‘GREAT BRITISH RAILWAYS’?

16 The government finally published its long-delayed report into the future of the railways last month and launched ‘Great British Railways’ with a clear admission that the privatisation and fragmentation imposed over 25 years ago had failed. RMT welcomed the fact that the Williams-Shapps Plan recognised that rail privatisation had failed to deliver, only creating a complex and fragmented system that does not work for passengers which remains particularly unpopular with the public. The plan recognised that the costs of this fragmentation are substantial and estimated that removing duplication and interface costs could save £1.5 billion every year after five years. The creation of a unified state body, Great British Railways, with responsibility for the infrastructure, timetabling and, crucially, ticketing, could have been a significant step forward towards recreating many of the benefits of a publicly owned and integrated railway. But in fact, as RMT general secretary Mick Lynch said, Great British Railways represented “a missed opportunity by the government to make a clean break from the failures of the past that have left Britain's railways in the slow lane”. The ticketing reforms announced were highly limited. Instead of genuine flexible tickets, for example, the plan envisages what is essentially a carnet system. More fundamentally, having come so close to the logical step forward, the government had defaulted to its dogmatic attachment to private sector train operation. ‘Most passenger services’ will be run by private sector operators under new Passenger Contracts, run like concessions. It is not clear what will happen to the services being run by the Department for Transport’s Operator of Last Resort. GUARANTEED PROFITS Passenger Service Contracts are touted as being a new, more regulated mode of service delivery. In reality, they continue the approach of the EMAs and ERMAs, which shift all the risk onto Great British Railways, while guaranteeing profits for private train operators. Since 1997, private train operating companies have extracted £3.2 billion in dividend payments from franchising.  According to DfT data published this month, in the six month period of the EMA contracts, during a national crisis, the train operating companies received management fees (available to be turned into dividend payments) of £88 million. This is guaranteed profit. In addition, the plan says nothing about the profiteering by the three rolling stock companies, the Roscos. RMT analysis has shown that these companies extract an average of £260 million in dividends every year. This is now being paid for directly by the taxpayer. During the pandemic year, Eversholt paid out a £46.5 million dividend, claiming that because of government support they were at no risk from Covid-19. So, the profiteering is set to continue. Given that 71 per cent of the train operating companies are foreign owned, while the Roscos have overseas subsidiaries in low tax regimes and tax havens, much of this profit will flow not just out of the industry, but out of the country. RMT’s position is clear. Instead of guaranteeing profits for private train operators, Great British Railways should directly run these passenger services as set out ,for example, in GB Rail: Labour’s plan for a nationally integrated publicly owned railway. That would mean that any profits made could be reinvested in the railways, as happens with the services currently run by the DfT’s OLR. LNER paid a dividend of £40 million to the DfT last year. If all these contracts were run directly by GBR, including the ones currently being run by the OLR, this money would be reinvested in the railways. Under the plan as envisaged, most profits will continue to go overseas to foreign owed state companies or shareholders. DEVOLUTION The Williams-Shapps Plan is also vague on the impact on devolved authorities. The plan says, ‘Existing devolved administrations and authorities across Great Britain will continue to exercise their current powers and to be democratically accountable for them’. It is claimed that ‘The whole-system, planning and operating functions needed to deliver a joined-up network will be directed by Great British Railways, working in partnership with devolved transport authorities where appropriate.’ The plan does not include any proposals to break up the infrastructure on regional or RMT helpline 0800 376 3706 :: june 2021 :: RMTnews ‘GREAT BRITISH RAILWAYS’? RMT slams the ‘missed opportunity’ of the Williams-Shapps plan to end fragmentation