Labour has said it plans to renationalise almost all of Britain's railways.
I welcome that. The simple fact that it is willing to acknowledge that in a sector previously privatised the state might be a potentially better supplier of services is clearly good news. It is also very obviously true.
Before we get too excited though there are observations to make.
Firstly, rail is easy to renationalise because all Labour has to do is let rail franchises expire and then not re-let them. There is no similar model elsewhere.
Second, they are not planning to renationalise the rolling stock companies that have leeched money out of the system for decades. It would, apparently, be too costly to do that, which is nonsense since if a premium is paid now that will only and inevitably reflect the fact that this will be settled anyway over time through excessive payments over remains lives of leases. I am still baffled by where Labour gets its corporate finance advice from.
Third, there is no apparent plan to set up a new state owned rolling stock company to supply new rolling stock and reduce the cost of new investment. That makes no sense.
Fourth, nor does it appear to make much sense to allow some small operations that piggy-back the existing system to continue.
Fifth, the consumer focus of the announcement does, however, make sense. Most especially a system of offering cheapest prices on apps is essential. In that context though, permitting Trainline to continue selling tickets is utterly illogical. Their app never seems to find that solution whenever I encounter it. I gave always thought its existence was an extraordinary error of judgement on the part of those who permitted it.
But all this being said, this plan leaves many questions unanswered. For example, if national co-ordination will work for railways, why not for the NHS, where decentralisation has created chaos?
And why, if a failed model resulting in the need for subsidy has resulted in the requirement to nationalise the railways, is Labour not planning on doing the same for water, where I argue that all the English water companies are environmentally insolvent and so never able to meet the requirement that they simultaneously supply clean water, rivers and beaches and meet net-zero targets? They are bust.
The same can also be asked of the electricity and gas companies, where the charade of competition is a total sham. Changing supposed supplier never actually changes the wires or pipes into your house or who actually puts gas and electricity into them, after all. So why not address failings there as well? Much of that sector exists simply to free-ride on the back of consumers. Shouldn't that end too?
In summary, this baby step forward is welcome, but to come close to supplying this country with a suitable structure for the infrastructure that it needs Labour has a very long way to go.
Thanks for reading this post.
You can share this post on social media of your choice by clicking these icons:
You can subscribe to this blog's daily email here.
And if you would like to support this blog you can, here:
I’m afraid I don’t believe them.
Jeremy Corbyn first received some positive feedback when he suggested nationalising the railways. It was seen as eminently sensible by even Tory voters. The positive reception for left policies continued. Keir Starmer’s pledges, long since binned, came from that programme, and I’d imagine after having purged the left and made their plans identical to that of the incumbent government, Labour strategists are desperate for something which might distinguish them in the upcoming general election. As you point out, it ignores key issues and sounds more like Nationalisation in name only. Tony Blair had a similar approach and it changed nothing.
As far as I can see its clear that the Tories and Labour are American and Israeli puppets. The Lib Dems have joined them in a pro-war stance. The only thing to do is actually make some sensible choices over policies you want and reject all of these consensus parties at the GE, when it comes.
Nationalisation of the railways appears to be the first policy that differentiates Labour from the Conservatives.
As you say, a baby step in the right direction.
Due to Thatcher selling off the Engineering side of British Rail, and of course ‘rolling stock’ is much more complex than it was, the way forward with rolling stock isnt clear.
But clearly new Rolling Stock could be owned by ‘New BR’ and I suggest that the leaseco’s could be giver various options such as regulation, taxation or simple replacement of stock they own with ‘New BR’ owned stock as its cheaper.
Not on topic but so important.
Private Equity is killing this country- and is a poison throughout capitalism. The UK’s takeover by American Private Equity companies is destroying the UK economy. It is now embedded even within the NHS. This is what Labour needs to get radical about.
https://www.newstatesman.com/culture/books/book-of-the-day/2024/04/how-america-bought-up-britain-vassal-state-review
Labour *is not* going to get radical. New Labour did not reverse any anti Union legislation and Tony Blair boasted about the lack of union power in his later career. Starmer has purged the “radicals” and even purged the policies he stood on to get elected. You really need to look elsewhere.
Grand Central run 5 trains a day from Hartlepool to London each day when previously there were none. The service makes the town feel like it’s on the map. I suspect Hull and Lumo services have their supporters.
I do not share your enthusiasm for ‘not allowing them to continue’
I have no problem with them conti nuing under state control.
I must have imagined boarding an InterCity 125 in Sunderland in the late 1980’s, enjoying the coastal views en route to stopping in Hartlepool and a couple of other places before the train rejoined the East Coast mainline at York and on to London. And all for the princely sum of £1 return travelling as a teenager with my old man on a Family Railcard
I agree.
It is the one re-nationalisation that Labour seem to be standing by. I hope that it can be used as a model and a stepping stone to others. I think it is inevitable that water (at least some companies) will be next. And if Labour won’t renationalise gas and electricity, why can’t they set up a public sector alternative provider to give us the choice? I would certainly rather pay a public service provider for my energy, then a private, profit making company. At the very least, they could, and should, renationalise the National Grid.
