Friends of the Rail Forum

Labour backs plans to return railway network to public control

Sweeping reform would begin with renationalisation of key routes and end franchising of services

Toby Helm, political editor
guardian.co.uk, Saturday 30 June 2012 19.37 BST

A return to public ownership is designed to appeal to the ‘commuter vote’. Photograph: ITV/Rex Features
Plans to bring the national rail network back under public ownership in order to halt big fare increases and prevent private companies siphoning off huge profits will be considered by Labour as part of its policy review, the Observer can reveal.

An independent thinktank report out on Monday, which puts forward a detailed plan for effective renationalisation, was warmly welcomed by the party's transport spokeswoman, Maria Eagle, who said the study was timely and put forward a "coherent case for reform".

The changes would amount to the biggest overhaul of the train system since British Rail was broken up in the mid-1990s and be seen as a deliberate pitch by Ed Miliband's party for millions of "commuter votes" in key marginal seats ahead of the next election.

If adopted by Labour it would mean ending franchises as they come up for renewal on the east coast, west coast and midland mainlines – ousting the likes of Sir Richard Branson from one of the country's most profitable routes – and bringing the running of trains and infrastructure under one publicly owned and accountable company.

Entitled Rebuilding Rail, the report by Transport for Quality of Life argues that rail operations and infrastructure should be reintegrated, franchising phased out and a democratic role given to passengers, the workforce and elected local and regional authorities.

It says that the current fragmented system – under which the publicly owned Network Rail runs the infrastructure and private companies compete for franchise contracts to run trains – is failing taxpayers and passengers while benefiting private train operators and their shareholders, who are guaranteed taxpayer funds if profits fall below a certain level.

The authors estimate that £1.2bn of public money has been lost each year as a direct result of privatisation and fragmentation, money that could have allowed fares to be 18% lower than at present. UK rail passengers, who already pay the highest fares in Europe, face further increases of at least 6% from next January.

Making it clear that Labour agreed with many ideas in the report, which was funded by the main rail unions, Eagle said: "Under the current system we have unaccountable train companies given a licence to print money to operate a monopoly service at high cost to passengers in an industry that still relies on £4bn from taxpayers every year.

"Increasingly franchises are run by subsidiaries of the German, French and Dutch state railways with profits helping deliver ticket prices in those countries that are a third of ours. Labour's policy review is therefore looking at all options to make our railways work better for passengers with nothing ruled out, including whether the not-for-dividend model that works for rail infrastructure should be extended to rail services."

A report to Labour's national policy forum earlier this month confirmed that the party was looking at the case for extending the model used for Network Rail – which has to pump any profit back into the network – to train services themselves, thereby preventing money leaking out of the system to company shareholders at home or abroad.

Among the favourites to win new franchises on the west and east coast mainlines are subsidiaries of the German national train operator Deutsche Bahn and France's SNCF. If they win the contracts, the profits made from running services in the UK would be ploughed into the German and French networks, helping them to keep their fares lower.

As well as looking at renationalising the main former InterCity lines, Labour is also developing plans to hand far greater control over local and regional services to a string of new transport authorities in the regions which would have wide-ranging freedom to run services according to local needs.

Transport for Quality of Life said its research – although funded by unions – was based on a wide range of opinion and research in many countries. In a speech to the TUC last year Ed Miliband said Labour should look at "all of the options about a way forward for rail services in this country – mutual options, public options, private options".

TQL director, Dr Ian Taylor, said: "When several billions of public money are flowing into the railway each year … proper public control of the railway is called for. Other countries in Europe still regard it as normal that a public service as important as the railway should be appropriately managed through public ownership in order to realise the broad economic, social and environmental gains which rail can deliver. This report documents in some detail a route to achieve that, and moreover shows how it could be done at a saving to the public purse of over £1bn per year."

Hmmm. Trying pan into the fire?

Although given the current hodge podge..............

Plaid Cymru calls for "re-nationalisation" of the railways

Matt Withers, WalesOnline Jul 6 2012

Plaid Cymru has called on the Welsh Government to effectively re-nationalise the railways after the UK Shadow Transport Secretary suggested Labour were looking at the policy for England.

Labour went into last year’s Assembly election with a pledge to examine the possibility of the Wales & Border rail franchise being run on a not-for-dividend basis, such as Glas Cymru.

This week Angela Eagle, the English Shadow Transport Secretary said Labour’s policy review was examining whether the model currently used for rail infrastructure should be extended to rail services.

That has provoked Plaid’s transport spokesman, Rhodri Glyn Thomas, to claim there was now a “strong possibility” of the Welsh Government pressing ahead with a similar system for Wales.

A spokeswoman for the Welsh Government said it was still considering which course to take.

A London newspaper reported earlier this week that plans to bring the national rail network back under public ownership in order to halt big fare increases and prevent private companies siphoning off huge profits would be considered by Labour as part of its policy review.

An independent think tank report published this week which puts forward a detailed plan for effective re-nationalisation was warmly welcomed by Ms Eagle, who said the study was timely and put forward a “coherent case for reform”.

The changes would be the biggest overhaul of the train system since British Rail was broken up in the 1990s and would be seen as a pitch by Labour for millions of “commuter votes” in key marginal seats ahead of the next general election in 2015.

Entitled Rebuilding Rail, the report by Transport for Quality of Life says the current system – under which the publicly-owned Network Rail runs the infrastructure and private companies compete for franchise contracts to run trains – is failing taxpayers and passengers while benefiting private train operators and their shareholders, who are guaranteed taxpayer funds if profits fall below a certain level.

Ms Eagle said: “Under the current system we have unaccountable train companies given a licence to print money to operate a monopoly service at high cost to passengers in an industry that still relies on £4bn from taxpayers every year.

“Increasingly franchises are run by subsidiaries of the German, French and Dutch state railways with profits helping deliver ticket prices in those countries that are a third of ours.

“Labour’s policy review is therefore looking at all options to make our railways work better for passengers with nothing ruled out, including whether the not-for-dividend model that works for rail infrastructure should be extended to rail services.”

The words were seized upon by Mr Thomas, who urged the Welsh Government to press ahead with a similar model here.

“In Wales we have a Labour Transport Minister actually in charge of making that decision, because the franchise is devolved here,” he said.

“The Wales & Border franchise expires in 2018, and preparatory work for replacing it needs to be commenced several years in advance.

“Both the Plaid Cymru and Labour manifestos contain a commitment to support this not-for-dividend social model.”

Former Plaid leader Ieuan Wyn Jones announced such a model as his preferred way of running train services when, as Deputy First Minister, he was responsible for transport policy.

“It could well be a publicly owned company that could contain representation from government, passengers, and workers,” Mr Thomas said.

“It would be groundbreaking if Wales made this move, and party differences could well be put aside. If the work starts on it now, there is a strong possibility that we will see results.

“At the moment a private company runs the franchise under public contract. Profits leak out of the rail network and effectively disappear.

“And we also have very advanced state-owned companies from France and Germany running services here in Wales and the UK and reinvesting the profits in their home countries.”

A Welsh Government spokeswoman said: “The Welsh Government committed to investigating the feasibility of a not-for-dividend model for the Wales and Borders franchise, and this work is underway.

“We are at an early stage of consideration on this and have not decided yet upon any particular course of action.

“We will be considering the views of all interested parties during this investigative work.”