Labour 'could nationalise railways in five years', John McDonnell claims

A Labour government would try to nationalise Britain’s entire rail network within the first five years of taking office, shadow chancellor John McDonnell has said.

Mr McDonnell said his party was examining railway franchise contracts in detail to figure out how quickly the plan could be achieved.

Labour’s 2017 general election manifesto promised to bring back private railway companies into public ownership as current franchises expire.

Speaking ahead of the Labour conference in Liverpool, the shadow chancellor suggested a Labour government could take advantage of break clauses to act earlier than previously thought.

Asked whether the whole network could be publicly owned in one five-year term, Mr McDonnell said: “I think that’s possible. That’s why we’re working through the detail now of how that can be done.

“If you look at what’s happened over time, a number of these franchises have been handed back anyway,” he told BBC Radio 4’s Today programme.

“I think we are in a situation now where I think that is certainly possible. We want to get to within the first term of a Labour government an integrated railway system.”

Under his plans, Labour would establish a public ownership unit within the Treasury and develop legal and financial plans to renationalise industries such as water as well as the railways.

“We will have new structures of government,” he said. “I’ll be ready on day one going into government to be able to bring forward the legislation, to implement the policy.”

The unit would also advise on compensation to shareholders and help decide which projects set up under private finance initiatives (PFIs) could be taken back into public hands.

Mr McDonnell suggested that in some cases no compensation would be needed.

“We will abide by the legal advice that is provided to us. If the legal advice that is provided to us is we are not obliged to provide compensation to some, then we will follow that advice,” he said.

“There might be some factors in relation to some operations of PFIs in particular that could be brought forward that says actually there is no compensatory arrangements needed here.”

The Labour conference gets under way in Liverpool this weekend.

Speaking on the eve of the annual gathering, leader Jeremy Corbyn said he is “not ruling out” a second referendum on Scottish independence if he became prime minister.