Labour promises rail nationalisation within five
years of coming to power
Party pledges to bring all passenger rail – but not
rolling stock – into public ownership as contracts with train operators expire
Jessica
Elgot and Gwyn Topham
Wed 24 Apr
2024 22.30 BST
Labour will
fully nationalise the train network within five years of coming to power, with
a pledge to guarantee the cheapest fares as part of “the biggest reform of our
railways for a generation”.
One of
Labour’s first major acts in government will bring all passenger rail into
national ownership under Great British Railways as contracts with private
operators expire, a plan endorsed by the architect of the Conservatives’ own
rail plan.
Labour will
announce it plans to cut waste and claw back shareholder dividends, saving
£2.2bn. It will establish a watchdog, the Passenger Standards Authority, to
scrutinise the new system. Passengers will be offered best-price ticket
guarantees, automatic delay repay and digital season tickets across the
network.
In a speech
on Thursday, the shadow transport secretary, Louise Haigh, will say
renationalisation “is not going to be easy and it will take hard graft, but it
will be my mission to get us to the right destination and to deliver for the
Great British passenger”.
Labour
insiders hailed the announcement as the moment the party would begin to
champion its more radical proposals in the run-up to an election campaign,
after a number of U-turns including over green investment.
They said
Haigh’s plan was a key plank to counter the narrative that Labour had only
meagre plans for reform, alongside policies on workers’ rights and planning.
“We will
show we will make bold policy changes where the current settlement is failing,”
a Labour source said. “But this is not just ideology, this is a detailed plan
for reform.”
Haigh will
bill rail reform as crucial to productivity and cost savings and to achieve
Keir Starmer’s “five missions”, while criticising Conservative inaction.
“It is
passengers who pay the price, through being stranded because of cancellations,
through being unable to work as they travel because there’s no internet,
through overcrowded and unpleasant trains,” she will say.
“And they
also pay through the nose to prop up this failing system, with huge amounts
wasted every year through today’s inefficient and fragmented rail network, and
even more money leaking out to pay shareholder dividends.”
However,
the plans do not include nationalisation of privately owned freight or rolling
stock companies, which trade unions have called for but which would cost
billions.
The party
will argue that the public ownership plans will cost nothing in compensation to
operators, who would transfer ownership once contracts expire, and save
significant sums on bureaucracy and dividends to private operators.
Haigh, one
of the most left-leaning remaining members of the shadow cabinet with close
links to the unions, has been able to protect her renationalisation policy
despite intense lobbying efforts to water it down.
The party’s
new costings, shared with the Guardian, suggest full public ownership would
save £2.2bn every year after five years, including the £1.5bn identified in the
government’s own review from 2021 that said the simpler structure of Great
British Railways would make operations cheaper.
Labour
estimates that consolidating the 14 separate train operating companies (Tocs)
could reduce additional waste worth up to £680m a year, including saving
dividends to Tocs’ shareholders and eliminating bidding costs.
A range of
rail industry figures welcomed Labour’s announcement, although private train
firms were dismayed at confirmation that train operating contracts would be
taken back into public hands as contracts expired.
That pledge
was strongly backed by the leader of the train drivers’ union Aslef, which on
Tuesday announced a fresh set of strikes. Mick Whelan, its general secretary,
said: “The commitment delivers for the economy, for the taxpayer, for
passengers and for staff,” adding that privatisation had “allowed a few
companies to make enormous profits, which have taken much-needed money out of
the sector”.
Keith
Williams, who co-wrote the Conservative government’s Williams-Shapps plan for
rail after the 2018 timetabling fiasco, said Labour’s plan would follow through
on the “substance” of his recommendations to the government.
“Running a
better railway and driving revenue and reducing costs will deliver economic
growth, jobs and housing by delivering better connectivity,” Williams said.
Labour
underlined that it would not extend renationalisation to the ownership of the
actual trains, as urged by unions including the RMT, by publicising an
endorsement by Mary Grant, the highly paid chief executive of the rolling stock
leasing firm Porterbrook. She said it welcomed “the party’s commitment to
leverage private capital to help deliver its long-term strategy for rolling
stock”.
The pledge
to make railways reform an early priority was welcomed by Darren Caplan, the
chief executive of the Railway Industry Association, which represents
suppliers. He said: “[It] would give certainty to our members about the future
structure of the railway industry.”
Private
train operators, however, argued that nationalisation was “a political rather
than a practical solution which will increase costs over time”. Andy Bagnall,
the chief executive of Rail Partners, which represents Tocs, said the kind of
contract model used by Transport for London’s rail network or Manchester’s
buses was the “best of both worlds”, adding: “Ejecting private train companies
from the railway will create a prolonged and messy transition at a time when we
need all parts of the railway to pull together.”
A Labour
source dismissed that proposal, saying: “We are making the case for a
simplified railway. It saves a huge amount of money, waste and duplication. We
don’t have to replicate the worst elements of the franchise model with none of
the benefits.”
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