The thing is there are multiple companies/sectors involved here, and this isn’t addressing the worst of them (yet, if ever).
First you have the railway lines themselves. These are run by Network Rail, which is already a part of the Department for Transport. This part covers a significant expense, but it’s needed and run fairly lean.
Then you have the train companies. These are the ones running the trains, they are typically private businesses. They lease rail stock (trains and carriages) and sell tickets, while paying Network Rail for the use of the lines. These are the customer facing businesses, and South Western Rail is one of them and the one nationalised in this story. In spite of having high ticket prices and revenue, they have low profits due to high costs.
Lastly you have the rail stock companies. These are the real villains, frankly, much moreso than train companies. They set leasing prices for trains, and in turn cause the train companies to run at paper thin margins. They aren’t customer facing, so the public eye isn’t upon them and they get away with a lot. They have established long term contracts, so simply nationalising a train company won’t end this deal.
However, nationalising train companies does mean that the government (either the DfT or the new Great British Railways) will be negotiating with rail stock companies. In theory, the government are a bigger entity, so have a better negotiating position, and also they should be more motivated to bring the costs down. Private rail companies make more money overall with paper thin margins on high prices, not only because a small percentage of a bigger number can be bigger, but because having a small margin puts them in a better negotiating position with local government (“You have to give us a good deal, we can’t afford to operate otherwise, and you need us”).
So nationalising train companies might lead to lower prices in future, through fairer leasing rates on rail stock. However this won’t start to happen until these contracts are renewed.
Really, a much heavier hand is needed from the government, one that focuses specifically on the rail stock leasing sector.
Should the government not be looking to own its own rolling stock in the long term?
Renationalaizing and extending rail would solve so much in basically every country in Europe. There is soo much demand for it and rail companies everywhere are just cranking up prices without expanding at all.
Well UK renationalisation is happening. Or pretty darn close to it.
We will see news like this again and again. As all the rail contracts come up for renewal. Labour plans to either nationalised or accept community coop like bids.
Expectation is all will be moved by 2027.
Honestly. It is more interesting how little of this plan is commented on in the news like this.
It was in the manifesto. And Starmer has confirmed it multiple times in parliament.
Yet we keep seeing articles talking about single company changes. And a few about accepted coops. Yet no talk about the long-term plan. Given how popular the calls for renationalisation is. It looks a little questionable that the media seems to be minimising the one left leaning thing labour is doing.
Little odd the call this the first. At least 2 other private contacts have been in the news as moved to GBR when they expire. Plus at least 2 community groups accepted as bids.
Rail contracts and train companies aren’t the problem. The problem is rail stock leasing, which has obsene prices and pushes the public-facing train companies to both be expensive but also run a paper thin margin. Nationalising the train companies won’t do anything about rail stock leasing, the government needs to focus on the root problem, not buy out the under-performing public facing business at a high price.
First off the are not buying out any companies. These companies own nothing but a short term contract to provide service. The gov is just not renewing those contracts as the expire.
As for overpriced train leases. Yeah that is an issue. But only because the companies have temp contracts. So leasing is the only practice option. Long term GBR will have other options.
This is the first “franchise” to be cancelled, the others were franchises that are extant but run by the operator of last resort.
It’s not making a bigger splash because the Tories nationalised the entire network in 2020 by abolishing all the franchises and replacing them with management contracts, whereby the operators are paid a flat fee by DfT to run the service.
The pace of absorption by GBR is dictated by the franchise terms, and operators seem to be being allowed to reach the end of their contract terms if that is in the next couple of years, or else having their break clauses invoked when they come into eligibility.
They’re nationalising the train operating companies, right? Not the company that owns the lines, which seems the wrong way round to me. The tracks and stations are the vital resources.
The company that owns the lines (Network Rail) is already nationalised. Its privatised predecessor (Railtrack) collapsed spectacularly all the way back in 2002.
All stations are owned and managed by either Network Rail or a train operating company, so this will bring all stations into nationalised ownership.
The only thing that isn’t being nationalised as part of this plan is the existing rolling stock, which is owned by yet another set of companies. But there’s no reason why new rolling stock won’t be under direct ownership, so that should sort itself out eventually.
All? Not all. One
village of indomitable Gaulsstation remains in private ownership, and that’s St Pancras. All other stations are owned by Network Rail and have been since 2002.Technically St Pancras is still state owned, but it’s on a long-term lease to a private consortium. Once the lease expires it’ll revert to direct state ownership too, it’s just that that’s got quite a long time horizon on it compared to the TOC franchises (still another 15 years away yet).
The lines were never privatised. Network rail is planned to be merged into GBR. But as it is already under dft control. The plans are a little in the air ATM.
Starmer is buddies with big tech bosses and other monopolists so nobody really believes he is gonna do any good in this area. The rest of his government might, but he is rotten to the core.
Awesome, now get rid of first bus parasite monopolies.
