Government’s multi-million taxpayer bailout of South Western

Government’s multi-million taxpayer bailout of South Western

27 December 2018

RMT Press Office:

Government’s multi-million taxpayer bailout of South Western Railway on strike days could pay for New Year Fare cut for passengers research finds.

As South Western Railway Guards again take strike action, in defence of safety and accessibility, the cost to the taxpayer to date of bailing out South Western on strike days has been revealed to be over £26 million by New Year’s Eve.

That is enough to pay for a 2.5% New Year’s fare cut for all South Western Railway passengers the research has found.

Prior to his resignation as Rail Minister Jo Johnson admitted to MPs that South Western had made an application to be reimbursed for revenues lost as a result of industrial action.  The new rail minister, Andrew Jones, subsequently told MPs that the details of any payments made will be “subject to commercial confidentiality.”

RMT general secretary Mick Cash said:

“Official parliamentary answers have shown that the government is preparing to bail out South Western Railway for revenues lost as a result of strike action.

“Passengers will be outraged to know that instead of taking steps to resolve this dispute rail ministers are instead prolonging it by using tax payers’ money to prop up South Western Railway on strike days.

“Thanks to the generosity of the government South Western don’t lose a penny from strikes and therefore have little incentive to negotiate seriously.

“We estimate that the cost to date of this strike bail out is over £26 million, enough to fund a 2019 fare cut for all South Western Passengers.”

ENDS

 

Notes to editors
 
Parliamentary Answers
 
South Western Railway: Industrial Disputes: Written question - 189672
Q
Asked by Ian Mearns
(Gateshead)
[R]
Asked on: 09 November 2018
Department for Transport
South Western Railway: Industrial Disputes
189672
To ask the Secretary of State for Transport, pursuant to the Answer of 25 July 2018 to Question 166508 on South Western Railway: compensation, what payments (a) have been made and (b) are planned to be made to South Western Railway for revenues lost as a result of official industrial action.
A
Answered by: Andrew Jones
Answered on: 15 November 2018
a) No payments have been made;
b) Details of SWR’s application made in accordance with the Franchise Agreement provisions concerning Industrial Action that is under consideration by the Department are subject to commercial confidentiality.
South Western Railway: Industrial Disputes:Written question - 166508
Q
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.
 
 
Strike bailout calculations
 
2017
•          2017 SWT passenger income was £1,003,000,000 (passenger income figure from 2016-17 UK Rail Industry Financial information produced by ORR)
•          2017 average daily passenger income: £2,747,945.21
•          2017 total number of strike days: 3
•          2017 cost of strikes in relation to passenger income: £8,243,835.62
 
2018
•          2018 SWT passenger income £1,040,111,000 (calculated by applying the 2018 average fare increase for regional operators of 3.7% to the 2016-17 passenger income figure)
•          2018 average daily passenger income £2,849,619.18
•          2018 total number of strike days (taken and notified): 28
•          2018 cost of strikes in relation to passenger income (taken and notified): £79,789,336.99
 
Total cost of strikes
•          Total number of strike days 2017 & 2018 (taken and notified): 31
•          Total cost of strike days 2017 & 2018 in relation to passenger income: £88,033,172.60
 
SWT claims
•          SWT claim 70% of trains are running on days of strike action so the remaining 30% of the above cost is £26,409,951.78.
 
 
Cost of strike action versus fare increase
•          The cost to passenger income of 30% of passenger services not running (£26,409,951.78) is 0.8 times the value of the 3.2% fare increase (£33,283,552) to SWT
 
£26, 409, 951 (cost of reimbursement) is 2.54 % of £1,040,111,000 (2018 total passenger income)  

 

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