Labour’s plan to renationalise part of the railway system is welcome, but leaves the expensive mess of rail privatisation largely intact, explains Kevin Crane

A rare tilt left

After four years of Sir Keir Starmer’s leadership of the Labour Party, broken promises and reactionary lurches have taken on a monotonous quality. The scrapping of progressive policies and positions has been constant, of which the Green New Deal was a particularly significant example.

Left position after left position have been gleefully tossed aside by Starmer and his acolytes, to the point where there’s really not been much remaining on which to be more right-wing. For this reason, many people had been looking at public ownership of the railways as an unusual remnant of social democracy in an otherwise entirely austerian and conservative offering by the party. Many people genuinely suspected that it was next for the chop … which on 25th April was noisily confirmed not to be the case. Labour has, for the first time in years, been making headlines with a policy from the left.

The media response has been absolutely to amplify the party’s message, with the BBC and most newspapers headlining the announcement as some version of ‘Labour will Renationalise the Entire Rail Network’. The Tory papers have of course been blaring the usual nonsense about authoritarianism and costs to taxpayers, while the centre-left press is hugely enthusiastic. The liberal papers are not, however, as enthusiastic as the trade union leaders, who are practically hyperventilating with joy. The three specialist rail unions – RMT, Aslef and TSSA – have all rushed out praise for Labour’s re-affirmed policy.

In some respects, this is a surprise, as we should note that the party has not changed its official line: they are all just giddy with relief at not having to respond to betrayal over the issue. Campaign groups like We Own It and Bring Back British Rail have also been very positive, although in fairness they have been bit a more explanatory than the union leaders about what this all means in real terms. Those details are not just fun facts for rail geeks, they really do matter.

Personally, I am not surprised by this turn of events (or absence of a turn, we could say). Starmer and his miserly shadow chancellor, Rachel Reeves, maintained a very long period of silence on rail, during which I would be very surprised if they hadn’t been open to ditching public ownership. I think they simply determined that it wasn’t an option, not least because what ‘public ownership’ actually means is much more complicated than most people in Britain would like it to be. Labour is pressing ahead with this policy, not out of convinced belief, but because they have determined it to be the least-worst way to split the difference between a functioning railway and pleasing the corporate world, and they have come to that conclusion because they’ve been watching the Tories fail to come up with any other solution.

How the railways (don’t) work

Rail in Britain is one of those things that’s difficult to understand, not because you’re stupid, but because it is. It is a mess of janky institutions, resulting from thirty years of successive governments determined to keep the industry in the private sector, despite the fact that it has never succeeded as a profit-making business. The categories of companies are:

• Network Rail – the sprawling company that maintains rail infrastructure, hastily renationalised in 2002 after private maintenance was exposed as the cause of some fatal accidents.
• Rolling stock companies (Roscos) – capital-investment companies, mostly owned by banks, that own trains and lease them to operators.
• Freight operators – fully private companies that carry freight only.
• Open access operators – small privately-owned operations that run very specific routes, such as Hull Trains.
• Train Operating Companies (Tocs) – the companies that run passenger services in the regions, these are notionally private sector, but actually depend on public subsidy, thus making profits for their owners (mostly foreign transport companies, many of them ironically state-owned) no matter how hard they fail.

It’s Tocs that are really the key controversy here. Tocs run stations, define timetables, and sell tickets. It’s Tocs that you are consciously aware of interacting with when you travel by rail, and it’s the Tocs that give you all the major headaches with that experience. Like many of the late-twentieth-century privatisations, they are fundamentally regional monopoly companies masquerading as merchants in a market. Why are tickets so expensive and irrational? Because Tocs are incentivised to make you pay as much as possible and take journeys that favour their trains over their rivals. Why are services so unreliable and unhelpful? Because Tocs are incentivised to keep costs down and run the bare minimum journeys that achieve the approximation of a full service. I am over-simplifying here, but not by very much.

The Tories, recognising that the situation has been unsustainable, released the Grant-Schapps report in 2021, on the basis of which they spent millions establishing Great British Railways (GBR). Great minds went to work in gleaming new offices on how GBR would come up with thrusting new ideas to make passenger rail work properly. And then … nothing happened.

Nothing at all came of GBR. There were a series of increasingly muddled policy announcements, most of them too dull to remember, let alone recap. The legislation to launch GBR was quietly shelved after a year. The lack of action partly reflects the extent to which the Tories became much more focused on their internal controversies than actually running the country, but it was also partly because they were running up against the same mental barrier as their New Labour predecessors had twenty years before. They wanted to solve problems caused by fragmented private ownership of train operations without ending fragmented private ownership of rail operations. In theory, they’d aspire to bring ticket prices down and make timetables more regular, but the first of those things is revenue and the second is expenditure, and private for-profit companies cannot release control of these. The Tories ultimately decided that they cared more about the profits of those companies than they did about a decent railway, so they have just held the failing system in stasis. Actually, they’ve done that with a lot of the economy, but it was just very obvious in the case of rail.

Conflict, compromise and catastrophe

Labour has watched the absurd hokey-cokey dance the Tories have done with GBR and the Tocs and accepted that they don’t want to reproduce it. And that is a good thing, taken on its own. You need to take it in with the full picture though.

Labour has explicitly ruled out public ownership of anything other than the Tocs. Freight is notably staying private, which you may think doesn’t bother you. A typical Briton, however, unknowingly relies on rail freight much more than they do passenger service, even though they don’t know it, and the private sector is currently failing to deliver the freight tonnage targets we urgently need for decarbonisation. Labour is also planning to allow ‘open access’ contracts to proliferate, giving private operators massive scope to continue to profiteer in less obvious ways.

More seriously, however, there is absolutely no talk of taking on the power of the Roscos, which is going to cost us all big time, metaphorically and literally. These companies, which basically own all the actual trains, are the exact same sort of rent-extraction machines that are strangling every other part of the economy. Peaceful coexistence between a people’s railway and exploitative, extractive Roscos will not hold.

So, while it would be extremely obtuse to say that Labour’s policy is bad, it would be naïve to say it was adequate, let alone particularly socialist. Labour will find its policy relatively easy to implement, even in the face of private-sector opposition. Tocs’ contracts all have fairly short renewal periods. A Labour government with a healthy parliamentary majority can simply refuse to renew them with very little scope for the privateers to retaliate, even with what will undoubtedly be unhinged screams of protest from the right-wing media and the Tories.

The position of the left during that process needs a healthy combination of strategy, nuance, and scepticism. Yes, absolutely support the end of useless parasitic companies like Arriva and Northern Rail, but do not accept arguments that everything is now fine, or that it is just about to be. Labour in government will wring every drop of credibility that they can out of this issue, as cover for further austerity. Crucially, the union leaders will partner with them in this, desperate as they are to recover from a series of mass strikes that they ultimately lost. Last year’s defeat of the Tories over ticket-office closures was used as cover for disorderly retreat by the unions, and a final defeat of the Tocs will be that, times ten.

Tory rail policy is crashing and burning, but the damage done to the railways is nowhere near being reversed. While the discussion about public ownership is playing out, a shadow still looms over Litchurch Lane Train Works in Derby. Rishi Sunak’s catastrophic policies still threaten to close Britain’s last train-manufacturing facility, with a new order for Elizabeth line vehicles staving off disaster for no more than around six months. Even if Labour do get into government before that lifeline runs out, they still haven’t announced a policy that will save the many thousands of jobs and crucial technological capacity that the site represents. We still have to demand so much more to get to where we need to be.