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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 [email protected]


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....

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