£86 million of taxpayer’s money to South Western Railway

£86 million of taxpayer’s money to South Western Railway

29 November 2019

RMT Press Office:

Government doles out £86 million of taxpayer’s money to South Western Railway when not running trains on strike days which proves dispute is politically motivated says RMT.

Parliamentary answers and rail bosses’ reports to investors have revealed that South Western Railway are set to get a tax payer bailout of £86 million for strike action to date and over the coming weeks to cover lost passenger revenue from the RMT strike action starting Monday in a move that rail union RMT says proves that the refusal of the company to agree a settlement is wholly politically motivated.

RMT has slammed both the Government and SWR for engineering the month long strike for blatant political purposes.

Parliamentary answers have already revealed that the Government and the company are in negotiations regarding the bail out for lost revenues. The Secretary of State, Grant Shapps, has told MPs that the amount is subject to “commercial confidentiality” but South Western Railway bosses have boasted to investors that 

“We’re doing a lot of work behind the scenes to work through what we think the impact should be and what we think we’re due”[1].

Representatives of South-Western or their owners, FirstGroup and MTR, have held at least five meetings with Rail ministers in the first six months of this year alone, more than any those of any other Train Operating Company owner. Records of meetings after June 2019 have not been disclosed by the Department for Transport but FirstGroup’s recent half year results report noted that “we remain in discussions with the DfT concerning commercial and contractual remedies”.[2]

RMT General Secretary Mick Cash said, 
“This £86 million tax payer funded government bailout means South Western Railway will be paid by the government even when they don’t run trains on strike days. Fat cat rail bosses won’t lose a penny and have no incentive to settle.

“This is an astonishing political intervention by the government during the general election that deliberately politicises and prolong this dispute.

“The Secretary of State for Transport Grant Shapps has told MPs that the exact size of the eventual bailout is a secret. Well passengers have a right to know what exactly is going on and I am now calling for an urgent meeting with Secretary of State Grant Shapps who clearly has the power to resolve dispute.”

ENDS

Notes to editors

RMT has used the impact of the first strikes to calculate that South Western are likely to be seeking £86 million in lost revenue. (Table 1)

 

Table 1: Compensation for lost passenger revenue from industrial action on South West Trains

South-Western Railways – Possible indemnification figures

 

2017

2018

2019

TOTAL

Passenger income[3]

£1,003,000,000

£914,000,000

£939,592,000

 

Average daily income[4]

£2,747,945

£2,504,110

£2,574,225

 

Strike days[5]

3

30

35

 

Strike day revenue losses[6]

£8,243,836

£75,123,288

£90,097,863

 

Estimated real loss[7]

£4,121,917.81

£37,561,643.84

£45,048,932

£86,732,493

 

[3] Passenger income is taken from the figures reported to the ORR for 2017 and 2018 and contained in https://orr.gov.uk/rail/publications/reports/uk-rail-industry-financial-information . The passenger income figure for 2019 is projected using 2018's figure uprated by inflation of 2.8%.

[4] Average daily income is the annual passenger income figures divided by 365.

[5] Strike days for 2019 include the 9 days taken in August and September and the 27 days called for December 2019.

[6] Strike day revenue losses are based on 100% service cancellation.

[7] The estimated real loss is based on a conservative estimate of 50% strike day service cancellation and is based on South West Railways’ most recent statements.

 

 

Q

 

Asked by Kate Hoey
(Vauxhall)
Asked on: 19 July 2019
Department for Transport
South Western Railway: Industrial Disputes
Commons
279375
To ask the Secretary of State for Transport, pursuant to the Answer of 25 July 2018 to Question 166508 on South Western Railway: Industrial Disputes, whether (a) he and (b) officials in his Department have provided advice South Western on payments that will be made to reimburse that company for revenues lost as a result of official industrial action. 

Answered by: Grant Shapps 
Answered on: 29 July 2019 
This information is subject to commercial confidentiality between the parties.

 

 

 

 

 

 

 

Asked by Laura Smith

(Crewe and Nantwich)

Asked on: 20 July 2018

Department for Transport

South Western Railway: Industrial Disputes

166508

To ask the Secretary of State for Transport, pursuant to the Answer of 28 June 2018 to Question 155260 on rail strikes, whether South Western Railway has made an application in the last 12 months to reimburse the company for revenues lost as a result of official industrial action.

A

Answered by: Joseph Johnson

Answered on: 25 July 2018

South Western Railway has made an application with regards to industrial action.

 

 

followus

Facebook logo Twitter logo Youtube logo insta3

Want to receive updates from us? Subscribe to a mailing list

Tagged with: south western railway, swr, guards, conductors, doo, dco, driver only operation,