The Labour government is set to launch legislation to nationalise the railways as a matter of priority, with takeovers of some of the UK’s busiest operators expected within months.
Nearly three-quarters of train journeys in Britain are expected to be on nationalised rail services within a year under Labour’s plans, according to a Financial Times analysis of official data.
Transport secretary Louise Haigh has secured priority status for the passenger rail services public ownership bill, due to be introduced to the House of Commons on Thursday, Labour officials said.
Haigh said the government would “move fast and fix things”. “Our transport system is broken, but today’s bill will pave the way for better trains that work for everyone, no matter where you live,” she added.
The legislation is intended to renationalise the rest of the railway after about 40 per cent of services were taken over by the previous Conservative administration as operators failed over the past decade.
“We are looking to move really quickly on it, this is legislation that can be enacted pretty quickly,” said one Department for Transport official.
However, officials are not certain when the bill is likely to reach Royal Assent given that there is a lengthy recess in August and next week will be given over to general debates over the wider policy agenda set out in the King’s Speech.
Under the bill, contracts to run train operators that are let to private companies will be permanently returned to the government as soon as they expire.
But industry bosses are preparing for ministers to exercise break clauses in these contracts in order to bring operators in-house earlier, to deliver on the government’s promise to finish the job within this parliament.
The franchises with break clauses due to expire in the near term are Greater Anglia and West Midlands on September 15, but the legislation is unlikely to have passed by this point.
However, five franchises have break clauses coming up in the first half of 2025, by which time the bill may have become law. Those are Chiltern and Thameslink, Southern and Great Northern on April 1 next year, South Western Railway on May 28, Great Western on June 22 and c2c’s Essex Thameside on July 20.
If these are all taken into public hands then 72 per cent of the distance passengers travel on mainline rail in Britain will be on trains controlled by the state by the end of July 2025, according to the FT analysis.
The FT identified which rail companies have contracts due to expire by July 2025 or that have already been taken under direct state control, then calculated what share of the total distance travelled was undertaken on these rail lines.
Industry executives said they expected operators to be folded into a unit of the transport department known as the Operator of Last Resort (OLR), which has been running several lines that the previous Tory government was forced to nationalise, including LNER and Northern.
The scale and complexity of the rapid nationalisations could put pressure on the OLR, which is staffed by about a dozen people, industry bosses warned.
Andy Bagnall, chief executive of Rail Partners, which represents the private train companies, agreed the industry needed “radical reform”, but said cutting out the private sector completely could increase costs over time.
Haigh has also promised to nationalise struggling operators more quickly if they are in breach of contract for poor performance. She has been particularly critical of Avanti, which runs trains on the West Coast mainline linking London to Birmingham, Manchester, Liverpool and Glasgow.
“We are seeking legal advice and exploring options at the moment,” said one government figure.
The break clause in Avanti’s contract does not come until 2026, and industry executives have privately warned that unless the company is clearly in breach of performance targets then ministers will struggle to nationalise it sooner.
In the long term the government plans to create a new quango called Great British Railways to run the rail system, including both trains and the infrastructure owned and operated by publicly owned Network Rail.
However, the legislation to create GBR, which was also in the King’s Speech, will take about 18 months to pass through parliament, according to government officials.
In the interim ministers will appoint a chair for a new “shadow GBR” consisting of Network Rail, the transport department and the Operator of Last Resort working closely together.
This article was written by Philip Georgiadis, Jim Pickard and Clara Murray from The Financial Times and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.