27 March 2018
RMT Press Office
RMT demands public ownership as Government lines up another £250 million bail-out for Britain's failing rail franchises
RAIL UNION RMT today demanded public ownership of the railways as it emerged that rail franchises are haemorrhaging money at extraordinary rates with the figures confirmed in the recently published Department for Transport’s (DfT) Supplementary Estimate for its 2017-18 budget.
The budget lays out the necessary resources and cash required to support the functions of the Department, its agencies and arms length bodies. It is the final opportunity in the process to ensure that the Department has the necessary resources and cash for the remainder of the financial year. It reveals that anticipated tax-payer support for the private rail companies, the vast majority of which are overseas owned, falls just short of a staggering quarter of a billion pounds.
The document says:
“Section O – Support for Passenger Rail Service states: Resource +£248.7m: The variance relates to the impact on the net revenues received from the train franchise portfolio, including the adverse impact on revenues from the TSGN franchise as a result of severe disruption from sustained industrial action and performance issues.”
RMT suspects that the figure excludes the costs of the salvage operation on the East Coast Main Line. Stagecoach Chief Executive Officer Martin Griffith told the Public Accounts Committee when discussing East Coast on the 26th February that “We are honouring our contractual obligations under the franchise”, throwing up huge question marks as to what franchises are losing money and where the huge sums of taxpayer-financed corporate welfare are being doled out.
It is already known that the taxpayer has handed Govia Thameslink Railways a bung of £22 million to underwrite their alleged losses incurred during the on-going dispute over guards and rail safety – a financial sweetener signed off by Chris Grayling and his department that means that GTR’s Southern Rail operation has no interest whatsoever in resolving the issues at the heart of the dispute. However, that figure is less than a tenth of what’s now on offer to Britain’s greedy rail companies under the franchising racket that privatises profits and nationalises the risks.
RMT General Secretary Mick Cash said;
“The fact that the Government have been forced to admit that the taxpayer is being expected to bail-out Britain’s failing private rail operators to the tune of a quarter of a billion pounds is nothing short of a scandal. There appear to be no depths to which the private rail franchising racket can sink that would force the Government to pull the plug and bring the services back into public ownership. Profits are privatised and risks are carried by the taxpayer and it’s no surprise that over 70% of the public now support RMT’s campaign for the railways to be renationalised.
“The allocation of expenditure is vague even by DfT standards in this Supplementary Estimate, so you can only wonder why the Department for Transport isn’t coming clean on which other franchises are failing. We can only assume it’s to try and cover up the scale of this scandal and keep the public in the dark as to the next operator to follow Virgin/Stagecoach on the East Coast into financial collapse.
“The only solution to this financial racketeering on Britain’s railways is public ownership.”