More rail services taken into public ownership – Daily Business

Four more rail services will be taken into public ownership by the middle of next year as the Labour government takes control of franchises reaching their end of their contract.

Transport Secretary Heidi Alexander will tell the Labour Party conference that Labour is “calling time on 30 years of failure, frustration and fragmentation”.

The Rail Public Ownership Bill was the first major piece of legislation passed by the Labour Government, allowing ministers to take operators back into public control as their contracts expire – meaning the taxpayer does not foot the bill to buy out expensive contracts.

Legislation to establish Great British Railways, the new organisation which will take responsibility for the day-to-day operations of the railways, will be introduced before the end of the year. 

Ms Alexander’s update will be one of a number deliberate moves by Labour to prove it is delivering on its manifesto commitments. It is expected to remind delegates of progress in setting up GB Energy to invest in the renewables sector and the setting up of the National Wealth Fund to invest in other infrastructure.

However, it has yet to move the dial on planning reform, housing and business rates – all key issues for the business community.

In her speech in Liverpool, Ms Alexander will announce that West Midlands Trains services will transfer to public ownership on 1 February and Govia Thameslink Railway services on 31 May. Chiltern Railways and Great Western Railways (GWR) services will be the next to transfer.

Govia Thameslink is the largest train operator in the country, meaning that by the middle of next year eight in ten services will be in public ownership.

Ms Alexander is expected to say: “For too long our railways have been run in the interests of private profit, under a broken system that failed passengers over and over again. 

“This Labour Government is calling time on 30 years of failure, frustration, fragmentation. We are returning our railways to the service of passengers. 

“We said we would do it in our manifesto – and we are delivering on our promise.” 

She is not expected to mention ScotRail which the SNP brought under public ownership in April 2022. Nor is she likely to mention the Open Access Rail operators, run by private firms such as Aberdeen-based FirstGroup and which do not receive any government funding. All their revenue is self-driven and typically operate in under-served places.

Ms Alexander has indicated to the rail regulator that she does not favour granting more open access licences as she believes they are denying revenue from a nationalised railway.

However, FirstGroup, which runs a number of services under the Lumo brand, has recently led the argument on how open access supports a growing railway.

Last year it committed about £500m for 14 trains from Hitachi Rail’s Newton Aycliffe factory in County Durham to run on open access routes from late 2027. Another £460m could be invested in 13 more trains if additional open access routes are approved.

Labour says public ownership of Britain’s railways is already delivering for passengers. Southeastern and LNER are delivering some of the lowest cancellation rates nationally.

Passengers in the north of England are now making journeys across Northern and TransPennine Express with just one ticket.

New trains on South Western Railways have tripled in the four months since it came under public ownership.