[
Labour has pledged to fully nationalise the train network within five years of coming to power as part of “the biggest reform of our railways for a generation”.
It plans to bring all passenger rail into national ownership under Great British Railways (GBR) if the party enters government, with passenger rail firms taken over as existing contracts when private firms expire.
Labour has said the legislation will be included in its first King’s Speech in power but it could take many years, however, for the changes to be fully enacted and for passengers to start seeing changes as some contracts do not expire until around 2030 and beyond.
What does nationalising the railways mean for taxpayer money?
Labour has claimed that the current fragmented set-up of the rail system is increasing costs, and that streamlining the process will save the taxpayer money.
“Huge sums continue to be wasted on management fees and shareholder dividends,” shadow Transport Secretary Louise Haigh said on Thursday.
“And despite 30 years of privatisation, shockingly, it is the taxpayer who still props up our failing railways to the tune of billions every year.
“The failure to fix the crisis on our railways could be costing the public as much as £2.2bn a year.”
The 2021 Williams-Shapps Plan on railway reform estimated that changes to make the network more streamlined could save £1.5bn annually after five years by ending inefficiency and fragmentation.
But Labour has claimed its internal analysis suggests their measures could save an additional £680m a year after five years on top of the £1.5bn, taking the total to £2.2bn.
The party has not stated how it reached the £680m figure, and it is also unclear what the costs or savings of the changes would be in the expected five years they take to implement.
Will nationalising the railways bring down ticket costs?
Labour has stated the changes will not necessarily bring down ticket costs immediately, but it aims to bring in measures to ensure passengers get the best deal when they travel.
This will be done through automatic refunds for delayed or cancelled journeys and “a best-price ticket guarantee” ensuring passengers automatically pay the lowest possible amount for tickets when making contactless payments.
The proposals will be backed by a new consumer watchdog, called the Passenger Standards Authority, will also be established to hold GBR to account and deliver improved outcomes for rail users.
The Government has also previously stated an ambition to simplify the ticketing for railways, with around 55 million variations thought to be on offer.
But Andy Bagnall, chief executive of Rail Partners, which represents train companies, told BBC Radio 4’s Today programme that the changes could lead to a future increase in ticket costs.
“We believe that without that commercial focus, costs would creep up over time, revenue growth will be slower and the taxpayer is the one that loses out.”
Rail industry figures have warned that nationalising rail for the first time in 30 years will be fraught with difficulties and unintended consequences that could lead to a poorer service for passengers and major costs to the taxpayer.
A senior figure in the rail industry told i: “We need to understand how bringing them all into public ownership will drive the best benefits for passengers and the taxpayer. I can see the point that if we go back to a British Rail-type model, then costs may escalate.
“Many people in the industry would prefer to see a public-private blend. And we need to understand how public-sector passenger operations will work together with private-sector freight services.”
How long could it take for ticket prices to fall?
There are concerns that the full roll-out of these pledges is unlikely to be possible until all the rail franchise contracts expire and are brought under public control by around 2030 and when the different rail networks can be aligned.
This means that any ticket-price guarantee, for example, could not be implemented in full until the entire network had been taken back into public control. Labour sources added that such a policy was an “ambition” rather than a firm promise.
However, leading transport commentator Christian Wolmar told i that Labour could bring in the fare reforms sooner by making the changes through the Office of Rail and Road.
“They could do it quite quickly. The fares are changed once a year in January, they can be changed twice a year. It could be a matter of months.”
He also said that you would not necessarily need to wait for contracts to expire, as they could well negotiate them to end sooner: “When the private operators see the way the wind is blowing, they might be quite happy to end these contracts anyway. So I think the process might be speeded up as a result of that.
“Some of them might throw the towel in. They might think: ‘We can’t be bothered with this. We’ve got a fairly hostile government, that’s hostile to this type of operation. We would be better off just negotiating the end of the contract.’ I think that’s quite likely as the process goes on.”
