The 1993 Railways Act – ‘30 years of waste’

5 November 2023

RMT Press Office:

Thirtieth anniversary of the 1993 Railways Act.

RAIL UNION RMT marked the 30^th anniversary today (Sunday November 5, 2023) of the 1993 Railways Act that privatised Britain’s railway with a new report which revealed that the three-decade debacle had seen at least £31 billion leak out of the system while passengers were paying eight per cent more in real terms to travel on a deteriorating system.

As a result, tens of billions of pounds have been siphoned out of the industry ever since by the private sector and into the pockets of the shareholders of the host of companies that feed off what should be a vital public service.

The union called for an end to this disastrous experiment and for the creation of a single, integrated publicly owned railway company which would save around £1.5 billion every year and cut fares by 18 per cent, helping to encourage more people back onto Britain’s railways.

RMT general secretary Mick Lynch said that the report showed that while Britain’s 30-year experiment with rail privatisation had been great for the City boardrooms, it had been an expensive debacle for passengers.

“Under privatisation the rail system has become a cash cow for the cloud of parasitic private interests that swarm around it, but passengers have got an increasingly expensive fractured railway with 55 million different fares, plagued by service cuts and cancellations and run by people fixated with cutting staff costs.

“Indeed, the governments wildly unpopular and unworkable ticket office closures plan was driven by a system that sought to protect profits at the expense of passengers.

“The U-turn on ticket office closures and the 30-anniversary of the debacle of railway privatisation should be a turning point that leads to the establishment of a nationally integrated publicly owned rail network run as a public service, a move that would be massively popular with passengers and communities,” he said.

Ends

Notes to editors:

Here is a link to the RMT report https://bit.ly/3QGO0mD

RMT’s report shows that at least £1.5 billion and very likely more leaks out of Britain’s railways every year in the form of profits extracted by train operating companies, rolling stock leasing companies, subcontractors and other costs that arise the fragmentation of the railways. Throughout privatisation, the annual outflow of funds would have enabled, on average, a cut of 14% in fares. If the railways were nationalised now and the flow of funds into the private sector was cut off, the money saved would fund a cut of 18% in fares.

For the travelling public, the cost of rail is now almost 8% higher in real terms than it was in 1995, before privatisation. This figure has dropped in the last two years only as inflation as risen. Until the cost-of-living crisis, when fare increases were decoupled from RPI inflation, fares were consistently 15-20% higher in real terms than before privatisation.

But passengers have seen little of this money reinvested in the railway. Instead, it’s flowed out of rail into the pockets of the shareholders of the host of companies that feed off what should be a vital public service. For passengers, the fragmented system has meant rising costs, timetable chaos, 55 million different fares, cancellations, service reductions, attempts to cuts staff from trains and stations and, most recently the wildly unpopular attempt to close all Britain’s ticket offices.