http://www.guardian.co.uk/uk/2012/jun/30/labour-railway-network-state-control

Labour backs plans to return railway network to public control

Sweeping reform would begin with renationalisation of key routes and
end franchising of services

Plans to bring the national rail network back under public ownership
in order to halt big fare increases and prevent private companies
siphoning off huge profits will be considered by Labour as part of its
policy review, the Observer can reveal.

An independent thinktank report out on Monday, which puts forward a
detailed plan for effective renationalisation, was warmly welcomed by
the party's transport spokeswoman, Maria Eagle, who said the study was
timely and put forward a "coherent case for reform".

The changes would amount to the biggest overhaul of the train system
since British Rail was broken up in the mid-1990s and be seen as a
deliberate pitch by Ed Miliband's party for millions of "commuter
votes" in key marginal seats ahead of the next election.

If adopted by Labour it would mean ending franchises as they come up
for renewal on the east coast, west coast and midland mainlines –
ousting the likes of Sir Richard Branson from one of the country's
most profitable routes – and bringing the running of trains and
infrastructure under one publicly owned and accountable company.

Entitled Rebuilding Rail, the report by Transport for Quality of Life
argues that rail operations and infrastructure should be reintegrated,
franchising phased out and a democratic role given to passengers, the
workforce and elected local and regional authorities.

It says that the current fragmented system – under which the publicly
owned Network Rail runs the infrastructure and private companies
compete for franchise contracts to run trains – is failing taxpayers
and passengers while benefiting private train operators and their
shareholders, who are guaranteed taxpayer funds if profits fall below
a certain level.

The authors estimate that £1.2bn of public money has been lost each
year as a direct result of privatisation and fragmentation, money that
could have allowed fares to be 18% lower than at present. UK rail
passengers, who already pay the highest fares in Europe, face further
increases of at least 6% from next January.

Making it clear that Labour agreed with many ideas in the report,
which was funded by the main rail unions, Eagle said: "Under the
current system we have unaccountable train companies given a licence
to print money to operate a monopoly service at high cost to
passengers in an industry that still relies on £4bn from taxpayers
every year.

"Increasingly franchises are run by subsidiaries of the German, French
and Dutch state railways with profits helping deliver ticket prices in
those countries that are a third of ours. Labour's policy review is
therefore looking at all options to make our railways work better for
passengers with nothing ruled out, including whether the
not-for-dividend model that works for rail infrastructure should be
extended to rail services."

END QUOTE

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