The taxpayer is footing the bill for private train companies who then pay out millions of pounds to shareholders, says the TUC in response to today’s (Monday) report by the Office of Rail Regulation (ORR).
The ORR report shows that the government / taxpayer continues to be a net funder of train operating companies to the tune of £3.8bn. Despite receiving billions of pounds in funding, train operating companies paid out £183m in dividends to shareholders.
There are only two companies who give back more to the public coffers than they take in subsidies. One of those is East Coast, which actually made a net contribution of £23m to the UK government in 2013/14 – clearly demonstrating the success of the publicly-owned model for East Coast.
TUC General Secretary Frances O’Grady said:
“The ORR has once again shown that a public service railway will always been dependent on taxpayer support. But the private train operators treat it as a cash cow, gobbling up almost £4bn in public subsidy yet charging the highest rail fares in Europe while paying almost £200m out in dividends to their shareholders.
“The financial performance of East Coast proves to be another embarrassment for the government. This is an operator that takes a fraction of the subsidy of other inter-city operators like First and Virgin, while paying back more to the government than it receives. It makes a mockery of the government’s hasty privatisation, demonstrating their contempt for the interests of the taxpayer and fixation with an out-dated free market ideology that is failing the rest of the rail industry.”