(Bloomberg) -- The UK’s Labour government will nationalize three train services currently run by the private sector, the start of a plan to take the industry back into public hands.
South Western Railways, which provides one of the biggest commuter services into London, will be the first franchise returned to state control when its contract ends in May.
The government is reversing the privatization started in the mid-1990s. Public satisfaction with the train network is low, due to frequent delays and cancellations, and complex ticket pricing.
South Western Railways is currently operated by a joint venture between FirstGroup Plc, a transport business with operations in the UK and North America, and MTR Corporation Ltd., the Hong Kong transit operator.
Two other lines that run services directly into the City of London — c2c and Greater Anglia — will follow later in the year.
The government said Wednesday that the move follows the passing of its first major piece of legislation since Labour swept to power in July’s general election. The bill to enable nationalization of the railways was pushed through Parliament by former Transport Secretary Louise Haigh, becoming law the day she resigned over a historical fraud conviction.
“At the moment, we’ve got this dizzying array of private sector companies, public bodies, industry groups, bits of government: it’s really complex,” Heidi Alexander, the new Transport Secretary, told Times Radio on Wednesday.
‘Unacceptable’ Delays
After contracts held by private companies end, train services will be controlled by a government unit called DfT Operator Limited, previously known as the Operator of Last Resort. In time it will fall under Great British Railways, a state body planned by the previous Conservative administration.
Alexander said the reforms would put “the people that operate the track and the infrastructure within the same organization as the people who are running the train services.”
Rail nationalization is popular with the British public. Surveys by polling company YouGov show more than two thirds of people support the policy, while fewer than one in eight oppose it.
The government said nationalization will “clamp down on unacceptable levels of delays, cancellations and waste seen under decades of failing franchise contracts” while saving as much as £150 million in fees.
Still, supporters of the franchise system point to a sharp increase in passenger journeys, which have more than doubled since the Conservatives privatized train services.
Some lines had already come under the Operator of Last Resort’s control in recent years following the Covid pandemic, when the Conservative party was still in power.
--With assistance from Alex Morales.
(Adds context and minister’s comments from fifth paragraph.)
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