Rail fares will continue to rise under Labour despite plans to bring the railways under public ownership, the new transport secretary has indicated.
Heidi Alexander, who was appointed to the position after Louise Haigh was forced to resign last week, said the “commercial realities for the railways are very challenging at the moment”.
She said there needs to be enough money to provide good services for fare payers, warning against entering into a “death spiral” of low fares and poor-quality rail networks.
It comes after the government announced that South Western Railway’s services will be the first to transfer into public ownership next year.
The government said the move paved the way for a “major shake-up” of Britain’s railways, improving reliability and supporting a boost to economic growth by encouraging more people to use the railway.
It will also clamp down on unacceptable levels of delays, cancellations, and waste seen under decades of failing franchise contracts, it was claimed.
But asked if rail fairs will be cheaper under public ownership, Ms Alexander told Sky News: “In the budget this year the chancellor set out that next year rail fares will increase by 4.6 per cent, that’s the lowest absolute increase for three years.
“The commercial realities for the railways are very challenging at the moment. Even under public ownership, we’ve got to make sure that we’ve got enough money to provide the services that people want, otherwise you can enter into a little bit of a death spiral.
“If you start cutting services, and people cant get to where they want to get to when they want to get there.
“They’ll look for other options, so we’ve actually got to find a way to provide an appropriate service level.
“But we’re going to have to become more efficient and were going to have to increase productivity, because that’s the way you deliver value for money.”
The Tories dismissed Labour’s plans to nationalise the railways as an “ideological undertaking that does not put passengers first”.
Shadow transport secretary Gareth Bacon said the party will “closely monitor the impact of these plans”.