Only by reuniting track and trains can Labour bring ticket prices down

When deciding Labour’s approach to running our railways, I hope the party leadership don’t talk down our railway’s recent successes. Passenger numbers have more than doubled from around 600 million journeys per year in 1994 to 1.3 billion today. Despite some high profile crashes between 1997 and 2001, our railways are now amongst the safest in the world. And many parts of the country have seen significant investment in new rolling stock and vastly improved stations.

However, Ed Miliband would be right to argue that many of these successes have been achieved not as a result of privatisation, but rather in spite of it. And to some extent this is reflected in his most likely proposal: sticking with the current structure – the publicly owned Network Rail running track and stations, and the right to run services contracted out as franchises – but with a public sector comparator allowed to bid alongside existing private operators.

There is no reason the public sector should be any better or worse at running trains than the private – providing, of course, railway professionals and not civil servants are in charge,. After all, nine out of the sixteen franchises are run by firms that are at least part owned by the Dutch, French or German Governments.

However, I don’t think introducing a public sector comparator will do enough to address the great failing of the privatised railway: the sky-high price of many tickets.

This has its roots in the sharp increase in operating costs in the aftermath of the Hatfield crash in 1999. Just three years ago the Government’s independent reviewer Sir Roy McNulty concluded that unit costs were still up to 40% higher than railways on the continent.

As a result public subsidy shot up to levels British Rail could only dream of, and in bringing this back down, both Labour and Coalition ministers decided passengers should plug the gap. This is why season tickets have been allowed to rise above inflation in every year since 2004 – not, as the RMT tend to suggest, because of excessive profiteering by private operators.

To reverse this trend we would need to dramatically reduce the costs of our railways. Many experts believe this can be achieved through reuniting infrastructure and operations under one common management structure. While the first part of this jigsaw is in place – with track and stations owned through Network Rail – it will remain incomplete if Labour persist in contracting out operations. While some contracts may go to the public sector comparator, this isn’t guaranteed, and it almost certainly won’t be all of them.

Like many, I believe that Labour should allow all the existing franchises to run their course and hand them back to a single public operator. Only then will we be able to combine this public operator with Network Rail and recreate a vertically integrated railway – as is the norm in Europe. And only then will we be able end the uncertainty of franchising, realise efficiencies from long-term planning and bring ticket prices down.