Labour promises rail nationalisation within five years of coming to power

[Nicholas Lewis]

Front page on several of tomorrows papers

https://www.theguardian.com/politic...lisation-within-five-years-of-coming-to-power

This is in advance of key speech by Lousie Haigh tomorrow

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.

Sounds like no role for private operators going forward but ROSCOs remain. Personally OLR can't be the long term solution though and hopefully we will now get something closer to vertical integration.

 

[HullRailMan]

the same Labour Party that is planning no significant increases in taxes or spending? Good luck with that.

 

[GrandCentral]

A purely political plan unfortunately that will blow up in their faces when fares don’t fall and investment suffers. What is the future of Open Access operators under this plan?

 

[JonathanH]

What is the future of Open Access operators under this plan?

They have contracts which give them operating rights for the near term.

 

[HullRailMan]

They have contracts which give them operating rights for the near term.

Open Access to continue, as stated in this BBC article. Essentially the plan is to just have ‘franchised’ TOCs in state ownership.

Labour promises automatic refunds for train delays in railway plans https://www.bbc.co.uk/news/uk-politics-68889345

 

[JonathanH]

Labour promises automatic refunds for train delays in railway plans https://www.bbc.co.uk/news/uk-politics-68889345

...when buying tickets on a contactless system.

The party will pledge to deliver automatic refunds for delayed and cancelled journeys, better internet connection on trains and "a best-price ticket guarantee" ensuring passengers automatically pay the lowest possible amount for tickets when making contactless payments.

That has the hallmarks of the kind of fares reform RDG were going to work towards in any case.

 

[OneOfThe48]

Haigh has done an interview with the New Statesman suggesting that there would be some degree of consolidation of TOCs (named marketing, HR and IT) so could there be a move towards the BR regions of old?

Haigh argues that renationalisation would deliver “significant savings”: £700m in addition to the £1.5bn promised by the former transport secretary Grant Shapps from his limited reforms. “Some of that is obviously dividends and profits not going out to private shareholders or performance bonuses that won’t need to be paid out.

“Ours is a remarkably inefficient model – independent reports have said that it is 40 per cent less efficient than our European counterparts. It is such a fragmented and confused system. Every operator has its own marketing department, HR department and IT department. Those will be simplified into one body.”

From: www.newstatesman.com/politics/preparing-for-power/2024/04/louise-haigh-labour-manifesto-will-pledge-rail-renationalisation

 

[brad465]

If I was in charge of this policy in Labour I'd have held off announcing this until the election is called and parliament is dissolved. This is something the Tories could very easily sabotage while in government (i.e. extend all the TOC contracts beyond the end of the next parliament) and force Labour to u-turn simply for being undeliverable.

 

[HSTEd]

No, labour promise direct state control of passenger operations.

This is not really nationalisation, given that virtually the entirety apparatus of the "private" railway will have to remain intact.
It is extraordinarily unlikely that Labour will seek to sweep up the freight operators and the open access operators, and without doing so many of the savings/improvements that could be made cannot be made.

 

[Horizon22]

This is increasingly not actually that much of a difference to how things are currently operating (albeit it probably is in the public perception!) - I am presuming we are excluding ROSCOs for obvious capital expenditure reasons.

Ideally it's the "arms length" body as was vaguely proposed in GBR that actually does most of the day-to-day stuff.

 

[JonathanH]

It is extraordinarily unlikely that Labour will seek to sweep up the freight operators and the open access operators, and without doing so many of the savings/improvements that could be made cannot be made.

What savings and improvements are solely dependent on bringing freight and open access operators into public ownership?

 

[LNW-GW Joint]

At least it takes radical change off the agenda.
It sounds like a regionalised OLR setup with fewer moving parts.
Retaining rolling stock, freight and open access in the private sector means the present ORR-run access regime has to stay - GBR will not be a monopoly.
But GBR will be a tough ask with several regulators to satisfy as well as the Treasury and DfT.
Christian Wolmar was on Newsnight pontificating about the benefits of public ownership, but I bet the odd billion of savings will be hard to find.
Nothing much said about Network Rail in this, which it appears some people think is not already nationalised.

 

[HSTEd]

What savings and improvements are solely dependent on bringing freight and open access operators into public ownership?

I cannot really go into it without derailing the topic.
But mostly the problems resulting from benefits and costs of changes being spread across multiple actors, leading to an argument over who pays for everything.

Plus the entire Chinese Wall split of infrastructure and operators required to make privately held OAO and freight remotely workable

 

[Hadders]

Didn't Labour say they were going to renationalise the railways if they won the 1997 election?

