Labour leader Ed Miliband is set to announce plans for part re-nationalisation of British railways in a radical overhaul of the transport network, if his party wins the next general election.
The plans will allow public sector or not-for-profit firms to bid against private operators such as Stagecoach and Virgin Trains to run railway lines. Miliband will reject calls from unions for a full re-nationalisation of the railways.
Labour claims a new rail authority would improve punctuality, lower fares and cut costs to taxpayers.
Proposals for one of the biggest changes to national rail since privatisation in the 1990s will be unveiled at Labour’s “national policy forum” in Milton Keynes this weekend (July 19/20).
According to a Labour spokesman, the plans are driven by a desire to move away from the “ideological obsession” surrounding private sector companies running the UK’s railways.
However, transport secretary Patrick McLoughlin has told TheTelegraph that re-nationalising the railways would increase government debt and lead to a worse service for passengers.
"I hear Labour wants the state to bid for routes. They think it would buy off the unions just enough without frightening business too much,” said McLoughlin.
"This is a policy made for all the wrong reasons, the plan is a fast track to chaos. It won’t work, it will lead to more government borrowing and worse services for passengers."