- 10 updates
The franchising system allows privately-owned train operating companied to distribute profits at a low cost from public subsidy, the director of the Centre for Research on Social-Cultural Change (CRESC) said today.
Professor Karel Williams responded to a new report which claimed that rail privatisation in the UK was "failing to deliver".
She said: "The privately-owned train operating companies have hijacked the government's rail reform agenda which is all about 'getting franchising back on track'.
"It would make sense to abolish the train operating companies and it would cost the taxpayer nothing if it were done as the franchises expired."
The Department for Transport has rejected a TUC report, which claimed that privatisation failed to deliver for rail users and taxpayers and had brought in little private sector investment. A spokesman said:
Rail privatisation has failed to deliver for rail users and taxpayers, according to a new TUC commissioned report published today. The report said that privatisation has brought in little private sector investment. The figures show:
- The average age of trains has risen since rail privatisation, from 16 years in 1996 to 18 years old today. Just £1.9bn was spent on rolling stock between 2008 and 2012, compared to £3.2bn between 1989 and 1993.
- Over 90% of new investment in recent years has been financed by Network Rail.
- The UK has the most expensive rail fares in Europe. Long distance, day return and season tickets are all around twice the price of similar tickets in France, Germany, Italy and Spain, which have publicly-run rail systems.
- Average train fares in the UK increased at three times the rate of average wages between 2008 and 2012.
Privatisation has proved to be a bad deal for taxpayers, the general secretary of a train drivers' union said today, after a study found that rail privatisation has led to the UK having the most expensive fares in Europe. Mike Whelan of Aslef said:
TUC policy officer Matt Dykes said that the country was made a "great deal of promises" at the time of rail privatisation.
Speaking to Daybreak he said: "What we're finding is on average, trains are older, there's overcrowding, we're paying the highest the fares in Europe."
He added: "The most important point, I think, is that the whole industry still relies on billions of pounds of taxpayers subsidy, much if which ends up being passed onto the share holders of the train operating companies, rather than being invested into the service."
Edward Welsh from the Association of Train Operating Companies has told Daybreak that the TUC is being "naughty" in claiming that rail privatisation has led to the UK having the most expensive fares in Europe.
He said: "We have a choice of different fairs, it's like airline discounting, you are able to buy cheaper fares if you book in advance or use a rail card and often on the continent you don't have those kind of benefits."
A TUC report - The Great Train Robbery - concludes that rail privatisation has "failed to deliver", with UK passengers paying expensive fares for older trains.
A TUC report found long distance, day return and season rail tickets are around twice the price of similar tickets in France, Germany, Italy and Spain, which have publicly-run rail systems, while average train fares in the UK increased at three times the rate of average wages between 2008 and 2012.
The report dismissed claims that privatisation had helped increase the number of people travelling on the railways, maintaining that passenger growth has mostly been down to rising economic output and changes in employment patterns rather than because of privatisation.
Rail privatisation has led to the UK having the most expensive fares in Europe, older trains and serious overcrowding, and train operating companies entirely reliant on public subsidies, according to a new study.
The TUC said privatisation had failed to deliver for rail users and taxpayers and had brought in little private sector investment.
Its report - 'The Great Train Robbery' - showed that private train companies were heavily dependent on the public purse to enable them to run services, and re-invested little of their profits back into the railways.
Firms receiving the largest state subsidies spent, on average, over 90 percent of their profits on shareholder dividends, according to the study carried out by the Centre for Research on Social-Cultural Change (CRESC) at the University of Manchester.
Train companies made operating profits between 2007 and 2011 of £504 million, most of which was paid to shareholders, said the report.
Meanwhile the average age of trains has risen from 16 years in 1996 to 18 years old today. Just £1.9billion was spent on rolling stock between 2008 and 2012, compared to £3.2 billion between 1989 and 1993.