Rail union RMT today revealed that the Transport Secretary Mark Harper has allowed two private rail companies to be paid £82 million in dividends in 2022.
This is the despite the fact both companies are part of a major industrial dispute where hundreds of millions of pounds has been used to indemnify them against lost revenue from strike action.
FirstRail Holdings Ltd, the holding company for five FirstGroup franchises, and Govia Thameslink Railways, which runs the biggest franchise in Britain, have recently reported dividend payments of £65 million and £16.9 million respectively in their annual accounts for 2022.
Two of First Rail Holdings Ltd’s franchises, Avanti West Coast and Transpennine Express, have been the subject of public and political controversy after cancelling hundreds of services. In spite of this, the government has renewed or extended contracts for Avanti West Coast and may shortly do the same for Transpennine Express.
Govia won a contract to carry on running the Thameslink, Southern and Great Northern franchise from the government in October 2022 despite its sister company LSER being stripped of the Southeastern franchise for concealing public money.
The DfT allowed Go-Ahead Group to conduct its own internal inquiry into the failings at LSER and renewed Govia’s contract for the Thameslink franchise in spite of the fact that the two companies shared many of the same management personnel.
All these franchises have benefited from indemnification worth hundreds of millions of pounds in taxpayers’ money by the DfT to cover the costs of lost passenger revenue during the ongoing dispute.
RMT General Secretary Mick Lynch said: “The DfT is now little more than a representative of big business, geared to turning tax revenue into shareholder dividends.
“If you’re a private train operator, it doesn’t matter whether your problem is unpredictable passenger revenue, costly train leases or industrial action, the Secretary of State is there to help, opening the public purse and emptying it into shareholder’s pockets.
“This system is not operating in the interests of passengers, railway workers or the taxpayer.
“It is clear that only full public ownership of train operation in this country can save our railways from being looted by this gang of unaccountable spivs.”
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