Labor could cancel train contracts early if elected

Britain’s private train companies could start handing back control of their networks as early as July 5 if Labor wins the general election.

Boris Johnson’s vision of a new Great British Railways to replace the privatized franchise system has been halted by the dissolution of Parliament following the snap election. The railway reform bill, which was under committee review, has been scrapped.

Should the Labor Party emerge victorious and implement the proposed rail reforms, the future of private sector involvement in the national network could be uncertain. According to industry publication Railnews, “It is now beyond doubt that current National Rail passenger contracts in England will be terminated at the first available ‘breakpoint’ and earlier if an operator ‘fails to deliver’.”

There are indications that private train operators could consider handing their contracts back to the Department for Transport earlier than planned, pre-empting Labour’s policy. This step could avoid uncertainty and align with the transition to a new integrated railway body. In recent years, failed operations have led to several train networks, including LNER, Southeastern, TransPennine and Northern, returning under government control under OLR Holdings, the operator of last resort.

Labor has promised to create a new integrated rail body to oversee the sector. This body, seen as a more directive institution compared to the conservative ‘guiding spirit’, would manage the train networks directly rather than through concessions to the private sector.

Instead of immediate wholesale renationalisation, Labor could take control of the old franchises when their current contracts expire. However, given the potential lack of a long-term role in the new system, train companies could choose to end their contracts early and return control to the government.

In an interesting development, Huw Merriman, the Conservative Rail Minister, could play a role in Labour’s reformed railways. Merriman, a respected former chairman of the transport committee, has resigned as a Tory MP, sparking speculation about his possible senior position in the new integrated rail organization under a Labor government.