy ideas that many had thought Labour had confined to the rubbish bin.

Take the nationalisation of the railways. When Ed Miliband was the leader of our party, efforts to put immediate renationalisation in the manifesto were thwarted. One year on, and both Andy Burnham  and Jeremy Corbyn have promised to renationalise Britain’s railway network.  The debate has certainly shifted left, but could either Andy or Jeremy deliver on such a promise? I’m not so sure, as neither candidate have said how they would address the big obstacle that their promise faces: the European Union.

Undoubtedly EU law will be a huge obstacle to any renationalisation scheme – especially one that aims to do away with competition and markets. The EU is clear that its objective is “Opening up national freight and passenger markets to cross-border competition”. Its directives and regulations have created what can only be described as a legal quagmire.   

The main EU law in this area was the First Railway Directive (which was replaced and upgraded in 2012 with a new version). This was the original law that gave the Tories the excuse they needed to introduce their privatisation agenda in the nineties. That law enshrined the role of the private sector by making it a legal requirement for independent companies to be able to apply for non-discriminatory track access on a member state's track, calling for:

“separating [of] the management of railway operation and infrastructure from the provision of railway transport services, separation of accounts being compulsory and organizational or institutional separation being optional.”

The 2012 Directive has kept that principle and goes even further, and says that one of its aims is "to boost competition in railway service management". It also stipulates that: "Greater integration of the Union transport sector is an essential element of the completion of the internal market... The efficiency of the railway system should be improved, in order to integrate it into a competitive market".

In short, this means that multiple train operating companies must be allowed to use the same track competitively. In Germany it has resulted in the state-owned Deutsche Bahn facing more and more competition from other firms.

Provisions like this mean that, under Prime Minister Burnham or Prime Minister Corbyn, there would be huge legal obstacles in the way of renationalising the railways. How will any effort to block private operators be compatible with EU competition law, for example?

Some claim that “European rules do not dictate that railways must be fully privatised” – note the interesting use of the word “fully”. It’s true that UK law has gone further than the EU law currently requires, but it is also true that the EU would prevent a nationalisation agenda from going as far as many would like.

This is a problem that is only going to get worse with time. The EU is likely to pass even more laws in this area. Since 1991 the EU has introduced three railway packages, which have imposed numerous legal requirements on the member states. A fourth package is on its way – which will further open up domestic passenger services to competition. All of these laws limit a UK Government’s freedom of action and will bind the hands of a future Labour Government. 

It would be hyperbole to say that all efforts to renationalise the railways would be blocked by the EU, but it would be equally naïve to dismiss the problem. The facts are simple: the EU creates real legal problems for any nationalisation agenda and will bind the hands of a future Labour Government that attempts to deliver on such a manifesto policy. Honest politics demands detail: before they can give renationalisation a green light, we need to know exactly how the candidates plan to get the EU-shaped elephant off the tracks. 

Kate Hoey is MP for Vauxhall and co- chair of Labour for Britain.

 

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After a year of chaos, MPs from all parties are trying to stop an extreme Brexit

The Greens are calling for a cross-party commission on Brexit.

One year ago today, I stood on Westminster Bridge as the sun rose over a changed country. By a narrow margin, on an unexpectedly high turnout, a majority of people in Britain had chosen to leave the EU. It wasn’t easy for those of us on the losing side – especially after such scaremongering from the leaders of the Leave campaign – but 23 June 2016 showed the power of a voting opportunity where every vote counted.

A year on from the vote, and the process is in chaos. Perhaps we shouldn’t be surprised. The Leave campaign deliberately never spelled out any detailed plan for Brexit, and senior figures fought internal battles over which model they preferred. One minute Britain would be like Norway, then we’d be like Canada – and then we’d be unique. After the vote Theresa May promised us a "Red, White and Blue Brexit" – and then her ministers kept threatening the EU with walking away with no deal at all which, in fairness, would be unique(ly) reckless. 

We now have our future being negotiated by a government who have just had their majority wiped out. More than half of voters opted for progressive parties at the last election – yet the people representing us in Brussels are the right-wing hardliners David Davis, Liam Fox and Boris Johnson.

Despite widespread opposition, the government has steadfastly refused to unilaterally guarantee EU citizens their rights. This week it has shown its disregard for the environment as it published a Queen’s Speech with no specific plans for environmental protection in the Brexit process either. 

Amid such chaos there is, however, a glimmer of hope. MPs from all parties are working together to stop an extreme Brexit. Labour’s position seems to be softening, and it looks likely that the Scottish Parliament will have a say on the final deal too. The Democratic Unionist Party is regressive in many ways, but there’s a good chance that the government relying on it will soften Brexit for Northern Ireland, at least because of the DUP's insistence on keeping the border with Ireland open. My amendments to the Queen’s speech to give full rights to EU nationals and create an Environmental Protection Act have cross-party support.

With such political instability here at home – and a growing sense among the public that people deserve a final say on any deal - it seems that everything is up for grabs. The government has no mandate for pushing ahead with an extreme Brexit. As the democratic reformers Unlock Democracy said in a recent report “The failure of any party to gain a majority in the recent election has made the need for an inclusive, consensus based working even more imperative.” The referendum should have been the start of a democratic process, not the end of one.

That’s why Greens are calling for a cross-party commission on Brexit, in order to ensure that voices from across the political spectrum are heard in the process. And it’s why we continue to push for a ratification referendum on the final deal negotiated by the government - we want the whole country to have the last word on this, not just the 650 MPs elected to the Parliament via an extremely unrepresentative electoral system.

No one predicted what would happen over the last year. From the referendum, to Theresa May’s disastrous leadership and a progressive majority at a general election. And no one knows exactly what will happen next. But what’s clear is that people across this country should be at the centre of the coming debate over our future – it can’t be stitched up behind closed doors by ministers without a mandate.

Caroline Lucas is the MP for Brighton Pavilion.

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