The whole debate about Open Access operation, which has been simmering away quietly virtually since the passage of the 1993 Railways Act, has been reignited in recent weeks by Department for Transport’s failed attempt to stop the grant of train paths to a new open access operator, Grand Northern, and by Virgin’s aborted attempt to scupper last year’s new entrant, now running between Wrexham and London Marylebone.

Apparently, the Department called on the Office of Rail Regulation not to grant the paths on the grounds that this might prevent National Express East Coast (NXEC) from fulfilling its obligations under its franchise agreement to run extra trains on the East Coast Main Line. The Department weakened its own case, however, by adding that the running of these trains was necessary to enable NXEC to fulfill its obligations (in the form of very large premium payments) to the Government. To the government, note, not to passengers.

The extra trains were required under the so-called Service Level Commitment 2 timetable, originally planned to start in December 2010, under which five paths per hour in the off-peak would be allocated to the NXEC – one more than the current service.

It was envisaged that the fifth path would enable a service to be run hourly from King’s Cross to Newark and thence alternately to York and Lincoln. These extra services would pick up the existing intermediate stops on Leeds and Edinburgh trains at Stevenage, Grantham, Newark and Retford, so enabling long distance passengers to benefit from faster journey times. Effectively, this means that NXEC ought to be able to run from York or Leeds to London with only one stop (either Peterborough or Doncaster).

On the face of it, this is a very sensible proposal, and would deliver significant benefits to existing longer distance passengers, as well as enabling the railway to compete more effectively with the airlines in the key Newcastle and Edinburgh markets, so generating extra passengers for the East Coast Main Line. And of course any switch of airline passengers to the trains is likely to deliver environmental benefits too, especially if the number of flights is cut as a result.

On the other hand, the Grand Northern proposals – sitting alongside the existing open access services from Sunderland and Hull into London – could also be expected to bring significant benefits to the communities they plan to serve. The proposal would see extra trains between Bradford and London – a market effectively abandoned by GNER and subsequently NXEC. It would also see the operation of through services between Huddersfield, Halifax and King’s Cross for the first time for many years.

As existing open access operators – particularly Hull Trains – have proved, the delivery of locally focused, well-marketed through services is very capable of attracting new traffic to the rail network in considerable numbers. Sufficent indeed for the service to become profitable and contribute to the overheads of running the network as a whole very quickly.

The trick seemed to be in the process of being repeated with the new venture linking Wrexham and Telford with London Marylebone launched last year, and also with the Grand Central service from Sunderland and Hartlepool – which now seems to have recovered from its very shaky start and is reportedly doing very well – or at least as well as could be expected in the current economic climate.

Seeing the success, Virgin signalled its intention to re-enter the market for through services between London and Shrewsbury, which it restarted in 1998 but abandoned once more in 2001. Interestingly, the adverse public reaction to their proposal was so strong that Virgin quickly reversed its stance and retreated back to Wolverhampton. It was most amusing to see the “tiny” Wrexham and Shropshire (in reality a subsidiary of the German State Railways, hardly a minnow in the public transport market) portrayed as a victim of the railway “giant” Virgin – and no doubt the Wrexham and Shropshire has benefitted enormously from the positive PR it obtained during the row, including several long and overwhelmingly positive articles in the national press.

This in itself illustrated neatly the schizophrenia that the press suffers from when reporting the rail industry – lambasting BR, then excoriating the whole idea of privatisation, and breaking up the state monopoly, but then suddenly warming to this “little” train operator setting out to provide a niche service and to make a profit.

In truth, though, this split personality attitude towards open access services typifies the whole confused and contradictory approach taken to this subject by the rail industry and by government,.

In any situation like the East Coast row, the situation faced by the Regulator and Network Rail is a difficult one. On the one hand, we have the EU legislation requiring the progressive development of open access to the rail network, whilst on the other hand we have the Department for Transport and the franchised train operators lining up to defend their territory.

Meanwhile, because of the progressive changes in legislation since 1997, the Department for Transport has moved steadily from a role as umpire and commissioner of services through a hands-off body such as OPRAF to a much more active role – possessing, as one manager remarked in the wake of the 2005 Act, more power to direct the day to day operations of the railway than Ministers even possessed during the two world wars.

