Labour would let public and private sectors to compete for rail franchises

Shadow Chancellor, Ed Balls, says the party did not 'want to go back to the nationalisation of the 70s'

A string of franchises are due to expire after next year’s general election, including Southern, London Midland, Wales and Borders (Getty Images)

The Government would compete with private companies for rail franchises under plans drawn up by Labour that stop short of a full-scale programme of renationalisation, according to a report.

A string of franchises are due to expire after next year’s general election, including Southern, London Midland, Wales and Borders, TransPennine Express, East Midlands and CrossCountry.

Private firms that run successful services would be permitted to bid again under the proposals, The Guardian reported, adding that an announcement was expected to be made next week.

A Labour spokesperson said the report was “pure speculation”, saying: “We will set our policy at the appropriate time.”

Unions have been calling for the renationalisation of Britain’s train companies following the success of East Coast Trains, which was taken over by the state after National Express lost the franchise.

Ed Balls, the shadow Chancellor, has spoken in favour of the “franchising process”, saying more people were travelling on trains and there had been greater investment.

“I think it's a good thing for us to say in the bidding process we're happy for private and East Coast to bid into that process on a level playing field. I'm not going to take an ideological approach. I don't want to go back to the nationalisation of the 70s,” he said.

“I think many people would say that some of these franchises have operated in a pretty unfair way to consumers and in the East Coast it failed. So let's get to a level playing field, not be ideological.”