Labour criticises planned rail overhaul and calls for “fuller public ownership”

Jim McMahon has told the Secretary of State for Transport that the long-awaited overhaul of the rail industry unveiled by the government this morning “doesn’t go far enough” and called for “fuller public ownership”.

Responding to a statement from Grant Shapps in parliament today, the Shadow Transport Secretary told MPs that “the state, the travelling public and those excluded from the railways because of accessibility, have been given a poor deal”.

“While I welcome steps to increase public control and ownership over the railways, it doesn’t go far enough,” he argued. “I believe that there is ample proof that fuller public ownership rather than the concessionary model would be better.

“I fear the government have not fully understood the scale of the challenge in front of them, and in doing we may see the change of name on the side, but fundamentally passengers will still left short changed.”

A white paper published today proposed that rail infrastructure and services be placed under the control of a new arms-length public body, ‘Great British Railways’, with franchises replaced by contracts held by private firms.

The contracts will incentivise private firms on punctuality and efficiency rather than raising revenue. Great British Railways will run and plan the network, as well as providing online tickets, information and compensation for passengers.

“Can he confirm whether a publicly owned provider will be able to bid for these concessions?” McMahon asked today. “Can he also confirm if an ‘operator of last resort’ will continue to exist, and if so, will it be brought fully back in-house?”

He also asked the minister to confirm reports that the Treasury is demanding cost cuts of between 10% and 20% and said “the real driver behind bringing track and trains under one group is at its heart a move to disguise painful cuts”.

Shapps said this morning that the proposals put forward are “absolutely not” a “hidden agenda”, but that the taxpayer had plugged a £12bn hole during the health crisis and any future government would have to “weigh those things up”.

Rail franchises were effectively ended when the government took over the financial liabilities of operators in March 2020 to keep services running amid the collapse in demand caused by the pandemic, at a cost to the taxpayer of £12bn.

The plans put forward by the government this morning included proposals for a new flexible season ticket to be introduced from late June to tempt back part-time commuters, with passenger numbers now only 39% of pre-Covid levels.

McMahon pointed out that few details on the flexible season ticket had been released and said this, combined with uncertainty over whether it will make travel cheaper, “renders it meaningless for millions of passengers”.

The Shadow Transport Secretary also stressed the need for a bus and train system that “genuinely connects people”, arguing that the report does not tackle the problem of timetables for different systems not joining up.

He called for greater train station responsibilities for metro mayors, asking the minister: “What devolved powers does he envisage for our metro mayors and transport authorities as part of his plan?”

Shapps told the Commons this afternoon that “this is not renationalisation, which this government continues to believes failed the railways – rather it is a simplification”, saying that the new body would operate in the same way as TfL.

Prime Minister Boris Johnson said earlier that he is a “great believer in rail, but for too long passengers have not had the level of service they deserve”. He said the plan would “deliver a rail system the country can be proud of”.

TSSA general secretary Manuel Cortez criticised ministers after the plans were announced this morning, accusing the government of “papering over the cracks” within the existing system of privatised railway provision.

Also commenting this morning, TUC general secretary Frances O’Grady said: “We should avoid any version of the failed privatisation model. We need our railways fully back in public hands. If every penny from every fare goes back into the service, our railways will be better quality and better value.”

RMT general secretary Mick Lynch described the plan as a “missed opportunity”, adding: “The government talk about ending a generation of fragmentation but then leave the same private companies in place to extract fees that could be invested in building a truly integrated national rail network.”

Below is the full text of McMahon’s response.

It is two and half years since the Williams review was first commissioned. And the very fact that Williams was commissioned at all shows that the state, the travelling public and those excluded from the railways because of accessibility, have been given a poor deal.

And whilst much has changed on the network over that time due to Covid, what he’s announced today is pretty much what was briefed out and reported in The Telegraph in November of last year. So, can I firstly ask the Secretary of State when he settled on this position? And if it was back in November, why he didn’t announce it then?

It is said that control of both the infrastructure and the contracting of train operations, will be given to the arms-length government owned body, with private firms bidding to run concessions, with an agreed profit margin built in. Can he confirm whether a publicly owned provider will be able to bid for these concessions? Can he also confirm if an ‘operator of last resort’ will continue to exist, and if so, will it be brought fully back in-house?

It’s been reported that the Treasury is demanding cost cuts of between 10% and 20%. Can he confirm this is the case? There is concern that rather than increased investment, the real driver behind bringing track and trains under one group is at its heart a move to disguise painful cuts. Any talk of cuts in funding like the £1bn funding cut Network Rail that we have already seen, will have a direct impact on jobs, our regions and vital maintenance and upgrade works. Does the Secretary of State know how many jobs will be lost by a 10% or 20% reduction in funding, and what assessment has he made of the impact in each of our regions?

The head of Network Rail, Andrew Haines, and its chairman, Sir Peter Hendy, are to be tasked with drawing up the processes and structures of the new Great British Railways. What date will they report by? And Mr Speaker can I ask him about freight. Can he say more about how the reforms will impact the Track Access regime, and the governance arrangements for freight if Network Rail takes charge of the passenger railway, albeit under a different name? Decarbonising transport will mean a much greater shift is needed from road to rail. How will the reforms help rail freight grow as part of decarbonising freight transport, and what targets will he set in this respect?

Mr Speaker, the government has also made an announcement on flexible ticketing; though few details have been provided. A lack of detail on any flexible ticket promise, and whether it will make travel cheaper for the average commuter renders it meaningless for millions of passengers, and completely fails to meet the scale of challenge required to encourage people back onto the rail network as we come through the pandemic. What research has the government done to see if type of product will address the needs of the travelling public?

Mr Speaker, this report fundamentally fails to tackle one of biggest issues with our public transport system that timetables for modes of transport just don’t join up. We need a bus and train system that genuinely connects people rather than leaves them standing around in the cold waiting for connecting services. Will the Secretary of State work towards joining up different modes of transport, and what devolved powers does he envisage for our metro mayors and transport authorities as part of his plan?

And on devolution. Will the government finally follow through on transferring train station responsibilities to our metro mayors, as expected in Greater Manchester some years ago? We haven’t seen any detail on what profit margin operators can expect, and whether the cost of this will hit fares or investment. Will he publish this?

Finally Mr Speaker, while I welcome steps to increase public control and ownership over the railways. It doesn’t go far enough, I believe that there is ample proof that fuller public ownership rather than the concessionary model would be better. I fear the government have not fully understood the scale of the challenge in front of them, and in doing we may see the change of name on the side, but fundamentally passengers will still left short changed.