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The RMT rail union has marked the 30th anniversary of the 1993 Railways Act that privatised Britain’s railway with new analysis revealing that the “three-decade debacle” has seen at least £31 billion leak out of the system.
Passengers are now paying eight per cent more in real terms to travel on a deteriorating system, the union says.
Tens of billions of pounds have been “syphoned out of the industry” by the private sector and into the pockets of the shareholders, according to the RMT dossier.
The railways remained nationalised in Northern Ireland and rail was re-nationalised in Wales in February 2021 and Scotland followed a year after in April 2022.
The RMT union has called for an end to the “disastrous experiment” since John Major began the process of privatisation through the Railways Act 1993. Unions have long called and for the creation of a single, integrated and publicly-owned railway company which they say 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.
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An official government review, the Williams-Shapps report, in 2021 estimated that the costs of duplication and interface friction in the fragmented system might be worth £1.5 billion a year. Ministers say they are committed to unifying the railways through a ‘single guiding mind’ of a new quango called Great British Rail. However, the plans appear to have stalled and the system would maintain a complex network of outsourced firms.
Office for Rail Regulation figures show how much rail fares have risen in real terms since the network was privatised.
The train tracks, signalling and many of train stations themselves are currently managed by government-owned Network Rail, but it is saddled with huge amounts of debt, some of which stems from the collapse of private operator Railtrack in 2002.
The rail system currently faces allegations of a “worst of all worlds” situation, with a highly fragmented system but with the Department for Transport directly appointing operators to run regional monopolies. The previous franchising system was scrapped in September 2020 amid a collapse in passenger numbers, with the DfT guaranteeing the rail firms’ income.
RMT general secretary Mick Lynch said that the briefing shows 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 government’s wildly unpopular and unworkable ticket office closure plan was driven by a system that sought to protect profits at the expense of passengers,” Lynch said.
He added: “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.
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 could fund a cut of 18% in fares, the union says.
For the travelling public, the cost of rail is now almost 8% higher in real terms than it was in 1995, before privatisation was completed. This figure has dropped in the last two years only as inflation has 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, according to official figures.
But passengers have seen little of this money reinvested in the railway. Instead, “it 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,” a spokesperson for the union argued.
For passengers, the fragmented system has meant rising costs, timetable chaos, 55 million different fares, cancellations, service reductions, attempts to cut staff from trains and stations and, most recently, the “wildly unpopular” attempt to close all Britain’s ticket offices, RMT says.
The new TSSA rail union General Secretary, Maryam Eslamdoust, added: “Privatisation has been an expensive failure for taxpayers and passengers alike. The privatized system simply doesn’t work…
“It’s time for the Tories to accept that privatisation hasn’t worked and bring all Britain’s railways back into public ownership. Taxpayers and passengers deserve nothing less.”
Opinion polls consistently show public support for nationalisation of railways. The latest Yougov tracker shows 64% in favour of public ownership and just 11% opposed.
Byline Times have readers reacted to the privatisation anniversary by mocking the state of the railways. One said: “I love the fact my train journey at weekends is mostly on a bus!”
Michael Spring wrote on Threads: “When I left Hartlepool for Kent (300 miles) in 1984 I frequently went back for visits by train. It was quick, reliable, pleasant and affordable. I went this week and it was a total nightmare – slow, unreliable, stressful and eye-wateringly expensive.”
Another reader added they’d celebrate by trying to buy a ticket. Except “the ticket offices are closed at Blackfriars.”
“It’s mostly unaffordable (and unreliable) to travel by train – unless you book way in advance and Taurus is ascending in the east. It’s tragic,” one wrote.
And on X a Byline Times reader said they’d celebrate with “a commemorative toasted bacon sandwich…with a couple of those little plastic sachets of ketchup you rip open with your teeth, half a cup of tea & an entirely inadequate potlet of UHT milk.”
Another said if they’d known the anniversary was coming up “I would have booked an advance purchase trip 11 weeks ago.”
Others were understandably embittered: “[I’m celebrating early by standing all the way from London to Plymouth!” Another replied: “[It’s a] replacement bus service for me. I’m welling up.”
The first private train in February 1996 was actually a replacement bus service, according to a report in the Independent.
The Government was recently forced to cancel plans to close nearly all ticket offices following public anger over the moves to save cash.
You can read the RMT briefing here. Industry lobby group Rail Partners was contacted for comment.
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