LABOUR has unveiled plans to create a new publicly-owned company called Great British Railways to nationalise much of the sector.

The party has announced it will nationalise railway companies when their franchises expire.

This means the state will not need to pay operators compensation, Labour said.

But The National understands that devolved authorities will be able to choose to have services run by the private sector if they wish. 

It suggests Keir Starmer has won out over his shadow chancellor Rachel Reeves after she previously ruled out nationalising the railways.

The National: Rachel Reeves

Great British Railways will be “led by rail experts, not Whitehall” the party pledged, adding they expected the “transition to public ownership” within the first five years of a Labour government.

Because transport is devolved, the policy will primarily affect rail companies in England – but Labour said the policy would also cover cross-Border services like LNER and Avanti West Coast.

Great British Railways will allow devolved leaders, like regional mayors in England and devolved agencies like Transport Scotland to decide the contracting model they want to use.  

It should end any lingering uncertainty over the party’s rail policy – after Reeves caused confusion in 2022 by saying suggesting would not nationalise the railways.

READ MORE: Labour reiterate commitment to nationalisation of railways

In an interview with the BBC two years ago, Reeves said: “Within our fiscal rules, to be spending billions of pounds on nationalising things, that just doesn't stack up against our fiscal rules.”

At the time Labour clarified her remarks by saying they believed public ownership could have have a “positive” role in rail, The Independent reported.

But the latest announcement suggests any debate on the matter is now over.

Elsewhere in their major policy announcement, Labour said they would establish a new Passenger Standards Authority to hold the new public rail operator to account on behalf of passengers.

And they pledged to deliver a “best-price ticket guarantee” which would automatically give travellers the best prices for tickets, modelled on the system used by Transport for London, and for automatic delay and cancellation refunds.

Currently, passengers must apply for refunds if their trains are delayed significantly or cancelled.

Exempt from nationalisation plans will be open access operators such as Hull Trains and Lumo. They will be able to compete with nationalised firms where they can prove they add “value and capacity to the network”.

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Labour also said that their plans would give new powers to the Scottish Government and other devolved authorities to agree national and regional rail services with Great British Railways.

This, the party said, would give local authorities and devolved national governments the power to create integrated transport networks across the country.

That would tie in with a new SNP pledge, announced last week, to explore the creation of integrated ticketing for public transport across Scotland, allowing passengers to use the same ticket for buses and trains.  

The National: Shadow transport secretary Louise Haigh

Shadow transport secretary Louise Haigh (above) said: “With Labour’s bold reforms, a publicly owned railway will be single-mindedly focused on delivering for passengers and will be held to account on delivering reliable, safe, efficient, accessible, affordable and quality services.”

They have been met with opposition from the rail industry, with the sector’s lobbying firm Rail Partners saying the reforms would “increase costs over time”.

Nationalising the railways is one of the few of Starmer's leadership pledges still standing, having reversed his support for taking utility companies and other key services into public ownership. 

The Labour leader is still dogged by accusations of flip-flopping and the policy is the party's first major announcement since ditching its flagship plan to spend £28 billion on green infrastructure