News

Corbyn pushes ahead on renationalisation even as Network Rail faces full privatisation

Jeremy Corbyn will unveil plans next week to renationalise the railways as his first official policy since becoming Labour leader.

If he becomes prime minister at the next election, plans for a ‘People’s Railway’ would lead to a third of franchises being returned to public ownership by 2025.

According to the Independent, Corbyn will announce at the Labour conference next week that each route will be renationalised when its franchise expires. Five of 16 franchises are due to expire between 2020 and 2025: East Coast, Southern, Chiltern, Northern and TransPennine Express.

Corbyn told the paper: “We know there is overwhelming support from the British people for a People’s Railway, better and more efficient services, proper integration and fairer fares. On this issue, it won’t work to have a nearly-but-not-quite position. Labour will commit to a clear plan for a fully integrated railway in public ownership.”

The new shadow transport secretary, Lilian Greenwood MP, will also head a party taskforce to develop the plans. It will welcome contributions from transport and disability-access campaigners, passenger groups, councils, rail industry representatives and employees in order to establish an “inclusive process”.

She said: “We are going to put into practice Jeremy’s commitment to a new type of politics by using this taskforce to get a very broad range of views about what this new model of public ownership will look like. But we are going to start from the principle that franchises will be brought into public ownership when they expire.”

But a spokesman for the Rail Delivery Group, which represents Network Rail and TOCs, opposed the policy, claiming rail franchising “virtually covers its running expenses” in a “phenomenal financial turnaround” since the immediate days after privatisation.

“The rail network is vitally important to every household in the country. While other countries have invested heavily in their railways, none has come close to matching the success of ours because they don’t benefit from the winning combination of private sector competition and government funding,” he said.

But despite Labour’s enthusiasm for nationalisation, there are signs that reform could actually go in the other direction, as Nicola Shaw, chief executive of HS1, who is reviewing the structure and financing of Network Rail, said fully privatising Network Rail is one option being considered.

Shaw, speaking to the BBC ahead of her report, due next year, said: “I am considering Network Rail’s relationships with its customers, how its structure works with the government devolution and how the industry works where there is growing demand for the railway.

“…I am looking at all issues and options on the spectrum from where we are now to full privatisation.”

Shaw added that she would also recommend changes to the regulator if necessary.

For her review into Network Rail, she is working with its new chair Sir Peter Hendy, who is conducting his own separate review into the projects that will need to be ditched from Network Rail’s current five-year spending control period to keep it within its budget. RTM understands that review is likely to be published in November, though other sources say it could be as soon as next month.

The chancellor, George Osborne, already announced in his Summer Budget that the government would change the way it channels public money through the rail industry so that “Network Rail focuses firmly on the needs of train operators and, through them, passengers”.

The practical effect of this will be to reduce the proportion of money Network Rail gets directly from the government in the form of its grant, and make it rely increasingly on track access charges paid by the operators. The government hopes that this will further incentivise Network Rail to view the operators as its customers and ensure it serves their interests.

The RMT was aghast at the idea of privatisation of Network Rail, with its general secretary Mick Cash saying it would “drag us back to the lethal days of the privatised Railtrack and the disasters at Hatfield and Potters Bar”.

He added: “Any threat to bust up and sell off Network Rail will meet with the hardest possible industrial and political response from RMT. The union will never sit on the sidelines while public and staff safety is threatened in the name of private greed and corporate profit.”

(Top image c. Niall Carson, PA Images)