Beth Farhat column: concern is growing on rail franchises

Regional head of the TUC calls for a publicly owned rail net worth that puts people before profit

Iain Buist Beth Farhat, regional secretary at the Northern TUC
Beth Farhat, regional secretary at the Northern TUC

On March 31, trade union activists and campaigners, coordinated by Action for Rail, will be taking action at stations across the country, calling for a publicly owned rail network that puts people before profit.

We are concerned about Government decisions on rail contracts for the Northern, Transpennine, East Anglia, East Midlands and Great Western franchises. This is because Government plans across the rail network could lead to higher fares, more crowded trains, and service and staff cuts including ticket office closures, reduced station staffing, more driver only operation, and fewer track staff.

Similar plans are being rolled out across the network and it is clear privatisation does not deliver the best deal for passengers, taxpayers and the workforce.

Every year, privatisation wastes over £1bn – with money leaking out in areas such as shareholder dividends, company profits, and costs arising from fragmentation of our railways. In 2013-14, taxpayers contributed £3.8bn to the rail network, while private train companies paid out £183m in dividends to shareholders. According to the recent ORR figures, in 2013-14 East Coast was one of only two train operators that gave back more to the public coffers than they received in subsidies.

We now have the most expensive fares in Europe.

A recent article in BBC News Magazine asked the question: ‘Would it be realistic to renationalise the railways?’ Using as a premise the recent passing of the East Coast main line from public to private hands, the article provides an interesting insight into some of the key issues of debate among supporters of public or private ownership.

The article notes that Directly Operated Railways (DOR), the state-run body that took over East Coast after private operators GNER and National Express failed to deliver, had “returned a billion pounds in premiums” to the Treasury. However, this didn’t stop GNER making £213.5m in profits while paying out £196.7m in shareholder dividends between 1997 and 2007. In this same period, GNER received a total of £342.6m in net subsidies from the Government.

Privatisation has failed. It is time for radical reform of our railways. We need a system that benefits passengers, taxpayers, the economy and environment. Public ownership would create a much fairer and more efficient system, leading to huge savings for taxpayers and passengers. Public ownership could fund a 10% reduction in regulated fares from 2017-18.

Activity in our region is taking place at the following stations between 7am and 9.30am at: Berwick upon Tweed, Carlisle Citadel and Newcastle Central, 8am-9.30am.

And on the morning of April 1, to mark the 21st anniversary of the Railways Act that brought in privatisation, further activity under the banner ‘Don’t be fooled by franchises’ is taking place at Berwick upon Tweed, Haltwhistle, Hexham, and Wylam.

Beth Farhat, Northern TUC Regional Secretary


David Whetstone
Culture Editor
Graeme Whitfield
Business Editor
Mark Douglas
Newcastle United Editor
Stuart Rayner
Sports Writer