When Labour swept to power last summer, one of the new Government’s first acts was to set in motion the renationalisation of the railways.
It was swiftly followed by a bumper “no strings attached” pay deal for train drivers that would end more than two years of bitter industrial action and misery for rail users.
The move was described as a reset in industrial relations. A new dawn.
But as the Government prepares to usher in its next set of sweeping reforms, the uneasy truce between ministers and the union bosses has already begun to shatter.
In the coming weeks, ministers will launch a consultation on its wider reform plan to bring track and trains all under the government-owned umbrella of Great British Railways (GBR). They hope it will mean a smoother running rail system.
But yesterday a series of Sunday walkouts by Avanti train managers started to cause more problems for passengers, and those working in the industry expect it to be a taste of much wider disruption to come.
They think the renationalisation – which will take place gradually as private train operator contracts end – could be about to set up another major stand-off between ministers and rail staff that will begin as soon as the Government is responsible for the employment terms and conditions of the many thousands more workers on the railways.
“Securing a single employer in the rail industry – that is the next big battle for the unions. Then they can harmonise working terms and conditions across the sector,” a senior rail industry source told The i Paper. “There’s a big fight coming.”
Fears of cherry-picked working conditions
To understand the potential scrap coming down the line, it is first important to understand how the sector works at the moment. Following the decision to privatise the railways in the early 1990s, the old British Rail was broken up, with services run by a long list of private rail operators running train services covering different parts of the country.
Over the last three decades different rail operators, have introduced different employee terms and conditions that have been negotiated with the unions over time.
Today, as one rail industry figure put it: “You have a patchwork of Ts&Cs all over the country. The current situation for terms and conditions is absolutely nuts. Not least because not only do you have different Ts&Cs for the various operators, but quite often they are different between different depots on the same line.”
The hodge-podge of different working rules, which can see some drivers being paid extra for the time it takes to walk from their staff room to the drivers’ cabin or limits on how many times in a day a train crew can do the same route, will all be transferred over to GBR once the last of the rail operators’ contracts lapses and it falls under government control.
Those running the railways now believe that the unions will want to cherry pick best the working conditions from across the sector and hand them out to all workers on the railways.
Another pay dispute possible
However, before thoughts are turned to the future working arrangements under a renationalised railway, unions will first come back to the negotiating table for more talks on pay.
While train drivers walked away with a 15 per cent boost to their salaries – something that even the new Transport Secretary Heidi Alexander admitted was responsible for drivers refusing to work overtime during Christmas, as they could afford not to – there will be talks on the forthcoming year’s pay settlement.
Alexander’s predecessor in the job Louise Haigh came under severe criticism last year when she signed off on the 15 per cent pay deal for drivers without asking for anything in return in regards to reforms to working conditions.
“The Government may have secured a threeyear pay deal with the unions, but that was for the last three years. Now they will have to discuss the normal pay round and given the politics around the last deal, it might well be that the Government would want something in return for any pay offer,” one rail source said.
A separate source described Haigh as “naive” for shaking on the deal, and said it raised questions as to whether the Government would need to try and make future pay rises conditional on unions allowing the changes to the way the rail system operates that it wants to see.
“That’s the backdrop that these reforms to bring everything into a single entity will be set against,” the source added.
Making Sunday a working day
Veterans in the rail industry believe many of the disparate working arrangements will be left alone. But there are some changes that are fundamental to getting rail services closer to where the Government thinks they should be.
Chief among these is how the working week is calculated and, in particular, whether Sunday is classed as a normal working day.
“One of the things that ultimately needs to be fixed is the idea that – in most cases – drivers don’t have Sunday as a working day, so they’re not rostered on Sundays, and that has to be done by overtime. I don’t think anybody thinks that’s a good idea,” a separate industry insider said.
“I’m not sure passengers think it’s a good idea, but it requires a proactive change to fix that, and that will cause one of two things: that will cause a dispute, or it will cause a settlement in advance of dispute, which ultimately is money.”
