Can Renationalisation Revive the Railways?

Labour’s plan to renationalise rail passenger services within an election cycle is both a substantial offer to the electorate and a clear dividing line with the Conservative government.

Unlike other utilities, which would require vast sums of money to be redirected from the public purse to repurchase strategic assets, the policy can be delivered relatively simply at negligible cost to the exchequer by simply taking routes back into public control when train operator contracts expired.

The timing of the announcement is a little surprising, perhaps intended to wrest control of the narrative back from Sunak whose Government is enjoying a rare few days’ grace from public scandal or political mishap.  But the popular appeal of the plan to voters, made to endure services in recent years that would make Michael O’Leary blush, is undeniable.  In YouGov’s most recent polling, well over 50% of the public back nationalising train operators, with only 2% strongly opposed to the idea.

So why is the policy so appealing?  Well, after decades of continual investment and improvement that led to almost 90% of trains arrive on time by 2020/21, public faith in passenger rail has collapsed as fast as the quality and reliability of services. The rail timetable became almost entirely redundant as operators, infrastructure providers and unions battled over pay, performance and safety – to the extent that now little more that 60% of services arrive on time.

Perhaps no wonder that only three in five people believe it’s worth paying thousands for a season ticket of hundreds of pounds for a single trip between London to Manchester.  Rail bosses may quite reasonably point to the multitude of challenges they’ve faced but many will argue they haven’t done enough to make the public supportive by offering a plastic service at a platinum price.

The danger, of course, is that political principle gets in the way of pragmatism while offering more promise than is deserved. My former employer, Network Rail, was reclassified as a public body in 2014, which was seen as a moment of glory for some but served little more than to place billions more pounds of debt onto the public purse – debt that has become rather more expensive to service of late.

Likewise, when operators’ contracts have been rescinded in the past, the tangible impact on customers has proven marginal at best.  All things being equal, rolling stock remains the same, TUPE transferred staff retain their rights to work (and strike) as before and the chance of your train being cancelled or arriving on time is about as likely as it ever was.  From people to places and products, the core assets of the railways will remain the same whoever takes the helm as controller in chief – and ministers would still need the experience and expertise of the UK’s operating companies to stand a chance of nationalisation working.

The industry needs significant new funding, certainty over essential major projects, like HS2, that could break the bottlenecks that beset major lines, and a new social contract with unions and workers to re-engage an employee base currently too intent on undermining the aspirations of passengers.   Of course, there’s also the small matter of rebuilding public trust so that more people return to the network, reducing the need for costly public subsidies as they do.

Much of this is not the fault of the private train operators themselves but in the face of an existential crisis the industry needs to put itself on a campaign footing to win back the support of its stakeholders.  It must show it is listening and actively engaging and inspiring workers, passengers and the tax-paying public to prove that the current model can deliver.

If it cannot change is coming and while nationalisation is not a panacea for all the railways’ ills it would make clear to the travelling public who to blame – or thank – for their rail services.  This may provide a welcome boost in commuter votes in critical swing seats this year but Labour will have no place to hide, or private operators to bemoan, if it hasn’t delivered a demonstrable improvement in services at the end of a first term in power.

By Dom Pendry, Group Managing Director at Citypress