Anyone who is from or has been to the UK will know just how strange and expensive the rail transport is. Getting from one major city to another can often cost more than a plane ticket to another country, trains are often overcrowded, late, or cancelled. A guideline was made to fix these problems by the previous Conservative government via a plan known as the Shapps-Williams Plan for Rail (named after the then Transport Secretary, Grant Shapps, and the chair of the Rail Review Keith Williams), which was effectively a nationalization of the railways under a new company called Great British Rail or GBR.

GBR being mentioned during both the 2023 and 2024 Kings speech, make this subject one of the very few points of agreement between the previous and current government, as Labour have committed themselves to continue with the process of establishing Great British Railways.

Now, to understand how we got to this point, we need to go back to 1996. Back then, the UK’s passenger rail network was in the process of going from being nationalized under British Rail, to the current rail franchising system. This new deal consisted of the government offering contracts to private companies for groups of rail routes. Some of these routes were profitable, others less so. The deal was that would have to operate all routes within their franchise so as not to deprive smaller towns of their vital rail connections (and to not lose the profitable ones from their group).

This system had been in operation ever since, with each franchise being auctioned off. The problem arose when many of these franchisees have gone bust, meaning that the government has had to operate the franchise themselves (becoming the Operator of Last Resort). Things have gotten so bad that last year; for the first time since the rail franchise system was introduced; the biggest rail operator in the UK was the government after it became the Operator of Last Resort for TransPennine Express. That meant that the government was running six different rail franchises across the UK: London Northeastern Railway, Southeastern, Northern, Transport for Wales, ScotRail, and now TransPennine Express. Even before these companies went belly-up, it quickly became clear that the franchise system wasn’t working since franchisees were not meeting the terms of their contracts. This was happening because companies had to overpromise in order to get the franchise, but usually ended up underdelivering, and the state was forced to step in.

To compound things, in 2019 the COVID pandemic hit, and the problems were exacerbated.  The franchisees had to run the routes irrespective of passenger numbers, and with COVID regulations preventing people from being able to leave their homes, the franchising model became unsustainable. During the pandemic, the government stepped in and simply ended the contract system, giving all operators the chance to transfer all revenue and cost risk to the government, with the franchisees being paid a small management fee in return for continuing to run the services. In essence, this was temporary nationalization, although even at the time, it was understood that it could be the beginning of the end for the franchise system. The Shapps-Williams Review recommended the creation of Great British Railways, an organization that would be operated by the government. The organization would own the infrastructure, though it would not own the actual trains themselves. They’d receive the fare revenue and run and plan the timetables for passenger rail. In order to also simplify the chaotic network of responsibilities related to rail infrastructure in the UK, Great British Railways would take back control of all the railway tracks.

This was the plan under the last Conservative government. Labour wants to go further. They’ve suggested that they’ll try and cut waste and will claw back shareholder dividends—something that could save around £2.2 billion. Additionally, they’ll create a new Passenger Standards Authority, which will act as a watchdog for the new Great British Rail, as well as creating digital season tickets across the network and establishing a new automatic delay repay system.

To do this, they plan to wait until the contracts for the franchises expire naturally, at which point they’ll be taken under government control and will eventually all be made part of the nationalized Great British Railways. On a sidenote, it’s worth noting that the Labour government will still allow open-access operators such as Hull Trains and Lumo to continue operating. These operators work independently from the franchises and run trains on only selected routes. Nor will Labour nationalize rail freight companies. So, while Labour would pursue nationalization, it would not be an absolute, complete nationalization.

Their aim is to have Great British Rail operational by the end of the five-year Parliament, so these changes likely won’t be implemented in a while. For now, they have introduced the new Passenger Railway Services Bill, which is a starting point for establishing Great British Railways, but it’s not yet law. So, is it the right step?

The issue of nationalization has been a recurring one in British history. Before 1914 and the outbreak of WWI, there had been growing concerns about the sustainability of the Victorian-Edwardian status quo of 150 separate companies operating throughout the country (Eerily similar problems and organization to the “current” franchising system). The 1921 Railways Act also represented a level of government interference unheard of before, but it made almost the entire national network being put under the control of the Big Four rail companies. The railways had been under de facto government control during both wars, and that basically continued when Clement Attlee’s nationalisation effort came into force in 1948, lasting until the ’97 privatization.

Supporters of state ownership argue that railways provide essential public services, promote health and social cohesion, and are crucial in combating pollution and congestion. They point out that even private train operators often receive subsidies and that foreign state-owned firms hold many shares in British railway companies. On the other hand, sceptics of nationalisation highlight that state ownership doesn’t guarantee good service or industrial harmony, the once revered German railways are plagued by delays and strikes. They also argue that investment becomes too dependent on political priorities and that many people rarely use trains, especially with reduced demand due to remote work.

Regardless of the philosophical debate, ownership of railway companies is insignificant if building new lines, stations, or depots remains nearly impossible due to planning applications taking years and costing millions. If the UK continues to face some of the highest commercial energy costs globally, any rail company will struggle to operate effectively, even if it is government controlled.