PROFITEERING OUT OF A CRISSIS

RMT helpline 0800 376 3706 :: september 2020 :: RMTnews 4 The Coronavirus crisis has seen railway workers across the industry putting their lives on the line to keep Britain’s economy moving. It’s also blown away the last arguments for anything other than a nationalised railway. Franchising was already broken, as almost everyone agreed. But when the going got tough, the private companies threatened to walk away from the railways unless they were handed a multi- billion pound bailout and rather than take the obvious next step, the government opened our wallets and handed them a massive subvention of public money. The Emergency Measures Agreements (EMAs) which see the public picking up all the costs of the train operating companies, already cost the taxpayer £900 million a month. Now, thanks to RMT research and the work of RMT’s Parliamentary Group, we know how much of that money is being turned into profit- making during a crisis that has cost more than 60,000 lives. The carrot, dangled for the private companies in return for not walking away from the railways, was the offer of a management fee which would give them some operating profit. Some version of this had been touted by the rail companies and hinted at by the Secretary of State for Transport for months ahead of what was supposed to be the publication of Keith Williams’s review. The collapse in passenger revenue made it the government’s last throw in avoiding nationalisation. Back in February RMT warned that this model was simply a case of ‘reanimating the corpse’ of privatisation and would not stop private companies sweating the industry. RMT’s new report, ‘profiteering at a time of crisis’ puts some firm numbers on this truth. Pressed by RMT Parliamentary Group chair Ian Mearns, the Rail Minister Chris Heaton Harris confirmed that at the end of the first six months of the EMAs, each company would receive a lump sum equivalent to two per cent of the cost base of the railway. The Office of Rail and Road calculates the cost base of the railways as £11.5 billion last year, meaning that over six months, the Train operating companies could expect to make an operating profit of around £115 million, rising to £231 million over a year if the agreements are extended. That’s roughly what they were making in operating profit before the crisis. So no end to the profiteering there then. But that’s not all. Questions from RMT Parliamentary Group MP Grahame Morris also exposed the way that the EMAs allowed the continuation of obscene profiteering by the Rolling PROFITEERING OUT OF A CRISIS RMT Parliamentary Group exposes rampant profiteering from the pandemic by private train operating companies and ROSCOs