Will Labour’s plan make train tickets cheaper?
- Published
The Labour government has announced that South Western Railway's services will be the first to transfer into public ownership next year, followed by c2c and Greater Anglia.
But what will this mean for passengers, and how will it work?
What will it mean for train tickets?
When the government laid out plans for renationalising the railways in July, it did not guarantee lower fares, but promised a "best fare guarantee", to make sure people are always paying the lowest fare for their journey.
It has also promised its reforms would make buying cheaper tickets simpler.
However, railway specialist Tony Miles - who has covered the industry for more than 40 years - told the BBC when the plans were first announced that any savings were likely to be minimal.
He said this is because the private operators' profit margins are already so small, at just a few pence for each passenger journey.
He argued this would mean Labour would only be able to pass on very small savings per journey.
What does nationalise mean?
From just after the Second World War until the 1990s the UK rail system was fully nationalised, with the government owning the rail networks and all of the trains.
The industry was privatised in the 1990s, with services run by a variety of train operating companies.
At the moment, the infrastructure is managed by publicly-owned Network Rail, while passenger train services are run by individual operators, which are both privately and publicly-owned.
The situation is different in Scotland and Wales, where passenger services are run by the devolved governments. In Northern Ireland, the system is fully nationalised.
How will Labour's plans work?
Labour has brought in a new law to make nationalising passenger operators in England the default option, rather than the last resort for companies that have been struggling.
It also plans to set up a new organisation, Great British Railways (GBR), to run both the network tracks and trains.
The publicly-owned body will oversee the rail system across England, Wales, and Scotland.
Once up and running, it will take over the contracts currently held by private firms in England as they expire in the future.
However, GBR will not buy back "rolling stock" (an industry term for the train carriages) from private firms, but will continue to lease them.
Rail freight companies will not be nationalised, with the government instead saying that GBR will support and promote freight operators.
The government also wants to establish an independent watchdog, the Passenger Standards Authority, which would "champion improvement in service against a range of measures".
Whether this will make the trains run better "comes down to how they’re going to fund things" and whether it will allow major construction projects to move forward, says Mark Simmons, deputy editor at International Railway Journal.
When will it actually come into effect?
South Western Railways will be renationalised in May 2025, C2C in July 2025, and Greater Anglia in autumn 2025, the transport department has confirmed.
All railway operators' contracts or core terms will expire by October 2027.
Soon after the general election, former transport secretary Louise Haigh met the managing director of Avanti West Coast and a representative of infrastructure manager Network Rail, to urge improvements in the meantime.
Before the election, she had promised to look into removing Avanti’s contract before 2026.
However, company bosses are understood to be confident the terms of the contract have not been breached. That means any attempt to remove it could be met with legal action.
Another troubled privately-run operator, CrossCountry, is currently running a reduced timetable because of a backlog of driver training.
Ms Haigh said CrossCountry had warned it would breach its contractual targets for cancellations, and she had reluctantly accepted the temporary service cuts to give passengers more certainty.
Transpennine Express’ contract was stripped in May 2023 after it struggled to run a full timetable amid a shortage of available drivers.
Are other countries' trains under national control?
Luxembourg operates a fully state-run system where all train journeys are free, and train tickets in other European countries with more state control than the UK can be much cheaper.
However, those networks also receive lots of government investment, which can mean higher taxes.
Mr Simmons said trains in the UK are "not as bad as people think".
"Sometimes the perception is that everywhere else is better, and that’s very much not true.”
However, he said other countries were “powering ahead” with long-term planning for major projects.
Will Labour’s plan really cost nothing?
If Labour waits until the current franchise contracts run out and takes them on itself, as the previous government did during Covid, this would not necessarily cost the taxpayer anything.
However, doing so would also mean taking on the railway operators debts, leases, and liabilities, such as their pension fund pots and the lease contracts for the rolling stock.
Labour says its plans would save the taxpayer £2.2bn a year, but the government has not guaranteed that all this money would be reinvested in the railways.
When do the rail operator contracts expire?
UK private operators' contract expiry dates
South Western - May 2025
Essex Thameside (c2c) - July 2025
East Anglia - Autumn 2025
West Midlands - September 2026
Chiltern - December 2027
Thameslink, Southern and Great Northern - April 2028
Great Western - June 2028
East Midlands - October 2030
Cross Country (Arriva) - October 2031
West Coast - October 2032
UK private operators' 'core term' expiry dates*
East Anglia - Autumn 2025
Chiltern - April 2025
Thameslink, Southern and Great Northern - April 2025
Great Western - June 2025
West Midlands - September 2024
East Midlands - October 2026
West Coast - October 2026
Cross Country (Arriva) - October 2027
UK public operators
Caledonian Sleeper
East Coast (LNER)
NI Railways
Northern
ScotRail
South Eastern
TransPennine Express
Transport for Wales
Source: Rail Partners, Department for Transport