Socialist Party
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1 July 2015

Government reneges on rail modernisation pledge

Mark Pickersgill, Stevenage Socialist Party

Last week transport secretary Patrick Mcloughlin announced that Network Rail's 38.5 billion modernisation plan for Britain's railways has been postponed. This underscores the government's intentions of yet more savage cuts in public spending.

Electrification of the Midland main line north of Bedford towards Sheffield and the Leeds to Manchester line has been put on hold. Prestige projects such as HS2 and Crossrail have been given priority over other necessary improvements to the railways.

Richard Parry-Jones, chairman of Network Rail, who is paid 250,000 a year and works just two days a week, is stepping down.

He is being replaced by Peter Hendy who currently earns 650,000 a year as commissioner of transport at TfL (Transport for London). He also made 4.8 million in a management buy-out of a subsidiary of London buses.

Hendy will be working four days a week as chairman of Network Rail. His salary will be 500,000. These figures also show the huge disparity in salaries between Network Rail and TfL management and their workforces.

Both Network Rail and TfL are funded with public money. Network Rail which runs the tracks and signalling, the most expensive part of the railway system, was created from the privatised group of companies called Railtrack. The Labour government in 2002 was forced to rescue these companies due to their poor record on safety and maintenance. Proof that privatisation of the railways has failed.

The huge infrastructure projects that are required to modernise Britain's Victorian-era based railways are being undertaken with public money.


The private train operating companies (TOCs), such as Virgin and Stagecoach, received over 2 billion in government subsidies last year, money that could've been spent on improvements.

Between 1997 and 2012 Virgin received 2.5 billion of government money to run the west coast line but paid out 500 million in dividends to its shareholders.

The TOCs also received over 140 million in compensation last year from Network Rail for delays and cancellations.

TOCs pass on any shortfall in government subsidies to passengers. Walk-on rail fares for instance have increased on average 240% since the railways were privatised back in 1993.

The privatised railway system costs the government twice as much than it did under the nationalised British Rail, but both Tory and Labour governments have insisted that the railways stay privatised.

But private enterprise is unwilling to take on the huge capital outlay that is required to operate the railway system.

The Socialist Party fights for a nationalised, fully integrated public transport system, run under democratic workers' control and management, to benefit people, and not for profit.