Labour refuses to guarantee that rail fares won't go UP as critics warn renationalisation plan 'will cost billions of pounds and leave taxpayers at the mercy of unions demanding sky-high wages'

Labour today refused to guarantee that rail fares will not rise as it fleshed out renationalisation plans.

Shadow transport secretary Louise Haigh repeatedly dodged on whether costs could go up for travellers, merely saying there were no 'plans' for increases.

The overhaul would see the creation of Great British Railways with private train firms, such as Southern and Avanti West Coast, being brought back into public ownership. Labour claims there could be cost savings from the move. 

But industry bosses and Tories have warned that taxpayers would be liable for ballooning subsidies or face services being slashed to pay for the programme.

There are concerns that transferring the cost of leasing rolling stock from private to public balance sheets would cost up to £10billion over the next Parliament.

In a round of interviews this morning, Ms Haigh said she 'can't promise that we will lower fares'.

Pressed on whether she could guarantee they will not go up, Ms Haigh insisted that fares will be 'simpler'. 'We've got absolutely no plans to make them more expensive,' she said. 

Labour claims bringing rail back into public ownership will cost nothing because the firms would not receive compensation when their contracts end.

But the Opposition has been accused of pursuing the policy to please trade union paymasters.

The party is also under pressure to explain how it would pay for wider costs linked to the overhaul.

Labour's plans mirror the Government's, which would also see GBR created as an arms-length body to run the network.

But under the Government's model, drawn up by ex-Transport Secretary Grant Shapps and former British Airways boss Keith Williams, private companies would still run services under the GBR umbrella.

Labour cited the Shapps-Williams plan as proof that its own proposal would help save £1.5billion a year.

However, critics said that the majority of this came from workforce reforms, such as closing ticket offices, which Labour opposed.

Labour says it will also bring in automatic refunds for delayed and cancelled trains and roll out digital season tickets.

Ahead of a speech on this policy this morning, Ms Haigh told Sky News: 'We know the current model is broken. Anyone who has had to rely on the railways recently knows that very well.

'We have got record delays, record cancellations and routine overcrowding. That is because the system just isn't set up in a way that works for the passenger.

'So, for too long we have had this really fragmented model that means dozens of operators and interests work against each other rather than work in the interests of the passenger.'

Ms Haigh pointed to the example of delays, which she claimed led to 'armies of lawyers' arguing with each other 'about whose fault it is and who has to pay for the mistake rather than work out how to fix it'.

She added: 'That is why we want to sweep away that model and bring in a unified, simplified, publicly owned railways that can from top to bottom work in the interest of the passenger.'

Ms Haigh said: 'Whilst the Conservatives are content to let Britain's broken railways fail passengers, Labour will deliver root and branch reform.

'Passengers and taxpayers alike are being failed, and our economy is being held back. Doing nothing is simply not an option.

'Labour's detailed plans will get our railways back on track; driving up standards for passengers, bringing down costs for taxpayers, driving growth and getting Britain moving.'

However, touring broadcast studios for the government, defence minister James Cartlidge said: 'Privatisation led to a doubling of the number of people using our railways. It has been a significant success story, huge investment from the private sector.

'But as I said, if that investment hadn't come from the private sector it has to come from somewhere, and it would have to come ultimately from taxpayers.

'I think that is the key question for about this policy: How much is it going to cost taxpayers? At the moment it is unfunded.'

Andy Bagnall, boss of industry group Rail Partners, said: 'Over time, the increased costs to the taxpayer of nationalisation due to the loss of commercial focus from private train companies will lead to either reduced train services or increased subsidy.

'That means rail competing for funding with other public services like the NHS. Historically, British Rail (prior to privatisation in the 1990s) often lost this battle.

'Private train companies have a track record of re-growing the railway in the two decades prior to the pandemic, having doubled passenger numbers, increased the number of train services by a third and turning a large cost to the taxpayer into an operational surplus for the Treasury.

'Labour's proposals are also moving in the exact opposite direction to what we're seeing across Europe where other governments are seeking to copy the previous successes of the British model using competition amongst train companies to reduce subsidies for taxpayers and provide a better service for passengers.'

A Government source added: 'Labour's pointless pursuit of nationalisation won't improve things for passengers and does not address how the significant expansion of the state will be paid for.

'They can't say how their plan will be paid for, which means taxes will go up - taking us back to square one.'