Support 100 years of independent journalism.

  1. Politics
17 July 2014

Labour’s new rail plan: the full details

Party vows to end "ideological obsession" with privatisation by allowing the state to bid for franchises. 

By George Eaton

One of the biggest decisions that will be taken at Labour’s National Policy Forum, which opens in Milton Keynes tomorrow (and runs until Sunday), will be over the party’s rail policy. As has long been known, Labour will pledge to reform the franchising system to allow state and not-for-profit firms to bid for contracts as they expire (in contrast to the coalition’s dogmatic allegiance to the private sector). But transport unions have been pushing the party to go further and promise to automatically return franchises to public ownership. 

Ahead of the NPF, however, a source close to Jon Cruddas has said that “there is now general agreement across the Labour movement” around the package proposed by the leadership. This includes a pledge to legislate to allow a public sector comparator to compete with private firms for franchises “on a genuinely level playing field”. 

Billed as the biggest proposed reform of the railways since privatisation, it also features a commitment to create a new overarching body, accountable to parliament, tasked with implementing a national strategy for the railways. This would bring Network Rail and a new passenger rail body together to co-ordinate passenger operations, manage infrastructure, oversee stations and ticketing, and ensure customer satisfaction across the network. 

As part of its plan to ease the living standards crisis, Labour will also pledge to cap annual fare rises on every route, simplify price structures and create a new legal right to the cheapest ticket. And it will promise to devolve regional and commuter services in an attempt to improve local transport, integrating trains, buses and trams – a plan modelled on Transport for London. 

A source close to Cruddas said: 

Sign up for The New Statesman’s newsletters Tick the boxes of the newsletters you would like to receive. Quick and essential guide to domestic and global politics from the New Statesman's politics team. The best of the New Statesman, delivered to your inbox every weekday morning. The New Statesman’s global affairs newsletter, every Monday and Friday. A handy, three-minute glance at the week ahead in companies, markets, regulation and investment, landing in your inbox every Monday morning. Our weekly culture newsletter – from books and art to pop culture and memes – sent every Friday. A weekly round-up of some of the best articles featured in the most recent issue of the New Statesman, sent each Saturday. A weekly dig into the New Statesman’s archive of over 100 years of stellar and influential journalism, sent each Wednesday. Sign up to receive information regarding NS events, subscription offers & product updates.
I consent to New Statesman Media Group collecting my details provided via this form in accordance with the Privacy Policy

There is now general agreement across the Labour movement around Jon’s bold package for how we reform the way our railways are run. We want to get rid of the Tories’ failed franchising model and an ideological obsession which puts privatisation ahead of common sense – without going back to the old days of British Rail.

Instead, Labour is determined to face up to the need for bigger reforms which meet the challenges facing our creaking transport system in the 21st Century. 

The package being discussed by the NPF this weekend goes beyond the public versus private debate. It would deliver a broader, radical reform agenda to save money and stop passengers being ripped off. It would allow us to plan railways that will serve our country as a whole and local communities better.

Above all, it would put right the mistakes made 20 years ago and put the taxpayer and rail passengers first.

Since 2010, commuter fares have increased by 20 per cent, leaving UK fares at least 30 per cent more expensive than those in other countries. Labour concedes that the franchising model adopted after privatisation in 1994 has delivered some improvements, but argues that a one-size-fits-all approach has failed to secure the best deal from private operators, with the collapse of the West Coast franchise process costing more than £50m. 

The task for Miliband will now be to build a consensus around this package. The proposal will be discussed in amendment meetings tomorrow followed by a vote of delegates on Sunday. Based on conversations with Labour sources tonight, the leadership is now confident of winning majority approval for the plan. 

Here’s the motion that will be debated tomorrow:

“Since the late 1990s there has been significant investment in the railways and passenger numbers have grown sharply. But it is now clear that the rail system is not delivering a fair deal for passengers or the taxpayer, almost 20 years on from the botched privatisation of the railways. Both public subsidy and fares are higher than in other countries, and there is no ‘guiding mind’ overseeing the railways, planning investment and ensuring results. We have also seen a chaotic franchising process in recent years that has cost millions. To tackle these problems the next Labour government will:

“Review this government’s failed franchising process as a priority, after the chaos of recent years, to safeguard taxpayer and passenger interests and put in place a system that is fit for purpose.

“Learn the lessons of East Coast, where we have seen the benefits of a not-for-dividend operator running rail lines, by legislating to allow a public sector operator to be able take on lines and challenge the train operators on a genuinely level playing field to secure value for money for passengers and taxpayers.

“Devolve decisions over the running of regional and local services, including to Scotland and Wales, so that areas can bring together trains, buses, ferries and trams into a single network.

“Tackle the monopoly market for rail rolling stock by giving Network Rail greater responsibility for developing a long term plan for procurement and leasing of new rolling stock.

“Create a new guiding mind for the railways, bringing Network Rail together with a new passenger rail body to contract routes, co-ordinate services, oversee stations and ensure customer satisfaction across the network.

“Ease the pressure on fare payers with the efficiencies these reforms release and by capping annual fare rises on every route, simplifying fare structures and creating a new legal right to the cheapest ticket.”