What does rail renationalisation mean and who owns the UK’s railways?

The Labour Party has re-established its commitment to bring railways back under public ownership if it wins the next election.

Speaking at the party’s annual conference in Liverpool last year, Shadow Transport Secretary Louise Haigh said putting “failing private operators in the hands of the public” would “improve services and lower fares”.

In a statement eliciting applause, Haigh promised to “cast aside the tired dogma that has failed passengers” and “bring railways back into public ownership where they belong”.

Haigh also said Labour would give communities the power to set bus routes and fares.

There has been some confusion on the party’s stance on nationalisation, after senior Labour figures offered conflicting statements about the issue last summer.

Who owns and runs the UK’s railways?

Britain’s rail network was first nationalised by Labour Prime Minister Clement Attlee in 1948 and then privatised again under Sir John Major’s Conservatives in 1993.

Network Rail, which runs railway infrastructure in England, Scotland, and Wales, is publicly owned. However, trains and most smaller stations are split into franchises run by different companies.

The pandemic significantly changed the funding of railways, after huge falls in passenger numbers brought most companies to their knees. In September 2020, the franchise system created during privatisation in the mid-1990s was scrapped. Under franchises, private operators kept fares, which gave them an incentive to generate income through price increases and increased passenger numbers.

Now the industry is being run through management contracts, which means the Government effectively keeps all the fares but also bears the risk if fewer people use the railways.

Five lines, including Southeastern and LNER, are effectively nationalised as their franchise operators were brought under Government control through the “operator of last resort” scheme.

Although the Railways Act 1993 barred the UK state from running the railways, many foreign state-owned enterprises of the Netherlands, Germany, France, Italy, and Hong Kong now all run rail franchises in the UK.

What would railway renationalisation look like?

The shadow transport secretary has not clarified how Labour’s nationalisation plan would work.

One option to achieve renationalisation is to simply let each private franchise run out and phase in public ownership one by one, which is what Jeremy Corbyn’s Labour Party favoured. However, some contracts still have many years to run — the Caledonian Sleeper franchise, for example, does not expire until 2030.

A potentially faster way of renationalising would be to make companies end their contracts prematurely. But some say this would be problematic, as the operating companies could challenge the decision in the courts.

Another consideration is the trains themselves — known as rolling stock. Rolling-stock companies own and maintain most of the trains, which they lease to the operating companies. It’s unclear whether a Labour government would buy out rolling-stock companies and lease them to operators.

68% of the public want railways brought back into public ownership

Survation poll

Is railway nationalisation popular?

A Survation poll from August 2022 showed 68 per cent of the public want railways brought back into public ownership.

Among Conservative voters, 63 per cent are in favour of the idea, rising to 78 per cent among Labour voters.

In 2018, a survey commissioned by the Independent yielded similar results: 64 per cent of the 1,500 adults polled said they would support renationalising the railways, 19 per cent said they would oppose it, and 17 per cent said they didn’t know.

What has Labour’s stance been on nationalisation?

Nationalisation has been a sensitive topic in the party. In its 2019 manifesto under Corbyn, Labour committed to bringing rail, mail, water, and energy into public ownership.

However, in July 2022, his successor, Sir Keir Starmer, said he wanted to take a “pragmatic” rather than “ideological” approach on nationalisation, adding that, for most utilities, “the answer is going to lie in regulating the market, changing the market, rather than simply taking things into public ownership”.

However, he told the Mirror: “Rail is probably different from the others because so much of our rail is already in public ownership... Pragmatically, that is the situation, and it’s going to be the situation for some time to come.”