Labour’s Rail Renationalision Plans Exclude Compensation for Private Train Operators

A Southeastern Highspeed Javelin train passes through Dover in Kent, England, on April 26, 2019. Gareth Fuller/PA

Britain’s rail operators will be brought into public ownership within the first term of a Labour government, the party’s transport secretary said, adding that private train operators won’t be compensated.

Most passenger services in the UK are run by privately-owned train operating companies (TOCs) under multi-year franchises let by the government.

Labour’s Louise Haigh told GB News that when the operators’ contracts expire, the party plans to bring railways back into public ownership.

She said the policy “will bring significant savings,” while private operators will receive “absolutely no compensation.”

Under Labour proposals, Britain’s railway will be restructured. A single publicly owned railway company, GB Rail, will run both the rail infrastructure and train services.

The government will hold the majority of GB Rail shares, while the remainder will be owned by the Devolved Transport Authorities (DTA).

The company will grow as franchises expire or are terminated early if that offers best value for money, Labour’s policy paper has explained.

Network Rail, owner of most rail infrastructure in the UK, will “disappear” as an entity and will be incorporated into GB Rail.

“The railway should be a public service, not a vehicle for private profit,” the paper added.

Fractured

In the current system, trains are owned by private rolling stock leasing companies, while most railway stations belong to Network Rail but some are leased to train operators.

“Our railways are really wasteful at the moment because they’re so fractured,” Ms. Haigh said.

Her comments come amid ongoing strikes by the members of the ASLEF train drivers’ union this week.

Train drivers have been in dispute with the government over pay and working arrangements, and have walked out across more than a dozen train operators.

Labour MP for Coventry South said that ASLEF members stood up for their rights, taking on the “Tory assault on our railways,” and called for public ownership or British railways.

Ms. Haigh said that the Conservatives had failed to meet with union members and resolve the dispute.

However, Transport Secretary Mark Harper said that strikes continue despite the workers having an “offer on the table that would lift their members’ average wage to £65,000 for a 35-hour week.”

Great British Railways

Last year, Mr. Harper set out a modernisation plan for the railway industry, which included a vision for a “a customer-focused, commercially led rail industry.”

The idea of changing the management of British railways was initially introduced by the government in 2021.

The Transport Secretary at the time, Grant Shapps described the UK railways as a “maze of agreements between hundreds of different parties.”

In a policy plan for rail, titled “Williams Shapps Plan for Rail,” he proposed creating a new public body, the Great British Railways (GBR).

The GBR would own rail infrastructure, collect fare revenue, run and plan the network, and set most fares and timetables.

Last November, the government announced that it intends bring forward the Rail Reform Bill to legislate for GBR to take over operation of the UK’s rail network.

The bill hasn’t yet been announced and any draft will be subject to pre-legislative scrutiny. This means it may not be approved before the general election and a possible change in leadership.

Commenting on the delays to the bill, the National Union of Rail, Maritime and Transport Workers (RMT) general secretary, Mick Lynch, said: “Five years have passed since the Williams Review and in each one of those years, money continues to leak out of a fragmented and incoherent privatised railway network.”

UK railways have been significantly impacted by the restrictions and lockdowns during the COVID-19 pandemic. It saw the passenger revenue drop dramatically, and the government had to use emergency measures to support passenger train operators.

Chief executive of the Railway Industry Association, Darren Caplan, suggested that the GBR plan will help the industry to return to the pre-pandemic average daily passengers levels.