(London) Labour leader Ed Miliband refused to rule out bringing the railways back into public ownership, saying the party was “looking at all the options”.
He has come under pressure from former deputy prime minister Lord Prescott and more than 30 would-be Labour MPs to commit to renationalising the industry.
Mr Miliband said Labour would not return to the old days of British Rail but the current system was flawed.
He has been urged to consider the success of East Coast since it was taken back into public ownership, with Lord Prescott suggesting the existing franchise deals should simply be allowed to lapse.
The Labour leader told BBC1’s Andrew Marr Show: ” We are looking at all the options on the railways. We are not going to go back to old-style British Rail.”
He said Labour would be “pragmatic” and “we have got to recognise that the system at the moment has flaws in it”.
“Passengers are paying high fares in this country and we are paying big subsidies from the taxpayer.”
East Coast was in public hands but the Government was “dogmatically” privatising it, he said.
“I want to see value for money for the taxpayer. I am never going to write a blank cheque and I am not going back to the past, but we are looking at the different options.”
He added: “There is a balance to be struck here because there are some benefits you can have sometimes from competition and we are not gong back to the old monolithic model that was British Rail.
“But we do need to look at how we can have a coherent system.”
The call for renationalisation from prospective parliamentary candidates came in a letter to The Observer.
They said: “Train companies walk away with hundreds of millions of pounds every year, despite running monopoly services and benefiting from £4 billion of public investment in the rail network every year.
“These profits are even helping keep down rail fares on the continent as many of Britain’s rail services are run by subsidiaries of the state railways of France, Germany and the Netherlands.
“Yet the not-for-private-profit model that works so well on the East Coast line has shown how there is a better way to run Britain’s rail services. As well as making over £1 billion of franchise payments to government, East Coast reinvests all of its further profit to benefit passengers.
“A commitment to extend this successful model to the rest of the rail network, as existing contracts come to an end, would mean that hundreds of millions currently lost in private profit would be available to fully fund a bold offer on rail fares.”
The demand was echoed by Lord Prescott, who used his Sunday Mirror column to say Mr Miliband should announce the renationalisation at the autumn party conference.
He said: “Ed Miliband says he wants to look at innovative ways of running our railway system. Well, 19 of these 25 railway franchises will have to be renegotiated over the next five years. So let each one lapse and pull them back into public ownership.”
Meanwhile the party stressed that a document setting out proposals for tough restrictions on the sale and advertising of alcohol, unhealthy food and tobacco was not official Labour policy.
The plan would end sports sponsorship by drinks firms and impose minimum alcohol pricing in an effort to cut the impact of drinking on Britons’ health.
There would also be new laws to curb the amount of sugar, fat and salt in food aimed at children, and a ban on advertising unhealthy products on TV before the 9pm watershed.
The Mail on Sunday reported that the plans are contained in a report to the “society” sub-group of the shadow cabinet.
A Labour spokesman said the leaked paper “represents a wide range of options” but was not official party policy.
“Improving public health is crucial to people’s quality of life. That’s why we’ve rightly pressed the Government to end their opposition to plain cigarette packaging,” the spokesman said.
“This paper represents a wide range of options and not Labour party policy.”
Rail, Maritime and Transport (RMT) union acting general secretary Mick Cash said: ” It’s about time Labour woke up to the fact that bringing the railways into public ownership is both popular and cost effective and would free up the money we need to invest in staffing and capacity to modernise the network.
“It remains a disgrace that the last Labour government allowed the private profiteering and exploitation on our railways to continue unchecked and it’s about time the party endorsed RMT’s programme to bring the entire system under public control, free from the racketeering and greed of the past two decades.”
Shadow business secretary Chuka Umunna said: “I don’t think we should be dogmatic or closed in either direction, public or private. The question is what works.”
He told BBC Radio 5 Live’s Pienaar’s Politics: “I’m pragmatic and I think what matters is what gives people a good deal, good service and doesn’t rip them off.
“We are not in the business of going back to old British Rail-style nationalisation but there is no denying how successful the East Coast main line has been.”
He said a Labour plan to ban alcohol sponsorship of sports events was “highly unlikely” but played down reports of a rift with shadow health secretary Andy Burnham about the proposals.
He said: ” Andy’s approach, and I think it is absolutely the right one, is how can we actually help people to lead more healthy lives?”
But he added: “We are not in the business of coming at people with a stick and forcing people to do things.”
Martin Griffiths, chairman of industry body the Rail Delivery Group, said: “It is wrong to blame private train companies for above-inflation increases in the average cost of commuter fares.
“The annual increase has nothing to do with who operates services and everything to do with government policy.
“Successive governments instructed operators to increase the average price of commuter fares in real terms every year from 2004 to last year. This has meant passengers, rather than taxpayers, have been paying a greater share of the cost of running the railway.
“Commuter fares were held down in line with inflation by the Government this year. Train companies supported that decision and government, whatever party is in power, is free to decide what happens in future years.
“Holding up publicly-run East Coast as a model of how to run a better railway is a myth that is equally wrong. Over the last 20 years, Britain’s railway has been transformed into the pre-eminent network in Europe.
“Renationalisation would be bad for passengers, taxpayers and the country as a whole. Ed Miliband is on the right track when he says that he is not going back to old-style British Rail.”
The Conservatives claimed renationalisation would add £10 billion to the deficit.
Tory former minister Bob Neill said the policy was ” something which would put up the deficit and which the unions have been demanding for years”.
He added: “Once again Ed Miliband has shown he is too weak to stand up for the people of Britain and face-down his union paymasters.”