REBOOTING RAIL PRIVATISATION

RMT helpline 0800 376 3706 :: march 2020 :: RMTnews 8 R MT has warned that the government’s Williams expected review to overhaul the privatised railway – badged as the ‘end of franchising’ – will only lead to more profiteering and more dividends flowing overseas while leaving passengers trapped in a fragmented and expensive rail network. RMT’s new report ‘Reanimating the Corpse’ examines the record of management contracts and concessions on the privatised railway, widely touted as being the government’s favoured option for the future of privatisation, revealing that: • There is no evidence that concessions and management contracts will be any better than the current franchises in running a punctual and reliable service. • Out of total profits of £204 million made by the concessions since they began, £196 million (96 per cent) has been turned into shareholder dividend. • The concessions account for eight per cent of the total dividend payments made by TOCs in the last 10 years, but they account for less than four per cent of the passenger kilometres on the network. • 65 per cent of this dividend bonanza has flowed overseas because of the degree to which private rail companies are owned by overseas (often foreign state-owned) companies. • Concessions and management contracts will represent no break with the failed privatisation of the past 27 years and may even offer greater opportunities for private companies to extract value from our railway system at public expense. The report found little evidence that any attempt to resettle Britain’s privately operated railway network on the basis of some variant of concessions or management contracts will do anything but continue to deliver a fragmented system that’s bad for passengers but great news for shareholders. The UK rail sector also has a growing problem with the overseas ownership of the private companies operating its network. Overseas ownership of the UK rail industry has more than doubled in the last decade and, as RMT revealed back in 2011, these companies are using profits and dividends extracted in Britain to cross-subsidise their own railway. In 2011, a German transport minister explained that “we're skimming profit from the entire Deutsche Bahn and ensuring that it is anchored in our budget - that way we can make sure it is invested in the rail network here in Germany”. RMT general secretary Mick Cash said that there was going to be a lot of big talk shortly about a new beginning on the railways but the reality was that any attempt to re-establish privatisation on the basis of concessions and management contracts is going to be another pathetic attempt to reanimate a corpse. “Grant Shapps knows that it was public ownership that rebuilt our infrastructure and public ownership that improved services on the East Coast Mainline and that’s why he announced the nationalisation of Northern recently. “Any government that wasn’t in bed with big transport companies and City financiers would turn its back on this failed experiment, follow the logic that’s staring it in the face, and bring the whole network into public ownership. “The real solution is staring the government in the face. “The infrastructure network was nationalised in 2002 following a record of appalling private sector failure. By March, the East Coast Mainline and Northern will be in public ownership following years of dismal private sector failure. “Instead of trying to reanimate the corpse of privatisation - breathing life into this failed and decomposing carcass for one more round of profiteering at public expense - it’s time to draw the curtain on the failed experiment once and for all and bring the whole network into public ownership,” he said. REBOOTING RAIL PRIVATISATION RMT report warns the government plans to resuscitate rail privatisation