Before and after the election

Whatever your political views, it is undeniable that the new Labour government has a different approach to its predecessor. Here, we consider what this might mean for the nation’s railways, which were not a key factor in the election campaign.

The transport promises

A cash-strapped new government has far greater priorities including health, education, defence, and economic growth. Yet rail is a driver of economic growth as well as being a key part of the drive for net zero carbon transport.

The election manifestos provide an insight into the transport priorities of the different parties, and by implication, their supporters. The two main parties did not have transport sections in their manifestos and instead considered transport as part of their plans to grow the economy.

Labour

The Labour manifesto promised mission-driven government offering economic stability and kickstarting economic growth. Part of this is the creation of a £7.3 billion National Wealth Fund to support growth and clean energy. There is also to be an industrial strategy council and a 10-year infrastructure strategy which includes improving rail connectivity across the north of England. There were, however, no specific sums committed to rail investment.

As contracts expire, train operations are to be brought into public ownership, yet it is recognised that open access operators will continue to have an important role. There were also commitments to promote rail freight and create Great British Railways (GBR) which will be responsible for investment and operational delivery.

Labour’s manifesto recognised that cars are by far most popular form of transport and so committed to maintaining and renewing road networks. It also stated that local leaders will have power to franchise local bus services and mayors will have powers to create integrated transport systems.

Conservatives

The Conservative manifesto essentially restated the Network North document which committed to invest the claimed £36 billion from HS2 savings on rail, buses and local roads, including £8.3 billion to fill potholes. This included upgrading the line between Newark and Nottingham as this was somehow going to halve journey times between Nottingham and Leeds. There was also an additional commitment to invest £12 billion for Northern Powerhouse Rail and to reopen Beeching lines.

The manifesto recognised the need for rail reform with the creation of GBR which is to be tasked with growing the private sector to deliver a modern innovative railway with reliable services and simpler tickets.

Beyond rail, it committed to £1 billion to support hundreds of new bus routes and £4.5 billion to secure strategic manufacturing sectors. It stressed that the Conservatives were on the side of drivers, with pledges to stop road pricing and put constraints on low emission zones and 20mph traffic zones.

Liberal Democrats

The Liberal Democrat’s manifesto aimed to make rail a genuinely convenient, affordable, and environmentally friendly option for both passengers and freight by establishing a new Railway Agency – a public body which would help to join up the industry to put customers first, holding train companies to account, and reforming of the broken fare system.

It also required a review of the cancellation of HS2’s Manchester leg to see if it can still be delivered in a way that provides value for money, the delivery of Northern Powerhouse Rail, a 10-year rail electrification plan, and the need to work with local authorities to deliver light rail schemes. There was also a proposal to introduce a national freight strategy to move as much freight as possible from road to rail.

Modal shift from air to rail was also to be achieved by banning short domestic flights where a direct rail option taking less than 2.5 hours is available and requiring airlines to show comparative air / rail carbon emissions when domestic flights are booked. The Liberal Democrats also supported maintaining the £2 cap on bus fares and wished to encourage alternatives to rural buses where they are not viable, such as on-demand services.

Green Party

The Green party has an ‘Investing in Fairer, Greener Transport’ section in its manifesto. This does not mention rail reform and advises that elected Green MPs will push for a modern, efficient, publicly-owned railway, with affordable fares with the required investment which should include £30 billion for rail electrification. They also require a national strategic approach to identifying lines and stations which could be re-opened.

The Greens are the only party that require a significant reduction in car use given the huge and growing contribution that private-vehicle transport makes to our carbon emissions. In respect of buses, they would push for local authority control and proper funding for bus services, to increase services in urban areas, and provide a bus service to every village.

Reform Party

Reform also fails to mention rail reform in its manifesto. This, however, is the only similarity with the Green manifesto as Reform would scrap all net-zero targets as these are “pushing up bills, damaging British industries like steel, and making us less secure.”
The party pledged that in its first 100 days it would save £25 billion by scrapping HS2 which it considers to be a “bloated vanity project”. During this time, it would also stop the war on drivers and accelerate transport infrastructure investment by focusing on our coastal regions, Wales, the North, and the Midlands to improve existing rail and road links.

After the election

When Kier Starmer announced his cabinet on 5 July, the day after the election, it was no surprise that the previous shadow transport secretary, Louise Haigh, had been appointed Secretary of State for Transport. However, the appointment of crossbench peer and distinguished transport professional Lord Peter Hendy as Rail Minister on the 8 July was a surprise. Former Shadow Transport Secretary Lilian Greenwood, now Minister for the Future of Roads, commented on X that “appointments don’t get better than this.” Others in the industry expressed similar comments.

