Rolling coverage of the day’s political developments as they happen, including Theresa May and Jeremy Corbyn at PMQs
During his Commons statement Chris Grayling, the transport secretary, and a leading figure in the Vote Leave campaign, repeatedly said that Labour would not be able to implement its plans to nationalise the railways under EU rules. After one Labour MP challenged him to renationalise the rail network, he replied:
What they [Labour] are proposing is illegal under European law.
The EU has a policy that prevents a national railway monopoly, but this is to make sure a pan-European freight network thrives, which is something Labour supporters would probably back. Most European countries have a nationalised railway system.
French president Emmanuel Macron recently nationalised a shipyardjointly owned with an Italian rival to prevent the domestic firm losing control. He was able to press ahead with his protectionist measure under Maastricht and Lisbon Treaty rules that leave room for policy objectives for which state aid can be considered compatible.
As a cursory glance at state-owned railways all over Europe will confirm, ownership is not a problem. Most European countries have state-owned railways. The UK is the exception, not the rule. It is true that EU law requires that infrastructure (rails, stations, etc.) be separate from the train services using them, but both can be publicly-owned or controlled, as they are in many EU countries. Railway companies from other EU countries, such as those operating services between Ireland and Northern Ireland or to and from the continent through the Channel Tunnel, are also entitled to offer services within the UK if they meet certain conditions. There is no reason why the UK could not bring private rail companies back into public ownership as their franchises expire.
Well substantiated mythbuster: EU rules do not stand in the way of public ownership of enterprises, nor do they hamper provision of public services. https://t.co/xwfmYSsvv3
Public service contracts for public passenger transport services by rail should be awarded on the basis of a competitive tendering procedure, except for those cases set out in this Regulation.
The UK’s island geography does make the merits of cross-border passenger rail services far less obvious than they can be on the continent. Nonetheless, the EU’s fourth rail package requires companies to competitively tender for rail passenger services everywhere in the EU, including in the UK. However, this does not prevent a bidder from being state owned. There are likely to be substantial economies of scale and scope which mean that a nationalised company would usually have a bidding advantage. In addition, the state can set quality, social and labour standards that state owned companies may in practice be better able to meet. Competitive tendering began in German passenger rail in 1996, twenty years earlier than required by the EU rules, but Deutsche Bahn, the state owned rail operator, still has over 75% market share (and its main competitors are regional operators owned by local German government). There is also nothing to stop a British government from nationalising any company winning a bid if it turned out not to be the already state owned company.
Under the new rules, it will be technically possible to have a state monopoly on rail, if rail franchises are subject to competition and state-controlled bodies manage to win every contract.
But under this system, the government could comply with the new legislation but be caught out by EU state aid rules, which happened to the French government when it tried to maintain a state monopoly on rail.
In the Commons MPs are now debating a Labour motion on the Grenfell Tower fire which, among other things, calls upon the government to honour its promise to permanently rehouse all the survivors by 14 June, the first anniversary of the disaster.
James Brokenshire, the new housing secretary, told the Commons that not all survivors would be rehoused within 12 months. As the Press Association reports, he said of the 210 households in need of a new home, 201 have accepted offers of temporary or permanent accommodation. Of this number 138 have moved in, 64 into temporary accommodation and 74 into permanent accommodation. Brokenshire said:
While progress has been made, there is no question that this has been too slow. As a result, some households will still be in emergency accommodation in June.
It was always going to be a challenge to respond to an unprecedented tragedy on this scale, it has taken time to purchase suitable homes, adapt and refurbish them to meet people’s needs and the higher safety standards, but this is clearly not good enough.