Join the Socialist Party Join us today!

Printable version Printable version

Facebook   Twitter

Link to this page: https://www.socialistparty.org.uk/issue/579/7280

From The Socialist newspaper, 13 May 2009

Renationalise the railways

THE GOVERNMENT'S budget for Britain's rail system is facing chaos. First Great Western wants to walk away from a vital updating contract without footing the entire bill of 1.1 billion.
Other train operating companies (TOCs) are in a similar position and they expect the government and rail passengers to bail them out. Mark Pickersgill reports.

FOR THE first time since rail privatisation, TOCs' revenues are going down because the credit crunch has cut passenger numbers. However, these companies aim to maintain their profit margins and shareholder dividend returns and want huge government bailouts on top of cuts in services, job losses and fare rises.

More than 2,500 jobs have been cut in the past three months. Train company Stagecoach plans to shed 820 posts, Go Ahead group wants to cut 300 jobs and First group intends to cut ticket office staff and reduce ticket office opening times on their First Capital Direct route.

Representatives of National Express, First Group, Stagecoach and Go Ahead met transport minister Geoff Hoon earlier this year. The railways received 5 billion of government money last year and train fares in Britain are on average 50% higher than the rest of Europe, but these companies were pressing to renegotiate their contracts and get more subsidies.

When these contracts were first negotiated 18 months ago, they expected fares revenue to keep on growing (just like house prices), so the government would pay less subsidy to the TOCs while these companies pushed up fares still further.

However, the contracts pegged some fare rises to inflation as measured by the retail price index (RPI), plus 1%. By the end of the year, RPI inflation could be negative, so the TOCs may not be able to raise fares on some routes.

In January the TOCs announced huge fares increases, way above the rate of inflation, for 'peak' and 'off-peak' journeys. These increases are the highest since the railways were privatised 16 years ago.

Train companies are meant to offer discounted saver fares, renamed 'off-peak' fares, but they are exploiting loopholes that allow them to expand the definition of 'peak'. This means for example that East Midlands Trains raised fares by up to 34.5% by extending its restrictions. Virgin trains pulled a similar scam with a standard class return from London to Glasgow now costing 252, up from 102.90.

Costly failure

Problems such as the lack of spare capacity inconvenience passengers during engineering works. Billions of pounds are needed to upgrade the system. New Labour, however, continues with the policy of privatising the public sector and has let big business extract huge profits from the railways. More government money is spent on the rail network now than in the final years of the nationalised British Rail.

Under the present system the TOCs do not own any assets, instead they lease their trains and carriages from three rolling stock companies owned by banking groups HSBC, RBS and Santander. The rolling stock firms charge 1 billion a year to lease their trains, the cost being passed onto taxpayers and passengers by the TOCs.

The government set up a 'competition commission' to investigate these rolling stock companies who enjoy near-monopoly status, and who have been accused of overcharging for use of their trains.

So, having been bailed out by the government once before, some of Britain's biggest banks will again be helped out through more government subsidies to the privatised railways!

Rail privatisation has been a total failure. The government has had to intervene to save Network Rail and then Metronet (the company that maintained part of London Underground). Private enterprise is unwilling to underwrite the huge amounts of capital needed to maintain the infrastructure and invest in improvements.

New Labour has tried to invent new methods of funding, such as PPP (public-private partnerships) on the London Underground but as always it is only the losses that are nationalised.

Nationalisation is the only way to run an efficient, fully integrated transport system. However, it should be run under democratic workers' control and management, where people working in the industry and using its services would have full participation in how it is run.

Why not click here to join the Socialist Party, or click here to donate to the Socialist Party.


In The Socialist 13 May 2009:

Fight all job cuts


Thieving MPs

MPs live it up at our expense !