In 2021, Lord Hendy led the Union Connectivity Review which highlighted the importance of the railway in delivering the economic growth needed across the nations and regions of the UK. It also recommended that WCML rail capacity between London, the Midlands, North West England, and Scotland should be increased.

8 July was also the day that Haigh addressed Department for Transport (DfT) staff to set out her five strategic priorities which she said put transport at the heart of mission-driven government. She also considered that the DfT’s motto must now be “move fast and fix things”. Her priorities were:

• Improving performance on the railways and driving forward rail reform.
• Improving bus services and growing usage across the country.
• Transforming infrastructure to work for the whole country, promoting social mobility and tackling regional inequality.
• Delivering greener transport.
• Better integrating transport networks.

Some of these priorities were reinforced in the Kings speech on 17 July. This announced that a Better Buses Bill will be presented to Parliament. It also advised that there will be legislation to improve the railways by reforming rail franchising, establishing GBR, and bringing train operators into public ownership.

The overall context for transport policy was the statement in the speech that securing economic growth will be a fundamental mission for which the Government will seek a new partnership with both business and a newly created Industrial Strategy Council. An example of this is Haigh’s visit on 24 July to Hitachi’s Newton Aycliffe plant which is soon to run out of orders. The purpose of her visit was to consider a sustainable future for the plant. In a letter to local MPs Lord Hendy advised that the government was working on a long-term strategy in a bid to “end the current boom-and-bust cycle” in train production.

In a speech immediately after the election, Chancellor Rachel Reeves advised that she wants the Treasury to be about more than tax and spend as it has also to be a “growth department”. Though she considers that the government has inherited the worst set of financial circumstances since the World War II, she has stated that, although day-to-day expenditure must be paid for from tax receipts, the government would be prepared to borrow to invest.

Priorities for rail

The new government’s immediate priority for rail is improving performance which includes ending industrial action. Then, there is rail reform and the implementation of the policy to end private rail franchises as they become due for renewal. Finally, there is the need to consider future investment, be it infrastructure enhancements, electrification, HS2-related, and rolling stock.

Haigh has summoned poor performing train operators and associated Network Rail route directors to meetings at which she demanded action to improve performance otherwise contracts will be terminated. This included Avanti which last year cancelled 7% of its trains. Meetings were also held with trade union leaders within seven days of the election. ASLEF’s Mick Whelan considered this to be a “a major step forward and that the whole tone has changed”. He noted that he last met a government minister in January 2023.

The Passenger Railway Services (Public Ownership) Bill received its first reading in the House of Commons on 18 July. This Bill amends the 1993 Railways Act to specify that public-sector operators must provide train services except when it is not reasonably practicable to do so. Currently, the 1993 Act presumes that services will only be provided by private-sector operators unless it is not feasible.

In their “Getting Britain Moving” plan to fix Britain’s Railways, published in April, the Labour Party specified that GBR will be an arm’s length body and ‘directing mind’ of empowered rail industry experts and professionals, tasked by the Secretary of State who will set strategic direction. GBR will be responsible for planning timetables, improving services, and the operation, maintenance, and improvement of rail infrastructure. It will also bring finances together into a single body, enabling it to take long-term decisions to increase patronage and deliver improvements for passengers and freight. Legislation to implement GBR is expected soon.

Although there is a pressing need for rail investment, the Labour Party has not specified any sum for this. Finances are constrained, however the Chancellor accepts that worthwhile investments can be funded by borrowing. She also has recently announced a review to unlock the investment potential of pension schemes. It would thus seem likely that funding will be available for schemes with a good rate of return. Moreover, Lord Hendy’s work on a long-term rolling stock strategy indicates that the new government will be taking an informed view about the future rail investment.

As highlighted by the National Audit Office’s (NAO) recent report ‘HS2: update following the cancellation of phase 2’, decisions are needed on how to maximise the benefits of what is left of HS2 and how to best resolve West Coast Main Line capacity north of Birmingham. As mentioned in our ‘Pendolino plan for HS2’ feature, these issues could be resolved by constructing a ‘New Northern Line’ along the route of HS2 phase 2a at a lower cost than HS2. The NAO report also showed that none of the land purchased for the building of HS2 phase 2a has been sold.

The new government’s approach to rail generally seems to mirror that required by the industry. For example, the Railway Industry Association’s rail manifesto calls for a long-term strategy, rail reform, and supporting the supply chain. However, Rail Partners, which represents private sector operators considers that “full nationalisation is a political not a practical solution which will increase costs over time.”

In the few weeks since the election, the new Labour transport team has certainly not been idle. Although it is too soon to judge how effective it will be, it has the required expertise, a strategy, and an understanding that rail has a vital part to play in the Government’s declared mission of growing the economy.

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