Latest Rail News

07.06.13

Union report blasts privatised rail system

The TUC has published a report reiterating its case against the privatisation of the railways, saying operators remain dependent on public subsidy and that the vast majority of the profits they do make go to shareholders rather than investment.

The report, ‘The Great Train Robbery’, was produced for the TUC by the Centre for Research on Social-Cultural Change (CRESC) at the University of Manchester.

It examines the main arguments used in the early 1990s in favour of privatisation – including cost effectiveness, extra investment, passenger comfort, innovation, added value, competitive fares and more passengers – and says that privatisation has failed on nearly all counts. The main exception, rising passenger numbers, is more to do with rises in GDP and changes in employment patterns, the report claims.

TUC General Secretary Frances O’Grady said: “This study explodes the myth that rail firms are bringing added value to our railways. In reality they rely upon taxpayers to turn a profit, virtually all of which ends up in shareholders’ pockets, rather than being used to improve services.

“Rail privatisation has not brought the improvements its cheerleaders promised – the average age of trains has increased and most new investment is funded by the state.

“The claim that private train operators are responsible for more people using the railways must also be taken with a huge pinch of salt. Passenger growth has mirrored changes in the wider economy and is not the result of creative marketing drives by companies.

“The Government must accept that the current model is broken. Its determination to impose franchising across the network – even on the East Coast Mainline which is performing well as a nationalised service – shows ministers are ignoring the evidence of 20 years of failure.”

CRESC director Professor Karel Williams said: “The privately owned train operating companies have hijacked the government’s rail reform agenda which is all about ‘getting franchising back on track’.

“Our research shows how the franchising system allows them to distribute profits at low cost from public subsidy.

“It would make sense to abolish the train operating companies and it would cost the taxpayer nothing if it were done as the franchises expired. 

“Train and track operation could then be integrated under a new not-for-profit company, National Rail, under cash constraints which enforced operating efficiency.”

Tell us what you think – have your say below or email opinion@railtechnologymagazine.com

Comments

Pedr Jarvis   07/06/2013 at 14:00

We have a privately owned railway company which has been in business some 180 years. We have occasional grants for capital works, but we pay all the operational costs and, taking one year with another, we pay our way. We have not declared a dividend since 1913 and the majority shareholding is held by a charitable trust. We are not the only company in the same situation. I sometimes wonder whether this may be a model for other branch lines? Would county councils take on branch lines, as in Germany? Just wondering....

Add your comment

 

Rail industry Focus

  • 15/11/2019A workforce which reflects society

    Loraine Martins MBE, Director of Diversity and Inclusion at Network Rail, joins us in the studio for the third episode of our RTM podcast, talking at length about her role and how it came about...
  • 02/11/2019Monica Barbosa: Women In Rail

    Director of business development and communications at Xrail, Monica Barbosa, thinks women are missing out on exciting opportunities because the lack of gender diversity in the rail industry.
View all News

Comment

The challenge of completing Crossrail

05/07/2019The challenge of completing Crossrail

With a new plan now in place to deliver Crossrail, Hedley Ayres, National Audit Office manager, major projects and programmes, takes a look at ho... more >
Preparing the industry to deliver trains for the future

04/07/2019Preparing the industry to deliver trains for the future

The move to decarbonise the rail network involves shifting to cleaner modes of traction by 2050. David Clarke, technical director at the Railway ... more >

'the sleepers' blog

Maximising efficiency requires investment in data, but it’s rewards for rail could be extensive

14/11/2019Maximising efficiency requires investment in data, but it’s rewards for rail could be extensive

Rail Technology Magazine’s Matt Roberts explains the significant role data can play within the future development of the rail industry. Standing as a cornerstone of the UK transport network, the rail industry is forever striving to in... more >
read more blog posts from 'the sleeper' >

Interviews

Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

24/06/2019Andrew Haines, CE of Network Rail, tells BBC News his organisation could issue future rail franchises

Andrew Haines, the Chief Executive of Network Rail, has told the Today programme on Radio 4's BBC’s flagship news programme that he would not rule out his organisation issuing future r... more >
Malcolm Holmes, executive director of West Midlands Rail Executive, announced as TCR Midlands speaker in Birmingham

24/06/2019Malcolm Holmes, executive director of West Midlands Rail Executive, announced as TCR Midlands speaker in Birmingham

Ahead of his appearance, Malcolm Holmes spoke with Rail Technology Magazine about what key leaders in the industry were doing to improve rail in the Midlands. He said: “It’s very... more >