King’s Speech: Labour outlines plan to nationalise rail operators
The new Labour government’s “bold vision” for a major shake-up of Britain’s railway system have been unveiled in the Kings Speech today.
“My ministers will bring forward legislation to improve the railways by reforming rail franchising, establishing Great British Railways and bringing train operators into public ownership,” King Charles said.
The reform’s include bringing all train operator’s under public ownership once their current contracts expires. Labour says the Railways Bill will save the taxpayer millions of pounds which are currently paid out in fees to private-sector companies every year.
Nationalisation has strong backing from the British public. Some 54 per cent of people surveyed in a May Ipsos poll supported the policy.
The government argues Transpennine Express, one of only four currently in the public sector, has seen a significant improvement since continued poor performance saw it brought into an operator of last resort contract in May 2023.
In the most recent quarter, it was the most improved operator in terms of cancellation scores, when compared with the same period a year earlier.
The overhaul of the UK’s railway system, which will amount to the biggest set of changes in decades, also includes the introduction of Great British Railways (GBR), an arms-length government body designed to reduce fragmentation.
GBR will provide a ‘guiding mind’ for the sector, staffed by industry experts and designed to reduce government meddling.
The new body will also pave the way for a new passenger watchdog, the Passenger Standards Authority, which will independently monitor standards and push for improvement in service performance.
Chris Simms, partner at UK law firm Burges Salmon, says: “The need for rail reform has been on the agenda since before the Covid-19 pandemic and has broad, cross-party support.”
“The transport sector has a wide range of needs from legislation and the new government and it is likely that a fuller transport act may also be brought forward in due course. For the moment, however, a short Rail Reform bill may address certain obstacles to Labour’s vision for the railways to allow it to “move fast”.
He added: “The key questions for the industry now will be how quickly this bill moves through parliament, and when the subsequent nationalisation of operators begins.”
Seperately, the Kings Speech unveiled the government’s Better Buses Bill, which aims to give local councils powers to franchise local bus services.