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Rail fares rise way above pay rises

PASSENGERS will be milked by rail privateers again next year when fares increase by an average of 3.4 per cent, far above what most workers can expect as a pay rise.

Rail Delivery Group (RDG) chief executive Paul Plummer has the job of delivering straight-faced justifications for corporate greed while his fellow privateers count their ill-gotten gains.

He has explained that RDG members, the train-operating companies, face higher costs that “rise directly in line with RPI.”

So do passengers and most are seriously affected by rising costs, unlike the rail privateers, because their salaries, pensions or welfare benefits don’t increase at the same rate.

It is patronising of Plummer to reassure passengers that his members will do all they can to “make the best use” of the money squeezed out of them.

His assertion that 97 per cent of all fare income goes back into improving and running the railway simply confirms that 3 per cent of billions is snaffled by private shareholders for a worse service than would be expected by a publicly owned network.

Transport Secretary Chris Grayling, who can always be relied on to put the privateers’ interest before passengers, staff and taxpayers, is at it again with his bailout of Virgin Trains East Coast.

The franchise is operated jointly by Stagecoach, which announced £158.7 million profits in April and a 4.4 per cent increase in dividend per share up to 11.9p, and Virgin, whose parent company paid out £479m to shareholders last year.

This joint operation pledged to pay the Exchequer £3.3bn to run the East Coast Mainline until 2023, but they are bailing out early, just as National Express did nearly a decade ago and with the same result.

Whatever the price of a franchise, private train operators arrange, with the Transport Secretary’s OK, to soak up profits in the early part of the contract and maximise payments to the government in later years.

When National Express handed back the keys, under the last Labour government, the publicly owned Directly Operated Railways stepped into the breach, providing a superior service for six years and paying the government hundreds of millions of pounds a year instead of trousering similar sums for shareholder dividends.

Grayling, the privateers’ friend, insisted on returning the East Coast Mainline to private-sector “efficiency” and we have seen the result.

Stagecoach and Virgin shareholders can sleep soundly in their beds, knowing that their company has avoided the need to pay the government hundreds of millions, looking after their interests and sod the travelling public.

Neither Stagecoach, Virgin nor the Tory government appear to understand that, under capitalism, entrepreneurs are supposed to back their judgement in the market and reap rewards or salty tears as a result.

Not in Britain. It’s win-win for the Richard Bransons, Brian Souters, Ann Gloags and the rest.

If it all goes well with eye-watering profits, then it's dividends, bonuses and congratulations in the boardroom and, if it all goes pear-shaped, exit stage right and leave it to someone else to clear the mess up.

It took Labour some time to break free from the “private good, public bad” of the Blair-Brown years and to catch up with the demands by rail unions and passengers to renationalise our railways.

Shadow transport secretary Andy McDonald is fully on board with this call. Returning our rail services to public ownership is a demand whose time has arrived.

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