Cost of rail privateers revealed

The RMT rail workers’ union last month released a report revealing “the true cost of the government’s slavish devotion to subsidising private profit”. The report was launched on the day Southeastern railway services were taken back into public control.

The private operator was stripped of its franchise after a government investigation found it had not declared more than £25 million of taxpayer funding. Train services on the line are now run by the Department for Transport.

The RMT report, The unbearable cost of failure: private profiteering on Great British Railways, reveals that during the pandemic year, when the taxpayer has taken on the full cost of the railways, train operating companies and rolling stock companies stand to make more than £1.1 billion in dividend payments to their shareholders.

It also discloses that if the government continues to prop up the failed private train operators, they will extract more than £950 million in profits to be distributed as dividends between 2020 and 2027, not including the annual suction of around £260 million by the rolling stock leasing companies.

The union calculates that if the remaining franchises were taken into public ownership they would stop this profits leakage.

In just one year, it says, they could fund an inflation-matching pay rise for all staff and place a windfall tax of 50% on rolling stock company profits that would fund a 3.6% fare cut for passengers.

https://www.rmt.org.uk/news/publications/the-unbearable-cost-of-failure-policy-briefing