Shadow transport secretary says Labour will ‘bin’ rail franchising system and calls Stagecoach executives ‘boneheads’ for stance on bus regulation



The Labour Party has indicated that it would begin the process of reforming bus and rail industry legislation to provide options for greater public sector control immediately “on Day 1” if elected to power in May’s general election.

The comments came in the wake of an interview with shadow transport secretary Michael Dugher which contained Labour’s hardest rhetoric yet on the perceived failings of the current system. “I’m adamant about putting the whole franchising system, as it stands today, in the bin,” he told the New Statesman, and he confirmed that under Labour a “public sector [operator] will be running sections of our rail network as soon as we can do that”. He also accused Network Rail and train operators of presiding over “a stitch up” of the way the railway is run through the “ironically-named Rail Delivery Group”.

Turning to the bus industry, he described Stagecoach executives as “boneheads” for their strong stance against Labour’s policy for local authorities to have greater powers to regulate bus services.

His comments were interpreted by political analysts as a hardening of Labour’s position. However a spokesman for Dugher told Passenger Transport that, although strongly worded, the shadow transport secretary’s comments are consistent with existing policy.

Clarifying Labour’s position, he said that a Labour government would draw up primary legislation to scrap restrictions on UK public sector operators competing for rail franchises and that a major review of the franchising system would begin immediately after the election.

But he denied that the franchising review would be designed to create conditions which would benefit Labour’s public sector bidder.

“Day 1 we will be looking at all options around the way [rail] services can be delivered,” he said. [But] it’s not that we are doing franchise reform to do something on our public sector operator. They are two separate things. It’s not one leading the other.”

He added that while Labour is committed to legislating so that public sector operators can “take on and compete” against private sector bidders for rail franchises, the party will also consider allowing franchise contracts to run out so that it can then transfer operation directly to the public sector rather than running a tendering process. “You’re right, there are options in and around that in the mix,” |he said.

Labour’s plans to extend bus franchising from London to other areas of the country involve providing city and county councils with a simpler means to regulate services, should they choose to do so, than under current Quality Contract provisions.

“Quality Contracts take up 40 pages of the Local Transport Act 2008 – it’s a fairly substantive piece of legislation for what could be a relatively straightforward mechanism within the bus market,” Dugher’s spokesman said. “So we will be looking at that again…We will be looking to legislate after the election to rebalance the market and bring in that London-style power for city and county regions where they want it.”


This article appears inside the latest issue of Passenger Transport.

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