Foreign Owners' UK Rail Windfall

Dear Members, The following article in the Standard shows why the Workers of England Union has campaigned for more government involvement in UK rail. That £90m windfall should have been coming to taxpayers across Britain and instead it is leaving the country. We agree with Aslef when they say that the UK rail system is ‘haemorrhaging money which could otherwise be used to bring down fares or invest in infrastructure’. Regards, Stephen Morris, General Secretary, Workers of England Union.

Foreign Owners in £90m Windfall from UK Rail

Italian state rail operator Trenitalia received the keys to the c2c train franchise earlier, as a Standard investigation showed foreign governments, including the French, German and Dutch states, are pocketing almost £90 million a year in dividends for running UK railways.

Impact on Passengers and Taxpayers

As commuters stump up for new-year price rises that make Britain’s the highest rail fares in Europe, overseas taxpayers are receiving millions in pay-outs from train companies which make their profits from UK passengers.

Major Shareholders and Dividends

Govia, the owner of the “misery line” Southern Rail, as well as London Midlands and Southeastern, took dividends of £65 million from its UK rail operations, according to government figures quietly published last year. Just over a third of those, almost £23 million, went to French investor Keolis, which is majority-owned by state rail firm SNCF.

Abellio, owned by Holland’s state railway operator, pocketed payments of £36 million from running the Greater Anglia and ScotRail franchises between 2014-15, and German state-owned Arriva, whose investments include the London Overground, Chiltern and Cross Country lines, collected almost £31 million of dividends over the same period.

Fenchurch Street’s c2c service to Essex was sold last month by Britain’s National Express to Trenitalia — which today began running the trains after the £72 million sale. The deal means 20 out of 28 privatised rail franchises now have state backers.

Global State Investment and Criticism

State investors from Hong Kong, which has a stake in Crossrail — and, until recently, London Overground — and Qatar, which part-owns Heathrow Express, also have interests in UK rail.

Shadow transport secretary Andy McDonald condemned the “bizarre structure of our system that means the only nation state on the planet that can’t be involved in running British railways is our own.” He added: “Millions of pounds are leaking out of the system to support state-owned railways elsewhere. That money should be available to improve services and cut fares.”

Of Keolis’ stake in Govia, he added: “It is helping to run the worst service in the UK — even before the strikes — yet it wants to take critical people off the trains to make even more profit.”

A spokesman for train union Aslef said: “The system, which palpably isn’t working, is haemorrhaging money which could otherwise be used to bring down fares or invest in infrastructure. When the East Coast was in public hands it returned £1 billion to the Treasury.”