Will Labour’s plan make train tickets cheaper?

The Labour government laid out its plans for renationalising the railways in July.

What will this mean for passengers, and how will it work?

The government has not guaranteed lower fares, but has promised a "best fare guarantee", to make sure people are always paying the lowest fare for their journey.

It has also promised its reforms would make buying cheaper tickets simpler.

However, railway specialist Tony Miles - who has covered the industry for more than 40 years - told the BBC when the plans were first announced that any savings were likely to be minimal.

He said this is because the private operators' profit margins are already so small, at just a few pence for each passenger journey.

He argued this would mean Labour would only be able to pass on very small savings per journey.

From just after the Second World War until the 1990s the UK rail system was fully nationalised, with the government owning the rail networks and all of the trains.

The industry was privatised in the 1990s, with services run by a variety of train operating companies.

At the moment, the infrastructure is managed by publicly-owned Network Rail, while passenger train services are run by individual operators, which are both privately and publicly-owned.

The situation is different in Scotland and Wales, where passenger services are run by the devolved governments. In Northern Ireland, the system is fully nationalised.

Labour is bringing in a new law to make nationalising passenger operators in England the default option, rather than the last resort for companies that have been struggling.

It will also establish Great British Railways (GBR) to run both the network tracks and trains. This will not happen for at least a year, but there are transition plans in place.

The publicly-owned body will oversee the rail system across England, Wales, and Scotland, and it will be created with a separate law.

Once up and running, it will take over the contracts currently held by private firms in England as they expire in the future.

However, GBR will not buy back "rolling stock" (an industry term for the train carriages) from private firms, but will continue to lease them.

Rail freight companies will not be nationalised, with the government instead saying that GBR will support and promote freight operators.

The government also plans to set up an independent watchdog, the Passenger Standards Authority, which would "champion improvement in service against a range of measures".

Whether this will make the trains run better "comes down to how they’re going to fund things" and whether it will allow major construction projects to move forward, says Mark Simmons, deputy editor at International Railway Journal.

If the new law gets through Parliament quickly, the first new nationalisations could be early next year.

The first operator contracts to be nationalised could be Greater Anglia and West Midlands, whose core terms - the equivalent to a break clause - are up on 15 September. For this to happen three months’ notice is required.

The next contracts to be taken over would be Chiltern and Govia Thameslink Railway, which operates Thameslink, Southern (and Gatwick Express) and Great Northern, in April 2025.

All railway operators' contracts or core terms will expire by October 2027.

Soon after the general election, Transport Secretary Louise Haigh met the managing director of Avanti West Coast and a representative of infrastructure manager Network Rail, to urge improvements.

Before the election, she had promised to look into removing Avanti’s contract before 2026.

However, company bosses are understood to be confident the terms of the contract have not been breached. That means any attempt to remove it could be met with legal action.

Another troubled privately-run operator, CrossCountry, is currently running a reduced timetable because of a backlog of driver training.

Ms Haigh said CrossCountry had warned it would breach its contractual targets for cancellations, and she had reluctantly accepted the temporary service cuts to give passengers more certainty.

Transpennine Express’ contract was stripped in May 2023 after it struggled to run a full timetable amid a shortage of available drivers.

Luxembourg operates a fully state-run system where all train journeys are free, and train tickets in other European countries with more state control than the UK can be much cheaper.

However, those networks also receive lots of government investment, which can mean higher taxes.

Mr Simmons said trains in the UK are "not as bad as people think".

"Sometimes the perception is that everywhere else is better, and that’s very much not true.”

However, he said other countries were “powering ahead” with long-term planning for major projects.

If Labour waits until the current franchise contracts run out and takes them on itself, as the previous government did during Covid, this would not necessarily cost the taxpayer anything.

However, doing so would also mean taking on the railway operators debts, leases, and liabilities, such as their pension fund pots and the lease contracts for the rolling stock.

Labour says its plans would save the taxpayer £2.2bn a year, but the government has not guaranteed that all this money would be reinvested in the railways.

UK private operators' contract expiry dates

UK private operators' 'core term' expiry dates*

*No 'core term' expiry date for South Western or Essex Thameside (c2c)

UK public operators

Source: Rail Partners, Department for Transport