Taxpayers being used to fund rail dispute to the tune of £1bn

Taxpayers being used to fund rail dispute to the tune of £1bn

29 July 2023

RMT Press Office:

RMT has found that rail companies are being indemnified against any losses to the tune of £1bn on the same day there is a national strike on the railways.

20,000 railway workers have walked out today in a long running dispute over working conditions, job security and pay.
Rail companies have had their losses from strike action covered by taxpayer funded indemnity which has meant there is no financial incentive for the rail operators to settle the dispute with the RMT.
The decision to close ticket offices as part of a cuts programme will only save around £89m - a tiny fraction of the £1bn spent by the government to artificially keep the dispute going and prevent a settlement. 
Between March 2020 and September 2022 rail companies made £310 million in taxpayer-funded profits - again dwarfing any potential cost savings from closing 1,000 ticket offices and cutting over 2000 station staff posts.
RMT general secretary Mick Lynch said: “The public is being ripped off not only to financially underwrite this dispute that could have been settled 18 months ago but also to fund the closure of ticket offices which they rely on.
“Closing 1,000 ticket offices will only save a small fraction of the money spent on rail company indemnity to prolong the strike and the handsome profits they have made.
Ticket office closures are not popular with the public and we have seen mass opposition across the country.
“Not only are ticket office closures being used as a fig leaf for the wholesale de-staffing of stations but this is the thin end of wedge for getting rid of staff across the railway network - something our union will oppose vigorously.
“The elderly, vulnerable and disabled will no longer want to and in some cases be unable to use the railway because no trained and friendly staff are waiting to assist them.
“Our union remains wholly committed to reaching a negotiated settlement on pay jobs security and conditions.
“But our members remain steadfast in their industrial action and will not be cowed into submission by anyone.”



  1. The total annual cost of a ticket office worker’s job, including salary, National Insurance Contributions and Employer’s contribution to the Railways Pension Scheme is around £30,000. 2,300 jobs are at risk under the employers’ proposals totalling a saving of £69 million.

  2. The TOCs’ annual management fees are estimated at around £110 million. The government has not updated information on its fee payments since September 2021, but RMT produced forecasts on the basis of payments made. See ) All of this profit is available to be turned into dividends. Historically, the TOCs have taken at least 65% of their profits before tax out in dividend payments and invest almost nothing in the railways (see )

  3. The cost of indemnifying he TOCs against the loss of ticket revenue is likely to be almost £1 billion now. In May, the Daily Mail claimed to have seen ‘internal industry analysis’ estimating the direct cost as £900 million, since when there have been four further days of action by the RMT. RMT’s analysis of the private TOCs alone (discounting LNER, Northern and Southeastern) gives a figure of £725 million. Questioned in Parliament about RMT’s methodology, Steve Montgomery from the Rail Delivery Group said it was likely to be broadly right but probably higher. Both calculations point to a figure that’s likely to be around £1 billion in direct taxpayers’ subsidies to the TOCs for the strike action. ( )

  4. The total cost of the dispute is calculated by adding the £950 million in taxpayers’ money used to bankroll the TOCs, with the cost in terms of Gross Value Added lost by other workers not coming into work. This was estimated by the CEBR in December at £500 million. Using their estimates of the daily impact of rail strikes of £26 million, we can estimate the cost now at £840 million. In addition, in May, UK Hospitality estimated their industry’s lost footfall at £3.25 million. This is likely to be higher now, giving a figure in excess of £5 billion.

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

Tagged with: RMT, Mick Lynch, National Rail Dispute, Defend Rail Jobs Pay and Conditions