Troubled Northern Rail will be taken into public ownership this week as the national rail network falls further into chaos.
After years of poor performance millions of customers faced a 2.7 per cent increase in fares this month as the firm’s lines plunged into chaos and cancellations.
The formal renationalisation will be ordered by Transport Secretary Grant Shapps who descibed the private ownership’s delivery as “completely unacceptable”.
It will become the second of the national networks 16 rail passenger franchises to be nationalised under the Government-owned “operator of last resort” which is owned outright by the taxpayer.
South Western Railway, which is owned by First Group and Hong Kong firm MTR, has also been described by Mr Shapps as “unsustainable” after making a loss of £137 million last year, and is also on the verge of renationalisation.
It now faces going bust without Government intervention.
Northern Rail - which runs from Newcastle to Leeds, Liverpool, Hull, Manchester and Stoke - barely manages to run half its trains on time.
The line is run by Arriva and owned by German state-owned DeutchesBahn and has been involved in a long-running dispute over the role of guards.
Its long-term future, and that of the UK network is currently under Government review.
Labour MPs and passenger groups have called on the Government to end all private rail contracts which fail to deliver for taxpayers and passengers.
They want franchises placed under the control of operator of last resort as a first step towards full scale renationalisation.
Shadow Transport Secretary Andy McGowan criticised the Tories for failing to act sooner. He said: “They have stood by for five years as the private operator has run it into the ground causing misery for millions of passengers.
“The Government should immediately take all failing contracts into public control. Tracks and trains need to be brought together under one, unified rail operation.”
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