Jeremy Corbyn vs Andy Burnham – Railway Renationalisation

Renationalisation of the UKs railways has been put firmly on the agenda in the run up to the 2015 election. The Green Party and Labour’s Ed Miliband both promised to bring privately run rail services into public control. Public support for renationalisation is reaching new heights, a YouGov poll shows; 79% of Labour, 73% UKIP, 64% Lib Dem and 52% of Conservative voters are for public ownership. Now in the run up to the next Labour leadership election both Andy Burnham and Jeremy Corbyn are pushing for railway renationalisation – but in very different ways.

rail support

Renationalisation makes economic sense for both the passengers and the treasury. The UK consumer pays upto 40% higher rates on average when compared to their publically owned European counterparts. Inflated ticket prices in the UK are affiliated to a number of chronic issues; firstly the high costs of contract bidding to operate lines & bidding administration are passed onto the consumers, secondly rail line operators take out costly leases on out-dated trains, and finally infrastructure projects are heavily subsidised by the tax payer with profits going to the operator. It’s clear the UK needs a drastic change into how our railways are owned and run if we’re to see change. But what would each candidate do, and how would they achieve it?

 

Andy Burnham

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Andy Burnham promises to end the “fragmentation” of our rail systems by bringing them back into public control “line by line” in his flagship policy. To do this a government lead by Burnham would create a publicly owned operator capable of challenging private sector bids for control. Without an immediate need to take back control the policy is readily affordable, simply waiting for contracts to expire, instead of having to buy current operators out. Further more Burnham is in favour of creating high speed rail links that would connect the west to the east, aswell as high speed rail connecting north to south. Unarguably the UK is in dire need of improved rail infrastrucutre, such a move will prove popular amongst businesses and create countless jobs in the process.

 

Jeremy Corbyn

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Jeremy Corbyn takes a different approach to renationalisation. A government run by Corbyn would introduce new legisatation to begin the process of brining the railways under public control. Whilst it’s not clear at what pace lines would be aquired, it’s going to require substantial capital to be achievable. Another key difference in Corbyn’s plans are to implement a long-term procurement strategy of rolling stock (trains) to reduce costs in the long run and allow for modernisation. Another costly process.

 

Under scrutiny

The key issue with Jeremy Corbyn’s renationalisation plans is funding, where will the money come from? To answer this question Corbyn and his team have set out a new economic vision for the UK which will provide the much needed capital. With the implementation of ‘quantitative easing for the people’ a Corbyn government would be free to generate new money for infrastructure investment to the point where inflation does not become inhibitory (current UK inflation 0.1%). To aid the development of infrastructure and housing Corbyn also proposes to create a publicly owned investment bank. Furthermore with the scrapping of Trident (£100 billion), axing Corporate welfare (£90 billion/year), increasing Corporation tax (2.5%) and the top rate of incoming tax to 50p, funding will become available for large-scale projects.

Unfortunately Burnham’s flagship policy has a critical flaw. Burnham and his team carried over Ed Miliband’s plans for renationalisation, which at the time was well placed to take over each line as they came for renewal. As it stands after 2020, most rail line contracts will not be up for renewal until 2030 and beyond, meaning Burnham’s low-cost sit and wait strategy is doomed to fail. Without a drastic change of policy Burnham would be left unable to fund a more aggressive renationalisation strategy.

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