I had to laugh at the usual Tory attack of “unfunded” commitments. This from the party that wants to get rid of National Insurance, without saying how they will fund it — £45 billion a year. Then there is all that extra unfunded defence spending to prepare us for war and killing people. Well, the Tories certainly know how to kill people, what with how they handled covid, NHS 8 million waiting list, health issues due to the cost of living crisis, etc. Tories always seem to find the money for their little pet projects, though, especially in an election year.
Nationalisation of the railways would not just be beneficial, it would be an absolute bleeding miracle.
NB Miracles don’t happen
Thank you and well said, Richard.
Richard: “I am still baffled by where Labour gets its corporate finance advice from.”
City / banking: Barclays*, Citi, Goldman Sachs, HSBC* and JP Morgan. Periodic input from UK Finance*. NB HSBC and RBS* have rolling stock investments and loans.
Buy side: A mixture of long only, hedge and private equity fund operators. Leading lights like Elizabeth Corley, Ronald Cohen and Ron Kalifa. Periodic input from the Investment Association*.
*My former employers. Since last November, I work with UK Finance and the Association of Foreign Banks periodicallly.
It’s pretty shoddy then
This from Tribune magazine about corporate lobbying at Labour Conference:
https://tribunemag.co.uk/2023/10/labour-for-sale-labour-conference
“the video screens read ‘Field Consulting: Shaping Policy, Perception and Places.’
Field is a corporate lobbyist who helped pay for the party; requests for invites were directed to the lobbying company. The company represents several private rail firms, including Aviva, Govia and First Group, who want to blunt Labour’s limited rail renationalisation programme.”
“I am still baffled by where Labour gets its corporate finance advice from.”
Quite possibly from the “Big 4 insultants” – the same “Big 4” that advise……the rolling stock companies.
I think those pulling Starmer’s strings have been reading the runes. Polls are showing LINO’s lead over the Tories/Reform to be soft. Horrifyingly, the private company Reform UK seems to be gathering the fascists, emboldened even in public, and they are truly doing the National Zocialist line in policy (kill immigrants + nationalisation). In order to put clear water between themselves and the opposition, I expect LINO to make some anodyne water and/or energy policy announcements soon.
Starmer doesn’t need to make anodyne comments – he is just carrying on supporting almost everything this dreadful Government does, and in so doing with every passing day showing how useless he is going to be if he becomes prime minister.
https://www.theguardian.com/environment/2024/apr/24/tory-duty-on-ofwat-protects-profits-over-reducing-sewage-pollution-experts-say
Hi Rachel,
It’s good to see that Labour accept that privatisation of the railway network has not worked and private companies are not the best to run it.
Don’t worry about funding. Remember you will be in charge of the credit card.
Rather than a rehash of PPI/PPP or making the railways pay their way not aim for a rail network that is:
1. reasonably priced for the public.
2.run for the benefit of the public.
3. is green and sustainable.
4. is completely state operated running the track/stations/regional operators/the state buying the rolling stock then hires it to the operators/track, station maintenance/rolling stock maintenance.
Strangely the old British Rail’s performance etc was much better than the fondly quoted” it was rubbish”.
This could be your working model.
John Major privatised the system because it was the thing to do. The selected privatisation was recommended by the financial world’s privateer experts, who were only looking to maximise profit for the lucky winning companies.
Mr Major was told at the time that the selected method was not what was being done in the rest of the world and that there were better ways to do it. But heho what did the dissenters know.
Food for thought?
If Labour gets in and does nationalise UK’s railways, where does that leave Scotland, which nationalised its railways in 2021? We’ve become used to better rolling stock, better punctuality etc and submersion of a state service that works and is demonstrably better than the previous privatised service. This is just one of the many improvements made by the Scottish Gov’t, but its everyday availability to everyone here gives it a higher profile than many of the benefits to reduce poverty.
My guess is that any move to subsume Scotrail into Westminster control would be met with rage in Scotland: It would be seen as yet more ignorant dabbling in our lives and governance, with no guarantee that ‘Great British Railways’ would do a better job.
Excellent question….I suspect Labour will be claiming it for Great British Railways….
I do too Richard, but those of us old enough to remember the latter days of British Rail and the appalling privatised service provided by Abellio won’t take lightly to another take-over of Scotland’s assets. Abellio ran with outdated rolling stock, had a very poor record of timekeeping and, most egregious of all, randomly failed to observe designated stops, leaving passengers stranded in places further down the line, which is bad enough at any time, but on the last train of the day was unforgiveable.
Agreed
Correction: the “sentence” which reads “We’ve become used to better rolling stock, better punctuality etc and submersion of a state service that works and is demonstrably better than the previous privatised service” should read “We’ve become used to better rolling stock, better punctuality etc and submersion of a state service that works and is demonstrably better than the previous privatised service will not go down well with the Scottish people.” Apologies for my lousy proof-reading.
Wales ditto
Richard,
You are quite right – a modest start (although the devil is always in the detail) but way to go for the rest of the utilities upon which we all depend.
It seems to me that it would be a good use of MMT to get water back under public ownership but I don’t think Ms Reeves is with the beat on this. She probably shudders at the very acronym, believing it to stand for “magic money tree”.
Best,
Lawrence
[…] Murphy, author of Funding the Future, which campaigns for a fairer and sustainable economy, echoes such calls. Murphy argues that rail […]