Rail passengers face further “misery” after Labor announced rail services would be nationalized within three years instead of five.
Transport Secretary Louise Haigh suggested at the Labor Party conference four weeks ago that it would be completed “by the end of Parliament”.
But speaking in Derby last week, Ms Haigh said the Government’s flagship Public Ownership Bill, now before Parliament, “allows us to take passenger services into public hands as contracts expire within the next three years”.
Senior figures in the rail industry said Labor’s rhetoric was widely understood to mean nationalization would be completed in 2029. They warned that bringing it forward could make trains worse for passengers.
“Passengers will face more misery,” one said, and another added: “Wouldn’t it be better to do this sensibly rather than rushing?”
Conservative shadow transport minister Helen Whately said plans to force train companies into state ownership were being “rushed” by Labour.
“Passengers just want a railway that runs on time and at an affordable price. “Unfortunately, this is not a priority shared by the Labor Party, which has put its union friends first through ideological changes.”
“Why this mad rush to nationalize the railways? Does Labor hope that by the time people realize the consequences it will be too late to stop this?
“Or is it because the Secretary of State thinks he’s about to lose his job?”
The Transport Secretary had previously told the Labor faithful: “At the end of this Parliament our railways will be publicly owned by Great British Railways, at the service of you, the British people.”
In April, he gave a speech at the launch of the Labor Party policy document saying: “Within five years of the formation of a Labor government, the essential terms of existing contracts will expire and we expect them to be handed over to administration by Great British Railways.” .”
The statement follows the DP World incident earlier this month, in which Ms Haigh repeatedly criticized P&O Ferries, which she owns, and then threatened to pull the company’s planned £1bn investment in the UK.
Whitehall sources believe Ms Haigh could potentially lose her ministerial post in the Prime Minister’s first Cabinet reshuffle, with The Sun reporting that an unnamed senior minister said: “If there was a change tomorrow I think she would go.”
The boss of the company’s parent company has also warned that one of Britain’s most successful private rail operators risks being nationalized sooner than necessary as a result.
Dominic Booth, who runs Greater Anglia’s parent company Transport UK, said taking his company into state ownership “wouldn’t make any sense”.
“From both an operational customer service and financial perspective, Greater Anglia is showing others how to act,” he said, highlighting that it earned more than £60 million in so-called “bonus payments” for the Treasury last year. He adds that Greater Anglia can do more.
“If you’re at the top of the tree… and you’re train operator of the year and you’re generating £100m of bonus payments to the Treasury – unique in that respect – there’s probably only one way to go from there.” added Mr. Booth.
Andy Bagnall, chief executive of Rail Partners, said: “Rushing the private sector away from providing rail passenger services will alone not address the key concerns of passengers and is likely to increase the burden on taxpayers.
“Evidence both here and in Europe shows that a best-of-both-worlds approach, using private train companies within a framework of public control, is the best way to improve customer experience and reduce subsidies.”
Full state ownership
Labor campaigned to win July’s general election on a platform of bringing all of Britain’s partially privatized passenger rail companies into full state ownership at no cost to taxpayers.
Ministers wait for contracts to expire and then choose to appoint civil servants to run the trains rather than new private companies.
Transport UK’s Mr Booth described how the Government currently manages the four train companies it controls (South-Eastern, Northern, LNER and TransPennine Express).
“They are currently performing quite erratically financially and we would argue that a sensible management would leave Greater Anglia to its full term so it could show others how to do things better,” he said.
A Department for Transport spokesman said: “There has been no change in policy, our plan has always been to move operators into public ownership when their contracts expire.
“We expect Great British Railways to be operational and managing all train operators within the next five years as part of our plans to deliver better quality, efficient and more reliable services.”