As a direct participant in the market place, and direct commissioner of its own services, DfT can oppose the implementation of legislation it signed in Brussels to promote competition on the railways – though how effectively remains to be seen in the wake of their defeat at the hands of ORR.

The grounds for opposition are contained in that wonderfully flexible phrase “in public interest”. This has, over the years, been used to defend oligiopolies and monopolies on the grounds of “eliminating wasteful competition” and then, within months, turned completely on its head to mean the promotion and delivery of as much competition as possible.

Nowhere is this more clear than in the bus industry, where the former was very much the position at the time of the 1930 Road Traffic Act. However, following enactment of the 1985 Transport Act, the definition of the public interest was turned completely on its head and was now about a consumerist agenda of which believes (wrongly) that you can drive bus fares down through competition.

In practice, neither definition of the public interest was wholly correct: and broadly it can be argued that in practice, the bus passenger’s best interests were served by neither. Some form of moderated competition between 1930 and 1980 would no doubt have done the industry some good, whilst the development of partnerships and joint working were quite clearly in the public interest after 1985, even though it took everybody 15 years to convince Whitehall of this.

This may seem like a digression from open access rail operations, but the analogy is an important one. In fact, it is not possible to come up with one definition of “the public interest” in this situation, because it depends what role the public is playing at the moment its interests are allegedly being defended. For instance:

• Public as taxpayer, where the extraction of substantial premium payments from profitable train operators reduces the cost of the unprofitable ones, and so keeps taxes lower.

• Public as consumer of existing services on the East Coast, where faster and more frequent trains will clearly be seen as a “good thing”; at the same time, though, the premiums being extracted from NXEC are in effect a tax on those passengers, forcing fares on the route to be higher than they would otherwise need to be.

• Then there’s the public as potential consumers of new open access train services: if there are sufficient of them, then they are quite clearly benefitting from improved travel opportunities and better accessibility to shops and other trip attractors such as colleges, universities or business destinations.

• Next, there’s the public as potential victims of climate change and global warming: the extent to which new open access rail services can deliver modal shift from private to public transport, there will be benefits here too (provided that the rolling stock is efficient and the services well used)

• And finally there is the public as residents of those areas who might benefit from the economic benefits and regeneration opportunities provided by the new services. Rightly or wrongly, through trains to London are perceived by the public and by local authorities as an important driver, putting their communities “on the map”, and improving economic growth and competitiveness.

The solution to this must lie in another look at the way we organise and run our passenger rail services in the UK. The subtleties of these different interests – all of them “public interests” – need to be considered in a much more open and effective way than has hitherto been the case; in truth the ORR has done a good job here, being a determined defendant of its independent role and its remit under the law. However, the confusion over policy at the heart of Government has caused problems.

For example, its decision over paths for Grand Central resulted in a legal challenge from the then incumbent train operator GNER, though this was defeated. Though the defeat was correct, one could not but have some sympathy for GNER’s case, which was based on the lack of a level playing field between franchised and open access operators.

In truth, though, the problem was not the fact of the competition, but the DfT’s refusal to take it into account in the original franchise bid or any subsequent renegotiation. GNER’s complaint was that it was obliged to pay both fixed and variable track access charges and then a substantial premium to the Government for the right to run the service. This compared with the open access operators like Grand Central, Hull Trains and the Wrexham & Shrophire, who pay only the variable access charge, and make no premium payment, no matter how much profit they make.

At the other end of the argument, the protection from competition included in some franchise agreements means that, even where open access operators are allowed to run, they are subject to stopping restrictions. The Wrexham & Shropshire trains, for example, pass through major centres such as Banbury, Leamington and Wolverhampton but have either to miss the stops altogether or have to observe silly (and ultimately unenforceable) picking up and setting down restrictions.

We have to deal with these anomalies alongside the other reforms to the rail franchising process which a new Government is going to have to introduce – to meet the recommendations of the Competition Commission on the rolling stock leasing market, to encourage more investment by TOCs and to maintain the momentum of innovation and change. In short, it really is time to denationalise the railways – and I will return in future articles to what this means and how it might be achieved.