The new transport secretary has admitted she has no idea how much Labour’s plan to renationalise the railways will cost.
Heidi Alexander was speaking as it was announced the government will bring three of the privatised train companies - South Western Railway, c2c and Greater Anglia - into public ownership next year.
On LBC this morning, Alexander - who took up her post last week following the resignation of Louise Haigh - was asked by presenter Nick Ferrari how much the scheme would cost.
She replied: “It will be a fraction of the cost, for example, to bring them over and also set up Great British Railways - a fraction of what we’re paying in terms of the management fees.
“At the moment, we pay roughly £150 million in management fees to the train operating companies and we’re clear that the money that is available to be spent on rail should be going into improving passenger services.”
Ferrari then said: “That didn’t answer the question though. How much is it going to cost?”
Alexander said: “I don’t have a specific figure for you Nick.”
The presenter asked her: “You don’t know how much this is going to cost, secretary of state?”
Alexander replied: “The set-up costs will be less than that £150m management figure that I was talking about.”
Ferrari hit back: “But you don’t have the actual cost to hand? Or you don’t know the cost? What is it?”
The minister said: “There’s a way in which we are saving money here as well. It’s a really complicate picture because we already subsidise the rail network in this country to the tune of almost £2 billion a year, and then you have the revenue that is generated by the fares.
“If you can increase ridership on the railways and revenue goes up, then all of that will play into the commercial realities of the operator that you take in-house to the [Department for Transport] operator.”
Ferrari said: “Secretary of state, how can you be sure it’s going to save money when you don’t know how much it’s going to cost?”
Alexander replied: “So ... I know that actually if we can provide a more unified and joined-up service through GB Rail ... well, we’ve got to do this properly because we’ve had 30 years of privatised train companies delivering failure. This is a one in a lifetime opportunity to get this right.”
The presenter then said: “It does sound strange that we’re going to save money by doing this, but we don’t know how much it’s going to cost. That sounds the strangest thing to hear.”
But the minister insisted that nationalising all of the private train companies would make procurement of things like rolling stock cheaper in the future.