Drill into rail’s latest passenger and financial figures and there is a silver lining for those who believe nationalising trains might deliver more reliability, lower subsidies and fares.
But there is a huge caveat: success will depend on ministers choosing to copy an operating model that has proved to be hugely successful on Britain’s East Coast intercity route for a quarter of a century. This is where three privately owned non-subsidised train companies, known as open access, compete aggressively with the state-run operator.
The chancellor Rachel Reeves and the new transport secretary Heidi Alexander (the fifth one in as many years) must take note of this model if they want to avoid a future of soaring subsidies and flatlining passenger numbers. It should be encouraged and rolled out across Britain’s intercity network.
Next year ministers will create the state-run
Great British Railways (GBR) and say they want to see open access competition continue “where it adds value”. The new evidence shows that it doesn’t just do this on a significant scale, it also delivers a critical competitive discipline that can help prevent any risk of GBR sliding into financial and sector decline.
The Office of Rail and Road (ORR) statistics show that where intercity trains don’t compete for passengers they are expensive, require big subsidies, have struggled to get their finances and passengers back since Covid and endure poor passenger satisfaction.
Overall, rail income and journeys are down. The sector has not recovered to pre-Covid levels, with one important exception — the East Coast Main Line where real on-track competition delivers for customers. The line’s state-run main operator, LNER, is the only intercity service that has been able to increase its number of passenger journeys.
LNER had 21.2 million passengers in 2019-20 and 24.2 million in 2023-24. On the rival West Coast Main Line, the monopoly operator, Avanti, is still struggling to get passengers back. In 2019-20 it carried 37.5 million but in 2023-24 only 32.8 million. On the Great Western Main Line numbers were 82.6 million in 2023-24, down from 97 million in 2019-20.
LNER is also eating into the subsidy it requires from government. In 2021-22 it needed £288 million from the taxpayer but last year this fell to £39 million. LNER will soon come under GBR and if its growth continues, alongside its competitors, then it can become subsidy free.
This model gives ministers a huge opportunity to get GBR right. Let’s hope they take it.