I doubt we'll see anything too radical as a result of this.

 

[Recessio]

This seems like a good simple solution to me. No initial outlay as GBR will simply take over franchises as contracts expire, so no need to "buy out" remaining contracts. ROSCOs keep the rolling stock so private investment funds the huge initial costs of new trains, not tax rises. Open access operators like Lumo and Hull Trains are still allowed so GBR won't be a complete monopoly. Freight operating companies won't be touched. Seems very sensible and an easy win to cut down on fragmentation.

 

[HSTEd]

ROSCOs keep the rolling stock so private investment funds the huge initial costs of new trains, not tax rises.

Taxpayers pay in the end either way, except this way they pay more.
All it does is allow the Treasury to hide public borrowing as private borrowing and lie to the public about the state of the public finances.

Open access operators like Lumo and Hull Trains are still allowed so GBR won't be a complete monopoly. Freight operating companies won't be touched. Seems very sensible and an easy win to cut down on fragmentation.

It won't cut down on fragmentation, it will require pretty much the same level of fragmentation as now.

 

[Blindtraveler]

Well this has taken its time to come out, it's been a fairly major policy in their last three highly successful election manifestos and I just wonder how much of a difference it will make this time when we have industrial relations meltdown and a post pandemic railway compared to 2019

 

[eldomtom2]

Didn't Labour say they were going to renationalise the railways if they won the 1997 election?

I doubt we'll see anything too radical as a result of this.

I don’t know about statements made by politicians, but it definitely wasn’t in the manifesto:

• The process of rail privatisation is now largely complete. It has made fortunes for a few, but has been a poor deal for the taxpayer. It has fragmented the network and now threatens services. Our task will be to improve the situation as we find it, not as we wish it to be. Our overriding goal must be to win more passengers and freight on to rail. The system must be run in the public interest with higher levels of investment and effective enforcement of train operators' service commitments. There must be convenient connections, through-ticketing and accurate travel information for the benefit of all passengers.
  To achieve these aims, we will establish more effective and accountable regulation by the rail regulator; we will ensure that the public subsidy serves the public interest; and we will establish a new rail authority, combining functions currently carried out by the rail franchiser and the Department of Transport, to provide a clear, coherent and strategic programme for the development of the railways so that passenger expectations are met.

 

[HurdyGurdy]

Didn't Labour say they were going to renationalise the railways if they won the 1997 election?

The 1997 Labour manifesto offered better management of the then privatised rail network, more effective and accountable regulation, higher levels of investment and a new combined rail authority. They did not mention the 'N-word'.

In office they created the Strategic Rail Authority.

 

[Blindtraveler]

And also delivered highly successful no growth franchises like the original northern and a river trains Wales. Forgive me for my obvious cynicism that we will see anything transformationally radical this time except perhaps as mentioned in the opening post a great British railways rebrand which will largely involve lots of new signs, updates to uniforms and ticket wallets and maybe some spray paint on rolling stock as it comes up for renewal

 

[LUYMun]

...when buying tickets on a contactless system.

“The party will pledge to deliver automatic refunds for delayed and cancelled journeys”

That has the hallmarks of the kind of fares reform RDG were going to work towards in any case.

Sounds like contactless ticketing would need to progress nationwide to make automatic refunds possible. Otherwise it’d be tricky if one buys a paper ticket, breaks journey halfway and then gets delayed on second leg to a destination.

"a best-price ticket guarantee" ensuring passengers automatically pay the lowest possible amount for tickets when making contactless payments.

I hope this sounds better than what it says, as it gives me the impression that on-the-spot ticket purchasing would show the cheapest ticket without checking the details of said ticket. It could be an off-peak ticket during peak time for all I could know.

 

[thenorthern]

Sounds like Labour in the 1990s when they promised to nationalise the railways, did they? Well I suppose they nationalised South East Trains then privatised it again then they nationalised National Express East Coast. The also vehemently denied nationalising Railtrack PLC as Network Rail.

Given that the railways were the last major industry to be privatised by the 1979-1997 Conservative government it's as always the one people mention about nationalising the most.

 

[GRALISTAIR]

Didn't Labour say they were going to renationalise the railways if they won the 1997 election?

Yes

 

[railfan99]

Will there be standardised procurement of new railcars ("units") and other passenger-related equipment across the whole of England/Wales/Scotland/Northern Ireland, or just England, or a continuation of existing arrangements where operators (or in GBR's case, perhaps "regions") select their own?

 

[Energy]

Taxpayers pay in the end either way, except this way they pay more.
All it does is allow the Treasury to hide public borrowing as private borrowing and lie to the public about the state of the public finances.

