THE rail system is costing passengers and taxpayers billions of pounds a year, Labour reveals today, as a protest is staged outside Parliament on the 25th anniversary of privatisation.

The annual government subsidy to private rail companies owned mainly by foreign state operators has risen by 200 per cent over the past 25 years to £5 billion, according to the party.

And an annual £4.1 billion of taxpayers’ cash is being pumped into Network Rail, which maintains the rail infrastructure enabling the privateers to operate.

Passengers have been doubly punished, with some fares, including peak-time single fares from London to Manchester or Exeter, rising by as much as 245 per cent since 1995.

Today, rail union RMT will hold a demonstration to demand renationalisation of the country’s rail services, which were privatised when the 1993 Railway Act was forced through Parliament by John Major’s Tory government.

Labour’s shadow transport secretary Andy McDonald said: “Twenty-five years on, it’s clear that rail privatisation has been a catastrophic failure, with the taxpayer putting in even more money to the privatised system than when it was nationalised.

“Labour will take our railways into public ownership to improve services and cap fares, running them in the interest of passengers, not for private profit.”

RMT general secretary Mick Cash said the railways had become a “global laughing stock.

“We now have the ludicrous situation where the vast majority of our railways are in foreign state ownership, with the profits they are racking up siphoned overseas to subsidise their own domestic rail operations,” he said.

“Meanwhile, the British people are being bled dry, paying the highest fares in Europe to travel on rammed-out, extortionate and unreliable trains.”