Paying Dividends

08 October 2013

Mick Whelan has welcomed news that the East Coast Main Line, the only publicly-owned and state-operated train service in the national rail network, paid more than £200 million in dividends and premiums to the taxpayer in the year 2012-13.

Mick said: ‘These latest figures show why we need to keep the East Coast in the public sector. The East Coast is delivering, on time, and time and time again, for passengers, for the people who work for it, and for the public purse.

‘The East Coast delivers a better deal to the taxpayer than any other railway line. It’s a key tool against which we can measure the success or failure of the privatised train operating companies. Because each year these companies are pushing up prices for passengers and moving hundreds of millions of pounds in dividends to shareholders, often offshore, money which could and should be used to hold down fares and provide vital investment in Britain’s railway network.’

Industry sources predict that Directly Operated Railways, the Department for Transport’s arms-length company, will return around £1 billion in total to the government over the five years it expects to run the service. DOR stepped in after National Express handed back the keys two years into a seven year franchise it won in 2007.

Action for Rail, a campaign organised by the rail unions, is urging the government to keep the line in public hands. The Labour Party has criticised the coalition for prioritising the ‘unnecessary’ privatisation of the East Coast in the redrawn rail franchising timetable.

An invitation to tender will be issued in February 2014. The contract is due to be awarded in October next year for a handover in February 2015, just ahead of the next general election. Any delay would give a potential Labour government the opportunity to keep the line in public hands.

Mick added: ‘It’s shameful that a government that fears it will lose the next election is tripping over itself in its rush to reprivatise a successful public service. Passengers, staff, and the taxpayer are all set to lose out.

‘At the moment the East Coast belongs to all of us – owned by the government on behalf of all tax payers. At the moment every pound made by East Coast is returned to us. Keeping the East Coast in public hands will ensure that money from fares continues to be reinvested to improve the service.’

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