Three rail companies serving London commuters will be renationalised by Labour next year under a “major shake-up” of British railways.
South Western Railways, C2C and Greater Anglia will be the first operators to be transferred into public ownership next year, the Government has announced.
South Western Railways will be renationalised in May 2025, C2C in July 2025, and Greater Anglia in autumn 2025.
Transport Secretary Heidi Alexander also pledged to bring Avanti West Coast back under public control, describing it as a “problem at the moment”.
Avanti West Coast operates long-distance services on the West Coast Main Line between Euston and Birmingham, Liverpool, Manchester and Glasgow and was given a new three-year contract by the previous Tory government a year ago despite ongoing criticism of its performance.
Latest industry figures show that only 41.2 per cent of its trains arrived on time between April and June - the worst performance of any UK rail company.
Ms Alexander, speaking to Sky News on Wednesday, criticised the previous government’s “scorched earth” approach to union relations.
She admitted that the “very challenging” state of rail industry finances at the moment - the Government is subsidising about half the £25 billion cost of running the railway - meant that nationalisation was unlikely to lead to a reduction in fares.
A 4.6 per cent hike in rail fares has already been announced for 2025. Ms Alexander said she wanted to avoid creating a “death spiral” by cutting services in a flawed bid to hold down fares.
The Government said the transition to a publicly owned railway will improve reliability and support its number one priority of boosting economic growth by encouraging more people to use the railway.
It will also clamp down on “unacceptable levels” of delays, cancellations, and waste seen under decades of failing franchise contracts, it was claimed.
The Government said the change will save up to £150 million a year in fees alone by ensuring money is spent on services rather than private shareholders.
However, Ms Alexander, speaking on LBC, struggled to explain how much renationalisation would cost.
Wednesday’s announcement will see services across southern England and East Anglia come back into public control in less than 12 months.
Greater Anglia, which operates services in and out of Liverpool Street, including the Stansted Express, will move into public ownership when the DfT exercises a break clause in its contract.
Last month Greater Anglia published figures showing that it has been the most punctual rail firm in the UK for the last 18 months, with trains on seven of its lines on time at least 95 per cent of the time.
The Government said it delivers on Labour’s manifesto commitment to bring contracts with existing rail operators into public ownership as they expire without costing taxpayers a penny in compensation.
Ms Alexander said: “For too long, the British public have had to put up with rail services which simply don’t work. A complex system of private train operators has too often failed its users.
“Starting with journeys on South Western Railway, we’re switching tracks by bringing services back under public control to create a reliable rail network that puts customers first.
“Our broken railways are finally on the fast track to repair and rebuilding a system that the British public can trust and be proud of again.”
Passengers will be able to buy tickets as normal. Staff working for the rail firms being nationalised will transfer over under existing employment laws.
Stuart Meek, South Western Railway’s interim managing director, told The Standard last week: “We are committed to working with the Government, and what we are really excited about is the Government’s plan for rail travel to be top of the agenda again.
“We are really keen to make the offer more compelling than ever, to get people out of their cars and on to trains. We are really excited about this new era for the railways.”
The nationalised firms will be managed by DfT Operator Limited, previously known as DfT Operator of Last Resort Holdings Limited (DOHL), whose functions will eventually be integrated into Great British Railways.
Four rail franchises have already been effectively nationalised after being brought under DfT control due to previous failings - Southeastern, London North Eastern Railway, Northern and TransPennine Express.
Mick Whelan, general secretary of Aslef, the train drivers’ union, said: “This is the right decision, at the right time, to take the brakes off the UK economy and rebuild Britain.
“John Major’s decision to privatise British Rail in 1994 was foolish, ideologically-driven, and doomed to fail. It was described even by that arch-privateer Margaret Thatcher as “a privatisation too far” and so it proved.
“The privateers have taken hundreds of millions of pounds from our railways and successive Conservative governments have pursued a policy of managed decline which has sold taxpayers, passengers, and staff short.”
Rail, Maritime and Transport union General Secretary Mick Lynch said: “This is a significant step forward for passengers, rail workers, and those who want to see an efficient rail system run for the public good, rather than private profit.
“Bringing infrastructure and passenger services under one employer in public ownership, means proper investment in operations, harmonising conditions for staff, and prioritising the needs of passengers.”
Gareth Bacon, the Conservative shadow transport secretary, said: “Labour have voted against our plan to strengthen the rights of passengers and commuters.
“We are concerned that the Government’s plans are simply an ideological undertaking that does not put passengers first.
“Keir Starmer’s latest Transport Secretary has a worrying record of failure when it comes to delivering projects on time that improve passenger services. We will closely monitor the impact of these plans.”
Transport Salaried Staffs’ Association general secretary Maryam Eslamdoust said: “This is an historic moment for the rail industry, marking the beginning of the end for the Tories’ failed privatisation experiment.
“The move will mean better value for taxpayers and better services for rail passengers. It recognises that railways should be run as a public service rather than as a cash cow for shareholders.
“We welcome the Labour Government’s recognition of the expertise and experience that railway staff - our members - possess are crucial to the changes they want to see in the sector.
“We look forward to working with them to deliver the 21st-century railway that Britain’s workers deserve.”
