New report proves rail privatisation has led to UK passengers subsiding European Railways by over £100m

21 November 2014

A new report has shown that rail privatisation has led to rail fares in the UK being invested European rail networks, helping to keep fares down in France, Germany and the Netherlands.

Increasingly over the last decade, European state owned rail companies have seen the benefits of taking over UK franchises. In doing so they have managed to take £102m of dividends from the UK network in the last two year. Because they are state owned railway companies, this money is used to invest in their railways at home, improving services and keeping fares down.

General Secretary Mick Whelan commented, “This month we have had a Tory Government complaining about the UK having to hand cash over and subsidise the rest of Europe. Yet when it comes to the railways, they support a system that does just that. The Germans, French and Dutch are able to see that public ownership of railways is the best way to run a network. When they can make money from our privatised network to help their own, why wouldn’t they?”

The report by The Independent shows that 20 of our franchises are run by state owned foreign firms, whilst the Railway Act means it is illegal for publically owned British firms to bid for franchises. East Coast is currently the only UK government owned franchise and has returned £1billion to the Department for Transport. Despite this it is in the process of being sold off again with the French government owed company Keolis, potentially running the service in a joint bid.

Mick added, “Our fares are the highest in Europe. This report demonstrates two of the main reasons. Firstly money is leaving the UK network meaning more has to be raised through fares, rather than profits being reinvested to allow train tickets to be kept at reasonable prices. Secondly, the rest of Europe is able to reduce their fares by pumping revenue from our network into theirs! If this doesn’t demonstrate the folly of rail privatisation, I don’t know what does.”

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