UK subsidises overseas rail passengers

06 September 2012

Labour’s Maria Eagle has taken up the union’s argument that UK rail is taking money from UK passengers to subsidise overseas rail companies.

She gave MPs telling examples yesterday of how rising UK fares subsidise cheaper fares on state-owned railways in other EU member states. Maria pointed out that

  • the Chiltern and CrossCountry rail services are run by subsidiaries of Deutsche Bahn, the German state railway
  • Southeastern, London Midland, TransPennine, Southern, are all run in partnership with subsidiaries of SNCF, the French state railway; and
  • Greater Anglia and Northern Rail are run by a subsidiary of Ned Rail, the Dutch state railway.

Maria added, ‘The ability of so-called private train companies to hike rail fares doesn't just mean additional profits, as the National Audit Office has warned, but it means additional dividends from those profits going back to the state railways of France, Germany and of the Netherlands.

‘The consequence - fares that are on average a third lower on their domestic rail networks than on our own.’

The newest Transport Secretary Patrick McLoughlin insisted that fare increases are necessary to pay for upgrades on the railways and said above inflation fares would be achieved by ‘a relentless focus on efficiency’.

‘The minister clearly has little grasp of railway finances,’ Mick said. ‘There is a major problem with franchising that cannot be fixed by tinkering with the current system.’

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