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| Unions attack taxpayer subsidy to private rail operators | |
| (35 minutes later) | |
| Unions and rail campaigners are stepping up demands for an overhaul of the railway system, after new figures showed the state-run east coast line is operating with a just fraction of the subsidy paid to most private train companies. | Unions and rail campaigners are stepping up demands for an overhaul of the railway system, after new figures showed the state-run east coast line is operating with a just fraction of the subsidy paid to most private train companies. |
| The TUC-backed Action for Rail campaign warned that rail franchising was fundamentally unsustainable, with operators receiving subsidies far in excess of the premiums they paid to the Treasury. | The TUC-backed Action for Rail campaign warned that rail franchising was fundamentally unsustainable, with operators receiving subsidies far in excess of the premiums they paid to the Treasury. |
| The TUC carried out an analysis of Department for Transport figures published this week and found the companies paid a total of £1.17bn in premiums to run services in the year to April 2012 but received subsidies totalling £3.88bn – a £2.7bn net payment from the public purse. | The TUC carried out an analysis of Department for Transport figures published this week and found the companies paid a total of £1.17bn in premiums to run services in the year to April 2012 but received subsidies totalling £3.88bn – a £2.7bn net payment from the public purse. |
| The transport secretary, Patrick McLoughlin, is expected to announce on Monday whether Virgin or the state-owned Directly Operated Railways (DOR) will run the west coast mainline after 9 December, when Virgin's contract expires – and on what basis. | The transport secretary, Patrick McLoughlin, is expected to announce on Monday whether Virgin or the state-owned Directly Operated Railways (DOR) will run the west coast mainline after 9 December, when Virgin's contract expires – and on what basis. |
| The award of the west coast franchise to FirstGroup was cancelled after flaws were discovered in the selection process and it is likely to be at least 18 months before a new competition can be concluded. Two current investigations into the west coast fiasco and the wider issues in franchising are due to report later this year. | The award of the west coast franchise to FirstGroup was cancelled after flaws were discovered in the selection process and it is likely to be at least 18 months before a new competition can be concluded. Two current investigations into the west coast fiasco and the wider issues in franchising are due to report later this year. |
| McLoughlin has indicated his strong preference to keep the line in private hands, as DOR already runs East Coast Trains on the other major north-south artery. Virgin is seeking a contract that will keep it in the railway business while future bids play out. | McLoughlin has indicated his strong preference to keep the line in private hands, as DOR already runs East Coast Trains on the other major north-south artery. Virgin is seeking a contract that will keep it in the railway business while future bids play out. |
| However, the TUC said the taxpayer subsidy given to Virgin was seven times higher per passenger mile than that awarded to DOR on the east coast line. Virgin last year received 3.6p per passenger mile, a net £133m, even though the company recorded pretax profits of £41m, of which £29m went to shareholders. East Coast was given a net subsidy of 0.5p per passenger mile. | However, the TUC said the taxpayer subsidy given to Virgin was seven times higher per passenger mile than that awarded to DOR on the east coast line. Virgin last year received 3.6p per passenger mile, a net £133m, even though the company recorded pretax profits of £41m, of which £29m went to shareholders. East Coast was given a net subsidy of 0.5p per passenger mile. |
| Action for Rail is holding protests at Euston in London and other railway stations throughout the country . | |
| Frances O'Grady, the TUC general secretary designate who chairs the campaign group, said: "These figures show the true nature of our privatised railways – a system of corporate welfare where train operators make a play of bidding for contracts knowing that their future revenue is underwritten by the taxpayer. | Frances O'Grady, the TUC general secretary designate who chairs the campaign group, said: "These figures show the true nature of our privatised railways – a system of corporate welfare where train operators make a play of bidding for contracts knowing that their future revenue is underwritten by the taxpayer. |
| "The franchising process is fundamentally flawed and unsustainable. Ministers must learn from the east coast mainline which has shown that public-operated railways can be more efficient and deliver better value for money." | "The franchising process is fundamentally flawed and unsustainable. Ministers must learn from the east coast mainline which has shown that public-operated railways can be more efficient and deliver better value for money." |