Conservative response to nationalisation of South Western Railway

Gareth Bacon MP, Shadow Transport Secretary, said:

“Labour promised their rail renationalisation plans will bear down on ticket prices, end disruption and strikes, and lead to better onboard services.

"We are concerned that since the Labour came to power their need to satisfy their union paymasters led to a 15% pay rise with - incredibly - no strings attached, which was paid for by already hard-pressed commuters who have been faced with a 4.5% increase in rail fares. Only running rail services through private companies has kept bills as low as possible.

“Labour have talked up the benefits of renationalisation for years and they will now have to deliver on their promises of lower ticket prices, an end to all disruption and strikes and better onboard services. The alternative is that, as usual, British taxpayers have to foot the bill for Labour.”

ENDS

Notes to editors:

Labour have promised their rail renationalisation plans will reduce ticket prices, end disruption and strikes, and lead to better onboard services:

• Labour said nationalisation would improve performance. HAIGH: ‘Our plan will deliver better, more reliable services for passengers, underpinned by a guiding focus on the public interest' (Hansard, 29 July 2024, Vol.752, link).

• Labour said nationalisation would make services more affordable. The Department for Transport said: ‘Services across England will return to public control, transforming our railways into a more reliable, affordable and accessible system' (DfT, Press Release, 4 December 2024, link).

• Labour said nationalisation would deliver ‘better value for money' for taxpayers. ALEXANDER: ‘So we're going to be establishing this brand-new organisation, which is called Great British Rail. It brings together the management of the trains, the day-to-day operations of the trains with the people who manage the tracks, the signalling, the infrastructure. At the moment we've got this dizzying array of organisations that are involved in running the railways, 14 train operating companies, Network Rail, different bits of government. We want to simplify that to ensure that people get more reliable, better train services and that we offer better value for money to the taxpayer as well, because in the current arrangements there's a huge amount of waste and inefficiency' (Sky News, 18 February 2025, archived).

• Labour said nationalisation will ‘save tens of millions pounds each year' that ‘can now be reinvested in the railways. HAIGH: ‘It also makes financial sense, saving tens of millions of pounds each year in private sector fees. That money can now be reinvested in the railways, where it belongs, to fund improvements to services and infrastructure' (Hansard, 29 July 2024, Vol.752, link).

• Labour said nationalisation would ‘end fragmentation and waste'. HAIGH: ‘Running the network, both track and train, as one integrated system will finally put an end to the fragmentation and waste that has plagued our railways since privatisation' (Hansard, 29 July 2024, Vol.752, link).

However, Labour have prioritised their union paymasters over passengers:

• ASLEF and the RMT have donated over £400,000 to the Labour Party since Keir Starmer became Labour leader. Since Keir Starmer became Labour leader on 4 April 2020, ASLEF and RMT have donated £424,215 to the Labour Party (The Electoral Commission, Donation Search, accessed 22 May 2025, link; Conservative Research Department Analysis, 22 May 2025, available on request).

• Labour capitulated to the unions, bribing train drivers with a ‘no strings' pay agreement, causing chaos on the railways. In August, ASLEF union members were offered a 5 per cent backdated pay rise for 2022-23, a 4.75 per cent pay rise for 2023-24, and a 4.5 per cent increase for 2024-25. The union accepted this offer in September and called the agreement a ‘no strings deal'. Over Christmas, numerous services were cancelled because train drivers rejected overtime (DfT, Press Release, 14 August 2024, link;BBC News, 18 September 2024, link; The Times, 12 December 2024, link).

• Labour's Autumn Budget hiked up regulated rail fares by 4.6 per cent, one percentage point higher than RPI inflation, punishing commuters. ‘The government confirms that the annual regulated rail fares cap will rise by 4.6 per cent on 2 March 2025, one percentage point above RPI' (HM Treasury, Autumn Budget 2024, 30 October 2024, link).

Only running rail services through private companies has kept bills low:

• Since 1999, Britain's passenger growth grew at a faster rate than that in France, Germany, Italy, the Netherlands, and Spain. Since 1999, Great Britain has seen the higher passenger growth rates than France, Germany, Italy, the Netherlands and Spain.

• The growth in passenger numbers meant industry was able to fund a greater proportion of its day-to-day operating costs from revenues, eventually generating a surplus. The growth in passenger numbers, revenue and firm cost control overseen by industry and train companies led to the overturn of an operating deficit of around £820 million in 1997/98, to generate an operating surplus for the taxpayer in many years prior to the pandemic. This meant the industry as a whole was able to fund its day-to-day operating costs from revenues without relying on government support.

• By removing the private sector from the railways, the Government is removing the part of the system that has a proven history of generating a surplus. In November 2024, the Chief Executive ofRail Partners, Andy Bagnall, said: ‘Before franchising was swept away by the pandemic, train companies paid billions of pounds into the Treasury. In removing the private sector from the railways, the Government is getting rid of the part of the system with a track record of delivering growth in passenger numbers to reduce subsidy at a time when rail finances are yet to recover from the pandemic. They now need to set out an alternative of how they will deliver more reliable and affordable services for passengers and taxpayers'.

• Additionally, the Government is removing a source of investment. Since privatisation, more than £1 billion of private-sector funding has been invested in our railways.

• This could increase public subsidy of the railways. Subsidies for publicly run rail services are increasing. Between 2022-23 and 2023-24, total public subsidy for these services increased by £11 million from £2,467,300,000 to £2,478,400,000. In contrast, public subsidy for contracted services reduced by £558.7 million from £2,141,100,000 to £1,582,400,000.

Labour's plans are irresponsible:

• Labour's reckless plans will bring the best performing operators into public ownership, worsening services for commuters. Greater Anglia, which is scheduled to transfer into public ownership in Autumn 2025, is among the three most reliable rail operators (The Telegraph, 4 December 2024, link; Department for Transport, Press Release, 4 December 2024, link).

• Labour's reckless plans could result in unions striking in an attempt to ‘level up' working conditions. In response to Labour's plans, a senior rail source said: ‘the unions would love to see harmonisation across the sector, because if you have a single employer with set terms and conditions then it only goes one way' (The I Paper, 13 January 2025, link).

• Labour's reckless plans will deter investment into our railways. Since privatisation, more than £1 billion of private-sector funding has been invested in our railways. By removing private sector operators from the railways, Labour is removing a key source of investment (DfT, Great British Railways: The Williams-Shapps Plan for Rail, 20 May 2021, link).