LARGE PARTS of the rail network could be taken back into public ownership if Labour wins the general election, Ed Miliband has announced.
The Labour leader said the party would let the public sector challenge private operators to take on the running of rail franchises, arguing it would improve the service for passengers and end the situation where foreign state-owned foreign companies could compete to run trains in the UK without competition from a British equivalent.
The move was announced as Mr Miliband attempted to distance himself from the New Labour era of Tony Blair and Gordon Brown, promising the party would tackle inequality while taking a responsible approach to the nation’s finances in a time of continuing pressure on public spending.
Sources said an agreement on the rail policy was “pretty much a done deal” at the party’s National Policy Forum (NPF) in Milton Keynes, which is thrashing out the details of plans which could find their way into the party’s manifesto next year.
The package has faced resistance from grassroots activists and trade unionists who have been pressing for a return to full re-nationalisation.
In a keynote speech to the NPF, Mr Miliband said the decision to privatise the rail network was based on “dogma” rather than for the benefit of passengers.
He said: “Too often, we know the experience, it put the profits into the private sector and put the risk onto the government.
“We know East Coast has worked in public hands, so on the basis of value for money let’s extend that idea and let the public sector challenge to take on new lines.
“Let’s end the situation where you can be a European public rail company and run lines, but not if you are a public operator from Britain.
“Let’s together set a new course for our railways which will be better for the taxpayer and properly serve passengers.”
The measures are expected to include legislation to create a new overarching body - accountable to Parliament - which would deliver a national strategy for the railways.
It would bring together the track operator, Network Rail, and a new passenger rail body, to co-ordinate passenger operations, manage infrastructure and oversee stations and ticketing.
The scheme is intended to end what Labour says has been the fragmentation of the rail system under privatisation while delivering cost savings and a better deal for the passenger.
Mr Miliband set out his plan for a “new settlement” with the British people, with measures aimed at tackling inequality but accepting that Labour could not return to being a party of “big spending”.
It was, he claimed, a “programme which has at its heart our commitment to build a wholly new economy, fit for the 21st century”.
“It is a plan for economic transformation, a new settlement that is not less ambitious because we live in a time of scarcity, but is more radical, more ambitious because it sets a new direction for Britain.”
It was “moving on from New Labour” but “not going back to old Labour”.
He said the party was “moving on from a belief that rising inequality is just a fact of live” or that “there is nothing we can do about markets that aren’t fair”.
He insisted the new settlement involved “not seeing big spending as the answer” as he confirmed Labour would implement a binding commitment to balancing the books.
The Tories, he claimed, wanted a “race to the bottom”, with British workers facing “low wages, zero hours, bad terms and conditions”.
But he acknowledged that while the problems facing low earners had got worse under the Tories, they had started before David Cameron entered No 10.
He said: “They won’t simply be fixed by the recovery and the answer cannot be our traditional answer either, of spending to fix the problem
“You know and I know we won’t have the money.”
He added: “For all of the cuts, all of the pain under this government, Britain still has a deficit to deal with and a debt to pay down.
“That’s why our programme starts with a binding commitment to balancing the books in the next government.
“We will get the national debt falling as soon as possible in the next parliament. And we will deliver a surplus on the current budget.”
He said Labour had not done enough in Government to “tackle inequality or eliminate the problem of low pay or build an economy fit for the next generation”.
A living wage, paid at a higher rate than the national minimum wage, would be “at the heart of our programme” for 2015, with tax breaks on offer for employers that pay it.
Committees setting senior salaries in firms would have to include a more junior member of staff so that top executives would have to “look an ordinary worker in the eye” to justify high pay levels.
And measures would stop the “abuse” of zero hours contracts, he added.
Policy review chief Jon Cruddas, who has made a series of criticisms about the direction of the party, was praised by Mr Miliband.
Mr Cruddas has criticised the leadership for shelving bold reforms in favour of ‘’cynical nuggets of policy’’ designed to appeal to the press and focus groups, and warned that the top of the party wields a ‘’profound dead hand at the centre’’ that blocks plans.
But Mr Miliband said Mr Cruddas had done “incredible work” and produced “inspiring conclusions for our policy review”.
The meeting in Milton Keynes, which continues tomorrow, is largely taking place behind closed doors.
A senior source said the party leadership was confident of seeing off an attempt by dozens of Constituency Labour Parties to commit Mr Miliband to scrapping Trident.
The forum will produce a policy paper to be considered at Labour’s annual conference in Manchester in September and then feed into the process of drawing up the manifesto for the May 7 poll.
Looking ahead to next year, Mr Miliband said: “At this election, the public will have the chance to vote for a changed Labour Party with a programme to change the country.”
That included “a higher minimum wage; stopping the abuse of zero-hours contracts; skills and careers for all our young people; banks working for businesses again; energy bills frozen; 200,000 homes built a year by 2020; power devolved; the Bedroom Tax abolished; and our National Health Service restored”.