Rail Nationalisation back on the agenda

Thirty prospective Labour parliamentary candidates have called for the railways to be taken back into public ownership in an open letter to The Observer newspaper.

“Train companies walk away with hundreds of millions of pounds every year, despite running monopoly services and benefiting from £4bn of public investment in the rail network every year. However, the not-for-profit model that works so well on the East Coast Main Line has shown that there is a better way to run rail services, and this model should be extended as existing contracts come to an end,” it said.

Many of the candidates will be standing in marginal constituencies at the next election.

However, Labour leaders have been more circumspect in their support:  Ed Miliband told the BBC One Andrew Marr programme: “We are looking at all the options. Passengers are paying higher fares and the taxpayer is paying big subsidises . . . but we are not going back to the old monolithic BR model.”

Shadow Chancellor, Ed Balls, made similar comments but refused to give a specific commitment to re-nationalise when pressed on the same programme, saying “that will have to wait till our election manifesto.”

Both men condemned the government’s “dogmatic” decision to privatise the East Coast franchise.

The industry body, the Rail Delivery Group, has defended the privatised railway: “It is wrong to blame private train companies for above inflation increases in the average cost of commuter fares. The annual increase has nothing to do with who operates the services and everything to do with government policy. Successive governments instructed companies to increase commuter fares by 1% above RPI each year from 2004 to last year.”

RDG also added: “Holding up publically-run East Coast as a model of how to run a better railway is a myth that is equally wrong. South West Trains and Southern, which are both privately-owned, paid back more to the government than publically-owned East Coast trains according to the latest ORR figures for 2012/13: SWT paid £315m, and Southern £215m, as against ECT’s £191m. We say that renationalisation would be bad for passengers, taxpayers and the country as a whole.”

Network Rail is already under public ownership: Renationalisation of the rail franchises as they expire – if carried out – would be done on a piecemeal basis and could take many years to accomplish. Three of the 16 DfT awarded franchises are to be refranchised in 2014 for periods far in excess of the standard five year parliamentary term in office: For example, Essex Thameside will run to 2029; Thameslink Great Northern (later to be merged with Southern) stretches to 2022; and East Coast Trains is scheduled for 2023 renewal.

Additionally, a further complication is that the refranchising process for the Northern and Trans Pennine Express franchises (to be awarded 2015), and those for Great Western and Greater Anglia (to be awarded 2016), will commence before the date of the next general election (7 May 2015), which could set back any renationalisation plans even further.

Then there’s the EU angle: In February, one of the European Parliament’s amendments to the European Commission’s Fourth Rail Package succeeded in postponing compulsory competitive tendering of public service contracts to 2023. It’s not known how this would affect the UK at this stage, though it might strengthen the hand of an incoming Labour government intent on renationalisation.

647/May 14

 

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