Britain’s railways are bleeding £1.4 billion annually despite passenger numbers returning to near pre-pandemic levels, with the Government’s radical overhaul to create Great British Railways risking catastrophic failure without urgent course correction, according to new research from the Centre for Policy Studies.
The research by Tony Lodge sets out a four-point plan to save Britain’s rail transformation as ministers prepare the biggest structural changes since privatisation in the 1990s. With GBR set to control passenger services, fares, and network access while stripping the independent regulator of key powers, the new system threatens to repeat the mistakes of nationalised British Rail.
‘Rail’s Last Chance’ reveals how the proposed structure will hand a state monopoly control over its own regulation – a conflict of interest that exists nowhere else in Britain’s regulated sectors. The dominant operator will decide who can run competing services, potentially killing off the open access competition that has delivered the rail sector’s greatest success story.
The analysis shows that where competition exists on the East Coast Main Line, operators have achieved 27.8% passenger growth, 94% satisfaction ratings, and slashed government subsidy from £288 million to just £39 million. An off-peak ticket to Doncaster costs £40 where competition thrives, compared to £62 for monopoly destinations like Cardiff or Manchester.
The research exposes staggering commercial failures that GBR must address. Network Rail’s retail income has collapsed 21% since 2019, while the railway’s 52,000-hectare estate could generate enough solar power for 180,000 homes. Japan’s railways earn a third of their income from such opportunities, yet Britain leaves billions on the table.
The four-point rescue plan demands that GBR embraces competition rather than crushing it, maintains independent regulation, delivers world-class digital retail through competitive tender, and exploits the railway’s vast commercial potential. Without this approach, passengers face higher fares and declining services while taxpayers shoulder spiralling subsidies for a sector that could be financially sustainable.
CPS - Sunday, 27th July, 2025
Tony Lodge is a Research Fellow at the Centre for Policy Studies. He has written and commented widely on rail policy and is author of several CPS papers. He delivered the Institute of Directors Beesley Lecture on ‘Promoting railway competition’ and has appeared before the Commons Transport Select Committee and the Competition and Markets Authority.
