Train leasing – now government condemns ‘excess profits’

28 June 2006

The government has demanded an enquiry into the ‘excess profits’ taken out of the industry by the UK’s three owners of rolling stock (Roscos). The Department for Transport believes their charges are ‘uncompetitive’ and has referred the matter to the Office of Rail Regulation to set up an enquiry.


The three firms that own the UK’s rolling stock (Roscos, as they are called) are, in order of size, Angel Trains (owned by the Royal Bank of Scotland), HSBC Rail (unsurprisingly owned by HSBC) and Porterbrook, which is owned by the Abbey Group.


The individual train operating companies hire about 12,500 trains and carriages from the Roscos – paying some £1bn a year for the privilege.


The government has now asked the Office of Rail Regulation (ORR) to consider ‘a further referral to the Competition Commission for a market investigation’. Their basic complaint is that the Roscos are acting ‘uncompetitively’. It says that it suspects excessive charges ‘are the result of a deficiency in the market created by privatisation’.


Reacting to the news, ASLEF’s National Organiser Andy Reed asked, ‘How long will the government continue to tinker at the edges of these problems – which are all the result of privatisation? You don’t need to be a financial wizard to realise that private firms make excess profits. That is why, and how, they exist!


‘The primary move to sell our railways was because the government deemed them uncompetitive – but today’s news shows that privatisation of an industry like rail doesn’t bring competition, it just introduces private monopolies. That’s what capitalism is about.


‘Not a day goes by without more proof that the sale of rail was an utter nonsense. We know it, the hard-pressed rail passengers know it, the voters know it – and today even the free marketeers have joined in!’

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