Opinion: Haigh launches Shadow GBR

Labour's nationalisation plan is ideologically driven, says Christian Wolmar, and it is unclear whether or when it will solve the sector's real problems.

How many bills does it take to put the railways back in order?

As we now know, there are two bills in the pipeline this Parliament. The first, with the cumbersome name of the Passenger Rail Services (Public Ownership) Bill, passed its first stages in the House of Commons on 3 September.

The debate was long, but it was hardly enlightening, most of the time being taken up with inaugural speeches (more than half the deputies were new) on subjects that had nothing to do with the railways.

The purpose of this bill is simple: to allow the government to take over franchises when current contracts expire or are under review. The government will no longer have to wait for operators to find themselves in difficulty before it can pounce and add franchises to its collection of four under the umbrella of the operator of last resort. Instead, the default position will be to take them over.

Transport Secretary Louise Haigh reiterated the reasons for the bill, highlighting how the railways' performance had collapsed under the Conservatives.

But even if that is true, we have heard all this before. What we need to know now is precisely how Labour's solution, which is to bring the franchises in-house, will address the fundamental failings of the rail sector.

In a well-researched and coherent speech, Shadow Transport Secretary Helen Whately, new to the field as Social Affairs Minister in the previous government, complained about the haste with which the bill was being passed.

She is right to say that this is all being rushed, although that is not necessarily a bad thing. Labour has made its intentions clear about its plans in its manifesto, and it is well within its rights to push forward a policy that has been well prepared before the election.

The new government's focus on this policy is driven by its desire to demonstrate that the reversal of a key Conservative policy – the privatisation of the railways – has been a failure. The railways are seen as emblematic of the much wider policy failures of their Conservative predecessors, which is why Labour ministers are so keen to push through this policy.

When Whately complains that this is based on ideological politics, she is right.

But as I have written many times, the Conservatives' privatisation of the railways after the 1992 election was purely ideologically motivated, because at that time British Rail was running the most efficient railway in Europe and meeting both its commercial and social objectives.

The importance of the railways to the Labour government's plan is both good and bad news for the sector.

The good news is that establishing a new, more coherent structure for the industry has long been recognised as a priority.

Let’s remember that this process of change was launched by the Conservatives after the timetable debacle of May 2018. The sector has been in a period of limbo since then, with the creation of the Great British Railways Transition Team, which has spent at least £64 million (and probably much more, given that this figure did not include the organisation’s work on ticketing reform), without showing any concrete results. Therefore, there is no denying that the rapid implementation of the new railway structure is a good thing.

The problem is that it is not clear whether the new ministers have a clear understanding of what they are trying to do and (more importantly) how they will deliver results quickly enough to justify the rush and upheaval.

Little is known about the precise nature of the second bill, which is expected to be presented to parliament early next year. But some indication of it was given in a separate announcement by Haigh confirming that she would create a new organisation to be called Great British Railways – albeit Boris Johnson’s baby.

In the announcement, Haigh set out five missions for the shadow government she has launched (everything for this government is about “missions”, and usually five of them), most of which are considered highly worthy, such as “improving services for passengers and freight customers” and “ensuring financial stability”.

But the interesting point that industry players are seeking clarification on is the direction of this new organization.

There is much talk, for example, about who will chair the committee. But in a way, that is irrelevant. Haigh has already said that she will be the “chief passenger” and will therefore be expected to make (or at least oversee) the major decisions.

Confusion remains, however, as to the precise structure of the railways once the GBR was established.

This is a work in progress, as one of the missions is confusingly called “GBR End State Design”. In other words, the Shadow GBR will be tasked with designing the structure of the permanent organization.

So we have not made any progress in the pre-election debate over whether GBR will be a “railway with lipstick” (as one insider put it) or a completely new organisation with a group of directors appointed by Haigh, who will run the operations.

Interestingly, in her letter to stakeholders she stressed that this new organisation would not interfere with any of the existing tasks and responsibilities of the various existing players – the Department for Transport, Network Rail, the operator of last resort, etc.

So we are looking forward to what will come out of this case. But we do not yet know exactly what awaits us after the adoption of the second bill.