Transport Secretary doesn't know cost of rail nationalisation

4 December 2024, 10:41

Transport Secretary Heidi Alexander could not say what the cost of nationalising rail operators will be, but said it would be "a fraction" of what is currently paid in management fees to train companies.

Ms Alexander announced earlier today South Western Railway will become the first train line to be transferred into public ownership next year.

The nationalisation will mark the first of a series of British train lines becoming state-owned in what Labour has described as a “major shake-up” of the country’s railways.

Speaking to Nick Ferrari on LBC about its costs, Ms Alexander said: "So it will be a fraction of the costs, for example - to bring them over and also sort of set up Great British Railways - a fraction of what we're paying in terms of the management fees.

"At the moment, we pay roughly about £150 million pounds in management fees to the train operating companies."

Ms Alexander said she did not have a specific figure but added the setup cost would be less than the £150 million current management figure.

The transition to a publicly owned railway is designed to improve reliability and boost economic growth by encouraging more people to use trains.

Today’s announcement comes after The Passenger Railway Services (Public Ownership) Act 2024 passed through Parliament last week and marks the start of all of Britain’s train lines returning to public ownership.

Moving Britain’s railways to public ownership will cut down the “unacceptable levels” of delays, cancellations, and waste seen under decades of failing franchise contracts, ministers claim.

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The Government said the change will save up to £150 million a year in fees alone by ensuring money is spent on services rather than private shareholders.

Today's announcement will see services across southern England and East Anglia come back into public control by autumn 2025.

Ms Alexander had earlier said: "For too long, the British public have had to put up with rail services which simply don't work. A complex system of private train operators has too often failed its users.

"Starting with journeys on South Western Railway, we're switching tracks by bringing services back under public control to create a reliable rail network that puts customers first.

"Our broken railways are finally on the fast track to repair and rebuilding a system that the British public can trust and be proud of again."

Union bosses have hailed the decision, praising it as a move that can help “rebuild Britain.”