Politics

Will Labour's plan to renationalise rail really work? And will it make train tickets cheaper?

Labour has pledged to renationalise nearly all passenger rail services within five years if it wins the next election

Great Western Railway train at Paddington Station

A file image of a Great Western Railway train at Paddington Station.

Labour has pledged to renationalise nearly all passenger rail services within five years if the party wins the next election.

Being a rail commuter in Britain in 2024 means enduring endless delays, routine cancellations and sky-high fares.

With a general election on the horizon, Labour is eyeing up the votes of these weary passengers by promising the “biggest overhaul to our railways in our generation”.

The party will establish Great British Railways (GBR), a public body that will absorb existing private contracts when they expire.

The policies – announced by shadow transport secretary Louise Haig today (25 April) – also include automatic refunds for delays and better internet connection on trains.

“Labour’s detailed plans will get our railways back on track; driving up standards for passengers, bringing down costs for taxpayers, driving growth and getting Britain moving,” Haig said.

So what do experts have to say? And could the plans fix our broken rail system?

Will Labour’s plans to renationalise the railways work?

Currently, the UK’s rail network is run by various private rail company franchises, each of which has a private contract with the government for a set period of time.

If Labour is elected, they have promised to absorb these franchises – such as Avanti West Coast, c2C, and Southern Rail – into a single unified operator. It will not nationalise rail freight companies and will still allow privately financed “open access operators”, such as Hull Trains and Lumo, to continue.

Renationalisation campaign group We Own It described the plans as a “a big win for passengers” – though they urged Labour to renationalise the trains themselves (known as rolling stock) too.

“Taking [trains] back into public ownership will go a long way toward enabling Labour to make the investments in our railway that are needed to make it work for passengers,” said Johnbosco Nwogbo, We Own It’s lead campaigner.

Ellie Harrison, founder of Bring Back British Rail, predicted that a reunified network would “simplify the system for passengers and provide a clearer line of accountability.”

Unions have also welcomed the policies, with Mick Lynch, general secretary of the National Union of Rail, Maritime and Transport Workers describing it as a “in the best interests of railway workers, passengers, and the taxpayer.” Mick Whelan, general secretary of Aslef called the policy “stunning” and “positive”.

Renationalisation is a very popular policy among the British public. According to the latest YouGov polling, 37% of people ‘strongly’ support it, and 32% ‘tend to support’ it. Meanwhile, just 2% ‘strongly oppose’ it and 7% ‘tend to oppose’ it.  Labour seem to assume – likely correctly – that it will be a vote winner.

The UK railway network was originally taken into public ownership in 1947 –  part of the same nationalisation drive that created the NHS. British Rail operated for 50 years, but suffered from delays and cost the government a lot of money.

In 1994, Conservative PM John Major divided up the network and allowed private rail companies to bid to run different franchises. He believed that private firms would increase efficiency through reducing costs and cutting waste.

But rail is a “natural monopoly”, says Colin Bamford, professor of transport and logistics at the University of Huddersfield. The very high costs of laying track and building a network prohibit the entry of a competitor company – so the company with the 7-10 year contract is the only company operating.

“I’m an economist, and most economists will tell you that railways are almost a privatisation too far. Even Margaret Thatcher pulled out of privatising them,” he said.

“Railways are a natural monopoly in the sense that it doesn’t make sense for there to be competition, running trains on the same railway… it should be run by one outfit.”

Rail expert Christian Wolmar has slammed the UK rail privatisation for creating a “system of pretend capitalism, which involved the fragmentation of a coherent but complex industry into a series of interdependent companies motivated by private profit rather than public service”.

The need to make profit disincetivises companies from investing in infrastructure. When private firms are profitable, their shareholders benefit, but when they fail, the taxpayer has to bailout the service – and many UK rail companies have already been taken into public hands.

“People don’t realise the extent that nationalisation has already happened,” said Bruce Williamson from RailFuture.

“Franchising is dead and buried,” he added. “The train operating companies run on a fixed price contract, and they do what the Department for Transport tells them to do. So they have very little room for manoeuvre themselves. They’re just sort of contractors running a nationally coordinated rail system.”

ScotRail, Welsh Railways, the East Coast Main Line, Transpennine, Northern, Southeastern and the Caledonian Sleeper are all already in public ownership. Railtrack failed in private hands so publicly owned Network Rail was created in 2002 to look after rail infrastructure and major stations.

Even the Tories support some level of streamlining. The government’s proposal for rail reform – published in a draft bill in February – includes the creation of a new public sector body named Great British Railways (GBR). The ‘guiding body’ would be responsible for rail infrastructure and awarding private contracts.

“The Tories will retain as much private sector involvement as possible,” said Williamson.

This is a bad idea, insisted professor Bamford.

“Rail is so important for our future transport sustainability that it’s wrong for it to be in the hands of profit-making companies,“ he said.

Will the policy bring down ticket prices?

Unfortunately, the high cost of maintaining rail infrastructure means that fare prices won’t necessarily fall that much.

“You can’t bet on that. It depends on what other restraints there are around government spending,” professor Bamford said.

If fares are to come down, the next government will need to commit to rail investment and to subsidising rail fares – a policy RailFuture has called for.

“There is sort of real hypocrisy on the part of the [current] government ­– they have frozen fuel duty for motorists for 12 years,” Williamson said.

“They can find the money to sweeten the deal for motorists, and yet when it comes to green transport they’re continuing to shaft the traveller.”

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