Public ownership calls as rail fares set to rise 25 per cent since 2010

New public ownership calls as rail fares set to rise 25 per cent since 2010

Rail fares for season tickets and other regulated fares are set to go up by 3.6% on average from January 2015, the TUC and rail unions warn today (Tuesday 19 August) as the Action for Rail campaign protests against rail fare rises and calls for public ownership of our railways at train stations across the country.

Next year’s wage-busting fare hikes will mean that rail fares will have increased by 24.9 per cent over the current parliament (2010 to 2015), and have risen faster than wages in every year. Over the same period, average earnings have increased by just 10.7 per cent, meaning rail fares have risen more than twice as fast as wages under the current government.

New official figures out this morning are forecast to show that RPI inflation rose by 2.6 per cent in July. Regulated rail fares – which include season tickets – are allowed to rise by July’s RPI figure plus one per cent, and would therefore increase by 3.6 per cent in January 2015.

Additional flexibility means that some regulated fares could even increase by up to 5.6 per cent (RPI plus three per cent). This means that some annual season tickets costing more than £4,000 could increase by more than £200 from 2014 to 2015.

The TUC believes that passengers are being short-changed by wage-busting rail fare rises. Passenger Focus surveys show that only 45 per cent of rail passengers believe that the services they use provides value for money.

In 2012/13 train operating companies collectively received £1.3bn in direct subsidies through franchise receipts and a further £3.9bn in indirect subsidy through investment in Network Rail services. In return, train operating companies paid back just £1.2bn in franchise payments to the government, but they took £172m in profits and paid out £204m in dividends to shareholders.

By contrast, the East Coast Main Line has shown the benefits of a publicly-owned railway by returning over £1bn to the taxpayer in the last five years – all of which will be re-invested in the service, instead of going into the pockets of company shareholders. If all the train operators were publicly owned, more money could be retained for higher investment in safety and better trains, as well as lower ticket prices. But despite the evidence, the government is pressing ahead with re-privatising the East Coast Main Line, even though two private companies previously failed to deliver.

Public ownership of the railways has widespread public support. A YouGov Poll in November 2013 found that 66 per cent of those surveyed were in favour of returning the railways to public ownership.

North West TUC Regional Secretary Lynn Collins said: “It’s grim news for commuters that they face yet another year of fare hikes above inflation, while their wages keep dragging behind inflation. The cost to passengers of the failed privatisation of our railways keeps growing year on year. We’ve ended up with slower trains and higher fares than countries who have kept their trains in public hands. It’s time to stop private companies profiteering from our railways and to make sure that passengers and taxpayers’ money is reinvested to improve our services. The only way to do this is to bring our railways back under public ownership.”

Mick Whelan, General Secretary of ASLEF, the train drivers’ union, said: “Privatisation of the railways – a wheeze by John Major which even Margaret Thatcher, the arch advocate of privatisation, described as ‘a privatisation too far’ – has left us with a fragmented system which is all about making a private profit at public expense. We believe in a much better business model for a modern, 21st Century railway in Britain. We believe the railway is a public service which should be publicly-owned, publicly-accountable, and publicly-run.”

Mick Cash, RMT Acting General Secretary, said: “Not only are passengers being lined up for an inflation-busting increase in their fares but we now have the scandal of the government colluding with Northern Rail to abolish off-peak tickets solely in the name of increasing profits.

“You can bet your life that other train companies will seize on the move by Northern Rail to abolish off-peak fares, clobbering the travelling public with a double-whammy that will hit them hard in the pocket while the train companies are laughing all the way to the bank.”

Tony Murphy, Unite National Officer, said: “Twenty-one years of privatised rail has failed Britain’s travellers at every level. Soaring rail fares and overcrowding has been the price of privatisation for commuters. But while the public suffers, taxpayer subsidies have helped many private companies cream off very big profits. Until the railways are brought back into public ownership private companies will continue to milk the paying public for all it’s worth.”