The fact that Sunday working is classed as overtime means services are dependent on staff choosing to work in return for overtime pay. However, when major events, such as England’s appearance at the Euro 2024 final, are more appealing than working overtime then services have to be cut and trains are delayed or cancelled.
There are also differences in the length of the working week, with some operators running to a five-day working week, while others run a four-day week.
“Ultimately it will be up to the DfT [Department for Transport] to put on the table what its solution is to this, but whatever changes there are, the unions are likely to want something in return,” the insider added.
Andrew Gilligan, the former Tory transport adviser to both Boris Johnson and Rishi Sunak in No 10, warned that through nationalisation “it’s much easier for the unions to kind of disrupt everything with a single employer”.
“There will definitely be a concerted union attempt to level up terms and conditions to the very best,” he told The i Paper. “I can’t see them agreeing to level anyone down. So that will almost certainly trigger quite a lot of industrial action.”
Power of the unions
The rail unions are largely acknowledged as being among the most effective in the country at getting their members the best possible deal from both the Government and their train operating companies.
Conservatives have long bemoaned the power of the unions thanks in large part to the unique hold they have over a crucial part of the economy. But when Tory ministers refused to give into their demands Labour pointed out was costing the economy around £20m a day.
The two main rail unions, Aslef and the RMT, have been led by Mick Whelan and the outgoing Mick Lynch respectively, both of whom are sharp communicators and capable of winning around public opinion.
Having worked their way to the top from the shop floor, both know the industry inside and out, handing them a distinct advantage over their opposite numbers in Whitehall, where ministers are regularly shuffled in and out. Despite only being in power for a little over six months, this Labour administration is already onto its second transport secretary, albeit for reasons outside the transport brief.
“The unions would love to see harmonisation across the sector, because if you have a single employer with set terms and conditions then it only goes one way,” the senior rail source said.
But the unions have pointed out that there has been an “energetic” lobbying operation by the train operating companies as “they have a lot to lose” from nationalisation.
The RMT issued a briefing note earlier this month highlighting the size of the “record” dividends being paid out by the private rail firms to their investors.
The RMT stated: “With their chronic mishandling of the railway resulting in cancellations and poor performance, and with the prospect of public ownership without compensation looming, it appears that the TOCs [train operating companies] are ratcheting up this already-parasitic value extraction, ramping up their dividend payments to sweat the railways for every possible penny before their contracts expire. Nationalisation can’t come soon enough.”
A new ‘smarter’ Transport Secretary
Perhaps the biggest proponent of rail nationalisation within the Labour Government was Haigh, who had successfully carried over one of the very few policies that survived the Jeremy Corbyn years.
But her ousting after a historic conviction emerged, saw her replaced by Heidi Alexander, whom the industry sees as less evangelical about the reform agenda.
While Haigh was branded as “naive” for her no-strings pay deal, Alexander was described as a “much smarter operator”.
“Heidi ran Transport for London and there is no way she will accept working terms and conditions [unifying and levelling up] under a single employer. She knows that would be madness,” the source added.
There are now expectations among some within the rail sector that the Government will try to water down some of the reforms to working arrangements that had been planned under GBR. That could in itself spark fresh stand-offs with the unions who will demand better working conditions under a newly nationalised rail sector.
“Ministers were told that with their nationalisation plans they were biting off a massive mouthful,” the senior rail industry figure said. “Bringing operators back under public control is only the start.”
A DfT spokesperson said: “We are delivering the biggest overhaul to our railways in a generation, creating a publicly owned, passenger-focused Great British Railways.
“As part of these plans, we’re determined to move towards a seven-day working week and end the overreliance on rest day working, giving passengers the certainty and reliability they deserve.
“The Government has prioritised resolving the rail union disputes, improving services for passengers, saving hundreds of millions in lost revenue, and easing the burden on taxpayers. There were 10 days lost to national-level strike action in the last four months of 2023, compared to none in the last four months of 2024.”
The RMT and Aslef were contacted for comment.
