Great British Railways (GBR) is a “solution looking for a problem” and could see the UK repeating the mistakes made under British Rail, a centre-right think tank has said.

In its manifesto, the Labour Party committed to the creation of GBR as a way of tackling ongoing issues such as high prices and poor punctuality facing many of the services run by private operators. The effective renationalisation of the UK’s rail system is planned to happen gradually as existing private contracts elapse.

As well as running most passenger train services, the new body will take responsibility for setting timetables and fares, network maintenance and managing access to the railway while reporting to the transport secretary.

The Centre for Policy Studies (CPS), which has long been championed by the Conservative Party, said that GBR needed to avoid the pitfalls that British Rail encountered in the 1980s. It said the new body would need longer-term budgets to carry out ongoing infrastructure upgrades but expressed concern that these would be unlikely to endure, with the Treasury favouring annual settlements instead.

Private train firms were awarded contracts in one of two ways – either they were appointed by the government directly to run services, or given ‘open access’ arrangements, such as those used by Hull Trains and Grand Central, which compete with franchised train companies and generate their revenue through ticket sales alone.

The CPS said that GBR has the potential to be “catastrophic for open access rail”. It said some of the open access arrangements have delivered highly popular and affordable high-speed services, but the government is pushing the regulator not to approve any new services under this regime.

Since the privatisation of British Rail under the John Major government in the mid-1990s, average rail fares have risen by roughly 50-70% in real terms according to data from the Office of Rail and Road. Meanwhile, even in British Rail’s final years (1991-94), the punctuality of trains was over 90%, which is comparable or better than most of the year’s performance recorded under privatisation.

Passenger rail journeys almost doubled (95.9% increase) in the 20 years before the pandemic, reaching a record 1.8 billion journeys in 2018. Yet while passenger numbers are almost back to pre-pandemic levels, revenue is only at 89.1%, due to a fall in first-class, business-class, full-fare and London and South East season tickets.

“It is hard to avoid the conclusion that GBR is a solution looking for a problem – prioritising the nationalisation of the railways over their efficient and effective operation,” the CPS.

“In particular, ministers have failed to set out their longer-term vision for the railways in the Britain of the 2030s and beyond. What are the economic goods they can deliver? What is their role in terms of social mobility, clean travel, industrial strategy, boosting inward investment, housing and regional growth? How can innovators and private sector investors be rewarded for taking investment risk? Or is the door now being closed to them?

“If GBR is to be genuinely customer-focused, then it must prioritise passenger needs. Only then will revenue recover.”