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Labour says to renationalise UK railways in "first term" if elected

25th Apr 2024 12:09

(Alliance News) - The opposition Labour party has pledged to renationalise the UK railways if elected, with the shadow transport secretary saying that "today's broken model simply doesn't work".

A Labour government would expect to transfer the 10 remaining privately run rail networks to public ownership "well within the first term" by folding existing private passenger rail contracts into a new body as they expire, Louise Haigh said at a launch event.

Kicking off her announcement at Trainline PLC headquarters in central London, the shadow transport secretary said the UK deserves "to be proud" of its rail legacy.

She added: "But under the Conservatives, our railways have become a symbol of national decline – of a country that no longer works, and a Government with no plan to fix it.

"Cancellations are at record highs, fares have risen almost twice as fast as wages since 2010, and strikes are costing GBP25 million a day."

Haigh said the plan was "fully costed".

She said that under the plan, the taxpayer would save GBP2.2 billion annually, but said she did not have agreement from Shadow Chancellor Rachel Reeves that all of those savings could be invested back into the railways.

The government's own proposals for rail reform, published in a draft Bill in February, include the creation of a new public sector body named Great British Railways to hold responsibility for rail infrastructure and awarding contracts to operate trains.

But a Labour government would create a publicly owned version of GBR led by rail experts rather than Whitehall.

"We will establish Great British Railways – a single, directing mind to control our railways in the passenger interest," Haigh said.

"Yes, we are keeping the name. I'm afraid I was overruled on calling it Rail Britannia."

The shadow transport secretary said it was Labour's ambition to make fares more affordable.

Haigh said: "I can't today set out that we will lower fares, not least because they are incredibly complex and regulation needs reform as well.

"But we have said that we will simplify them, that we will make them more accessible, more transparent and more trustworthy for passengers."

Labour also plans to establish a watchdog, the Passenger Standards Authority, to hold GBR to account.

The government estimated in its 2021 reform plan that it could save GBP1.5 billion annually after five years by ending inefficiency and fragmentation.

Labour says, citing its own analysis, that transitioning to public ownership could save money by cutting out franchise bidding costs, reducing the duplication of resources and lessening friction between operators.

The party also plans to bring in automatic delay and cancellation refunds, make digital season tickets available on all networks, and make timetables, tickets and fares more integrated.

It also proposes moving mobile service on trains towards 5G, improving the integration of rail travel with bus and cycle hire services and introducing a best-price guarantee.

Labour's plans are unfunded and leave questions open about how much rail renationalisation will cost taxpayers, a minister claimed.

Defence minister James Cartlidge told Sky News: "Privatisation led to a doubling of the number of people using our railways. It has been a significant success story, huge investment from the private sector.

"But as I said, if that investment hadn't come from the private sector it has to come from somewhere, and it would have to come ultimately from taxpayers.

"I think that is the key question about this policy: How much is it going to cost taxpayers? At the moment it is unfunded."

The government's reform plans were based on recommendations from a review carried out by former British Airways chief executive Keith Williams.

Williams said of Labour's plans: "I welcome Labour's intention, if they are elected, to take forward the substance of my recommendations to deliver a better railway for passengers and freight by creating a rail body with an integrated profit and loss account, at arm's length from government."

Mick Whelan, general secretary of Aslef, said: "We have seen more positivity in this stunning Labour Party vision for rail than anything at any time from the Tories during their failed privatisation and subsequent incoherent rail reform programme.

"The Labour commitment delivers for the economy, for the taxpayer, for passengers, and for staff."

Mick Lynch, general secretary of the Rail, Maritime & Transport union, said: "Labour's commitment to bring the train operating companies into a new unified and publicly owned rail network is in the best interests of railway workers, passengers and the taxpayer."

He added: "This announcement however should be a first step to completely integrating all of our railway into public ownership."

Maryam Eslamdoust, general secretary of the Transport Salaried Staffs' Association, said: "Rail nationalisation will improve services, enhance safety, and prioritise the needs of passengers and workers alike.

"By bringing the rail network back into public ownership, we can ensure that profits are reinvested into improving infrastructure, upgrading rolling stock, and enhancing workforce conditions."

Andy Bagnall, chief executive at Rail Partners, an industry group of train operators and freight groups, said: "Train companies agree that change is needed for the railways, but nationalisation is a political rather than a practical solution which will increase costs over time."

Rail minister Huw Merriman criticised Labour's plans, claiming only the Tories had "a plan to continue investing record amounts in our rail network".

He added: "Labour have confirmed they would push forward with their pointless, unfunded rail nationalisation that will do nothing to improve train reliability or affordability for passengers.

"Just like their unfunded GBP28 billion-a-year decarbonisation promise, they don't have a plan to pay for the bill attached to their rail nationalisation. Without a plan to pay for this, it means one thing: taxes will rise on hard-working people."

Labour's plans would still leave a role for the private sector on Britain's railways.

Open access operators, such as Hull Trains and Lumo, will be able to continue to compete to improve the offer to passengers, the party said.

Labour also hopes to "crowd in" private investment to stimulate innovation in the rail sector.

SNP transport spokesman Gavin Newlands said: "This is just the latest in a long list of U-turns from Sir Keir Starmer, this time on his commitment to nationalise the railways.

"Instead of putting the national railway service in the hands of the people, as the SNP Scottish Government have done, Keir Starmer's Labour Party will instead increase private investment into another public service, just like their plans for the NHS."

Shares in rail ticketing booking platform Trainline traded 9.6% lower at 310.20 pence each in London on Thursday afternoon. FirstGroup PLC, which operates in the rail space through South Western Railway and Great Western Railway, fell 2.5% to 166.50p.

source: PA

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