The capitalist hole in Labour’s rail nationalisation plans is huge

Keir Starmer’s Labour has expanded on plans to nationalise the railway operating companies under a new Great British Railways.

But the party will not nationalise the rolling stock companies – Eversholt, Porterbrook, and Angel Trains. These companies own the majority of the trains that we rent.

That’s despite the company shareholders making over £2bn in the past decade in dividends.

So basically, Conservative prime minister John Major sold off the trains when he privatised the railways in 1993. Now we rent them back at higher costs and still will under Labour’s plans.

Rail nationalisation: Labour is promoting a scam

It’s a scam and Labour should simply take them back, citing previous profits.

The chief executives of the rolling stock companies were paid around £1m each in 2022. Surely they’ll survive.

Privatisation of public infrastructure and institutions everyone needs to use, such as healthcare, electricity, and the internet, is always a con because we end up renting the services back.

Instead we should own them and pay cost-price.

Indeed, Labour projects its rail nationalisation plans could save us up to £2.2bn per year partly from removing shareholder dividends. So why stop there?

Well, Starmer has gone back on nearly all of his pledges he made to become Labour leader.

In a signed document, Starmer claimed that “public services should be in public hands, not making profits for shareholders. Support common ownership of rail, mail, energy and water.”

But after securing votes from Labour members, he abandoned nationalisation of energy, mail, and water.

Never trust a Tory

With such a record, it’s unclear we can even trust Labour on their rail nationalisation. It says it will deliver this in the first five years of government at no cost once the contracts expire.

The UK’s privatised system has the highest fares in Europe by far for a single ticket. And when taken as a proportion of UK wages, our season ticket fares are now up to 7.5 times higher than other European countries.

A report from union RMT shows privatisation costs £1.5bn per year including profits extracted from rolling stock companies. Saving these profits could fund the cutting of fares by 18%.

Labour’s rail nationalisation is a welcome, if limited, policy. But it’s unclear whether we can even trust them to do that.

Featured image StarlifeStudios Rail Videos – YouTube and the Canary