Socialist Party editorial

Sweep away the thieves and their system


Socialist Party news and analysis

Renationalise the railways

Sri Lanka's killing zone

Corus jobs slaughter - fight the closure

News in brief


Linamar and Visteon

Linamar sack Swansea trade union leader

A victory at Linamar would be a victory for all workers

Visteon workers discuss socialism


Socialist Party election campaign

No2EU - Yes to Democracy campaign news

No to the EU gravy train


Youth fight for jobs

Youth Fight for Jobs Launch conference


International socialist news and analysis

Gaza: the nightmare continues

Imperialism sucked deeper into Afghan quagmire


Socialist Party workplace news

Defending jobs and conditions at the Olympics site

Defending jobs and conditions at Fiddlers Ferry

Wales TUC: For trade union democracy and for trade union rights!

Socialist methods tested

Workplace news in brief

PCS conference: A fighting union that defends its members

NSSN - fight the bosses' offensive

NSSN Conference: Saturday 27 June


Marxist analysis: history

Defeating the poll tax


Education

Save our schools Weston Favell, Northampton

Lewisham Bridge primary school

Threat of academies


 

Home   |   The Socialist 13 May 2009   |   Join the Socialist Party

Subscribe   |   Donate  




Related links:

Fares:

triangleMerseyrail protest

triangleRail: fares up, bosses' pay up - delays and cancellations up

triangleNationalise rail now

triangleWhat we saw

triangleHow the Single Market blocks socialist policies

Rail:

triangleRMT strikes against driver-only operation continue

triangleRMT rail members buoyed by coordinated action

triangleStrike against driver-only operation on five rail networks

triangleBrutal rail privateer Abellio takes over Midlands rail services

Inflation:

triangleAmber warning lights flash on British economy

triangleTories scrap the NHS pay cap: now fight for real-terms pay rises!

triangleBalloting members on the pay cap

Britain:

triangleLecturers strike around country in defence of pensions

triangleCaerphilly & RCT Socialist Party: 100 years of votes for women

Reports and campaigns

Reports and campaigns

23/2/18

UCU

Lecturers strike around country in defence of pensions

21/2/18

Strike

German engineering strike puts shorter week on agenda - but could have won more

21/2/18

Cardiff

Cardiff Refugee Rights gig success

21/2/18

Nottingham

Nottingham hospital black alert

21/2/18

East Midlands

Lively discussion at East Midlands Socialist Party conference

21/2/18

West Midlands

Tremendous determination on show at West Midlands conference

21/2/18

Wales

Successful Socialist Party Wales conference sets tone for the year ahead

21/2/18

Bradford

Bradford protests against kids' service cuts

21/2/18

May Day

May Day, May Day! Celebrate solidarity!

21/2/18

Kirklees

Labour councillors push through savage cuts in Kirklees budget

21/2/18

Salford

Save Salford nurseries!

21/2/18

Caerphilly

Victory: Pontllanfraith leisure centre saved

21/2/18

Council

Northants council crisis - protesters demand an end to cuts and privatisation

21/2/18

Leicester

Leicester Uni makes Tory fee tripler David Willetts chancellor - sack Willetts!

21/2/18

UCU

Bosses divided - university pension strikes can win!

triangleMore Reports and campaigns articles...


Join the Socialist Party
Subscribe to Socialist Party publications
Donate to the Socialist Party
Socialist Party Facebook page
Socialist Party on Twitter
Visit us on Youtube

LATEST POSTS

CONTACT US

Phone our national office on 020 8988 8777

Email: info@socialistparty.org.uk

Locate your nearest Socialist Party branch Text your name and postcode to 07761 818 206

Regional Socialist Party organisers:

Eastern: 0798 202 1969

East Mids: 0773 797 8057

London: 020 8988 8786

North East: 0191 421 6230

North West 07769 611 320

South East: 020 8988 8777

South West: 07759 796 478

Southern: 07833 681910

Wales: 07935 391 947

West Mids: 02476 555 620

Yorkshire: 0114 264 6551

ABOUT US

ARCHIVE

Alphabetical listing


February 2018

January 2018

2017

2016

2015

2014

2013

2012

2011

2010

2009

2008

2007

2006

2005

2004

2003

2002

2001

2000

1999