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Rail Union Accuses Government of Lying Over East Coast Rail Privatisation

east coast train

1:09pm 15th May 2013

Rail union the RMT has accused the government of lying over its plans to re-privatise of the East Coast Mainline.

The union claims it will cost the taxpayers hundreds of millions of pounds in lost revenue payments.

Rail Minister Simon Burns was accused by the union of misleading Parliament about the performance of the East Coast Mainline, which is currently owned by the government.

The Minister told the Transport Select Committee on 24th April that the West Coast Mainline operated by Virgin pays more in premium payments than the publicly owned East Coast Mainline. The Minister then repeated that the following day at Transport Questions.

The RMT states Parliamentary answers and official figures recorded by the Office of Rail Regulation show that,

· Publicly owned East Coast Mainline through Directly Operated Railways has paid the taxpayer significantly higher premium payments than Richard Branson’s Virgin on the West Coast Mainline. Publicly owned East Coast paid the Treasury £411 million between 2009 and 2012 whilst Virgin’s West Coast paid £282 million during the same period. A difference of £129m.

· Publicly owned East Coast through Directly Operated railways also paid almost twice as more (£602m) than its predecessor National Express (£370m) over a four year period.

· New RMT research also shows that Virgin and Stagecoach have paid almost half a billion pounds in dividends to its shareholders while operating the West Coast Line. This could have instead been used to finance an average year on year fare cut of 7 % to help hard pressed passengers if the service had been publicly owned.

RMT General Secretary Bob Crow said:

“The truth is now out, this government is prepared to lie through its back teeth in a desperate bid to privatise the East Coast Mainline even though they are well aware that the whole reckless gamble will cost the British public hundreds of millions of pounds in lost income.

“RMT’s research shows that the lost money will go straight into the back pockets of whatever bunch of chancers are given the chance to plunder the East Coast after the previous two private collapses left the public sector to pick up the pieces. RMT will continue to fight not only to keep the East Coast in public ownership but to renationalise the entire network, ending the great rail rip-off once and for all.”

But Transport Minister Simon Burns has responded saying:

“During the last three years the Treasury has received £411M and £450M from the East Coast and West Coast rail franchises respectively. This is completely separate from the money the DfT paid to Virgin Rail as part of their franchise agreement so the statement I made is factually accurate. The bottom line is that the plans we have set out are what will drive improvements to rail services and put passengers at the heart of a revitalised rail franchising system.”

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