No. If rolling stock is purchased in cash by the government, it must be funded via debt taken on via the Treasury. The interest rate at the Treasury is typically higher than available on the private market.

If leasing costs more, you wouldn't have seen TfW leasing its new fleets.

Will there be standardised procurement of new railcars ("units") and other passenger-related equipment across the whole of England/Wales/Scotland/Northern Ireland, or just England, or a continuation of existing arrangements where operators (or in GBR's case, perhaps "regions") select their own?

Unclear but I'd expect large framework contracts for certain types of units, e.g a large framework contract for 3-4 car multimode EMUs and another for commuter EMUs. The DfT is already moving towards this with the current Northern procurement being up to 450 units (not cars) with options lasting up to 8 years. This would allow the DfT/GBR to utilise the options across multiple TOCs.

Currently, Northern is undertaking this on behalf of the DfT and is also acting like an 'anchor tenant', with them providing an initial large order for good pricing.

 

[HSTEd]

No. If rolling stock is purchased in cash by the government, it must be funded via debt taken on via the Treasury. The interest rate at the Treasury is typically higher than available on the private market.

If leasing costs more, you wouldn't have seen TfW leasing its new fleets

Typically private sector capital rates are much higher than the debt on government bonds as the state is almost certainly not going to default. Whatever the Treasury notionally charges other public undertakings through the PWLB (Public Works Loan Board) isn't really important

(EDIT: The real rate of return on index linked UK government debt is 1% or below for terms of up to 20+ years)

The real reason leasing is popular is because it allows politicians to spend tomorrow's money today. It reduces apparent public borrowing today at the cost of much higher borrowing after the next election.

 

[Halwynd]

I welcome this wholeheartedly... and truly hope it doesn't turn out to be just election gimmickry as it was in 1997.

The passenger railway desperately needs an overall leader and far less fragmentation, but I'm realistic enough to know that it might take twenty years before real benefits are seen, such is the mess that previous governments and the private sector have created.

But drop the Great and leave it as British Railways or British Rail.

 

[507020]

Of all the actions necessary to resolve the current issues in the rail industry, this plan addresses at least one of them and is therefore well thought out.

A single operator of currently DfT franchised passenger services under Great British Railways. The retention of open access passenger and freight is unfortunate, but with no interworking of loco hauled operations between passengers and freight and no capacity to reinstate the common carriers act etc, this is of little consequence. There may however be scope for GBR to cannibalise the passengers of open access operators a la bus deregulation and then simply lease and integrate their train fleets and hire their staff.

There is no reason though why on day 1, they can’t merge Network Rail with DOHL and adopt the name Great British Railways for a degree of vertical integration, merging the operations of Northern, TPE and LNER, pooling route and traction knowledge at every depot, especially in Yorkshire and the north east, regardless of former operator and beginning strategic training to eventually harmonise these, eliminating the railway’s biggest inefficiency. Any other functions that were duplicated between TOCs can also be eliminated and centralised, with GBR then preparing to integrate the next TOCs, which I believe are SWR and c2c, which may be able to find efficiency savings with the former southeastern. This is where Labour is able to find most of their £2.2 billion a year, more than scrapping profits.

There will be no TOCs in the new model. GBR’s own services won’t need track access on it’s own infrastructure. Devolved operators, both the already nationalised TfW, ScotRail and Caledonian Sleeper and Elizabeth Line and London Overground which I expect will end up directly operated by TfL, however will not be directly controlled by GBR, which will largely represent the rest of England outside London, but this is unlikely to be problematic.

The one I am most concerned about is Merseyrail. Its contract expires in 2028, but it remains to be seen whether it joins the single operator, sharing resources with other services, or achieves devolution of infrastructure and becomes an island of fragmentation. Regions other than Merseyside will also want improvements to train services without splitting off from the newly unified network.

The Passenger Standards Authority sounds like a rebirth of the Strategic Rail Authority, taking some of the functions of the ORR and the best-price ticket guarantee is obviously true fare reform, the details of which have not yet been worked out, because such a guarantee would be unworkable under the current fare structure.

New standard liveries and uniforms to go with a coherent national rolling stock strategy may also appear after a while. The new CrossCountry livery in particular I don’t expect to last long.

 

[dk1]

Believe it when I see it. Didn’t seem bothered last time they were in power.

 

[Sly Old Fox]

Hopefully it’ll put an end to the nonsense of situations like the other day when the driver of a XC service was taken ill at Gloucester, causing much disruption as the train blocked a platform, despite the fact a depot full of drivers is right there who could’ve shunted it out the way, but none of them sign 170s.

But I highly doubt it.