tuc-commissioned report: the great train robbery

Dear Colleagues,

TUC-commissioned report The Great Train Robbery

I write to draw members’ attention to the recent damning report into rail privatisation, The Great Train Robbery written for the TUC by the Centre for Research on Social-Cultural Change (CRESC) at the University of Manchester.

This report is yet another forensic dismantling of the case for rail privatisation, concluding that privatisation of the railways has completely failed to deliver for passengers and taxpayers, resulting in miniscule levels of private sector investment, whilst the public continue to be conned by the private companies that run our railways.

The Great Train Robbery analyses the aims of rail privatisation, as stated by the Conservative government in 1994 and questions whether any of these have been achieved:

· Cost effectiveness - TOCs are entirely reliant upon public subsidies to run rail services. The top five recipients alone received nearly £3bn in taxpayer support between 2007 and 2011, resulting in operating profits of £504m - over 90% (£466m) of which was paid in dividends to private shareholders.

· Extra investment – the report shows that rolling stock investment by the TOCs is half that of British Rail in the four years immediately before privatisation; over 90% of new investment in recent years has been financed by Network Rail, including major infrastructure upgrades, such as on the West Coast Mainline; and Network Rail now spends more on repaying it’s government guaranteed debt of £30bn than it does on rail maintenance work.

· Passenger comfort - a 60% increase in rail passengers since 1994/95 has been accompanied by a 3% increase in the number of new carriages, resulting in serious overcrowding on the busiest rush hour routes.

· Innovation – any significant private sector investment in new technology, such as Virgin's tilting trains, is always underwritten by the taxpayer through subsidies to TOCs and guarantees to ROSCOs.

· Added value – CRESC academics show TOCs paid Network Rail just £1.59bn in track access charges in 2012, compared to £3.18bn paid to its predecessor Railtrack in 1994, representing a further, indirect subsidy to TOCs. It also means that the full extent of taxpayer subsidy to the privatised rail industry is far greater than reported and that the supposed ’added value’ from privatisation is a complete myth.

· Fares - the UK has the most expensive rail fares in Europe. Long distance, day return and season tickets are double the price of similar tickets in France, Germany, Italy and Spain, where rail services are publicly owned and run. Average UK train fares increased at three times the rate of average wages between 2008 and 2012.

· Passenger numbers - the report dismisses claims that privatisation created the 60% increase in passenger numbers since the early 1990s, confirming that this increase was largely down to rising GDP and changes in employment patterns rather than the result of privatisation.

A copy of The Great Train Robbery can be downloaded from the TUC website here:

http://www.tuc.org.uk/tucfiles/603/The_Great_Train_Robbery_7June2013.pdf

A hard copy is also attached and I would be grateful if you could bring the content of this comprehensive demolition of rail privatisation to the attention of Branch members.

Yours sincerely

Bob Crow

General Secretary