Issue date
02 Jan 2019
As fares rocket up again today, the TUC publishes analysis showing how privatisation has failed.

The TUC today (Wednesday) reveals that the same private rail companies that are putting fares up by 3.1% today, have paid out over £1 billion in dividends to shareholders in the last six years.

The TUC is concerned that these shareholder pay-outs are excessive given the poor-quality service and high costs that workers face commuting by rail.

TUC analysis finds that UK commuters spend up to five times as much on season tickets as for European equivalents.

Someone on an average salary travelling from Chelmsford to London will have to fork out 13% of their pay for season tickets (£393 a month).

By contrast, comparable commutes would cost a mere 2% of the average salary in France, 3% in Ireland and 4% in Germany and Belgium.

Country

From

To

Monthly season ticket cost

% of average earnings

UK

Chelmsford

London

£393

13%

UK

Manchester

Liverpool

£257

8%

France

Étampes

Paris

£68

2%

Ireland

Drogheda

Dublin

£116

3%

Germany

Eberswalde

Berlin

£120

4%

Belgium

Ghent

Brussels

£150

4%


Wages are set to grow by only 2.5% in 2019, while season tickets will go up by 3.1%. It will be the ninth time in the last ten years that rail fares have risen by more than wages.

TUC General Secretary Frances O’Grady said:

“The most reliable thing about our railways is the cash that goes to private shareholders each year. But with the most expensive fares in Europe, that can’t be right. It’s rewarding failure and taking money away that should be invested in better services.

“It’s time to take the railways back into public hands. Every penny from every fare should go back into the railways. The number one priority should be running a world class railway service, not private profit.”

RMT General Secretary Mick Cash said:

“The British fare-payer has been battered by the toxic combination of gross mismanagement and profiteering by the private companies exploiting Britain's rip-off railways.

“Our passengers have been left paying the highest fares in Europe to travel on rammed-out and unreliable services and that is a national disgrace. The only solution is to sweep this whole racket away and return our railways to public ownership.”

ASLEF General Secretary Mick Whelan said:

“The train companies are telling passengers to pay more for a poorer service and that’s not a great offer, is it? Not for passengers – or for voters at the next election.

“Commuters complain about persistent delays and cancellations, and the consumer group Which? says the privatised train operators are one of this country’s least trusted groups – beaten to bottom place only by second-hand car dealers.

“Wages aren’t keeping pace with inflation and yet the train companies, and their chum the Transport Secretary Chris Grayling, are pushing up prices yet again. What a way to run the railway!

TSSA General Secretary Manuel Cortes said:

“Millions of commuters will be staggered and furious that fares are rising yet again while privateers stuff shareholders pockets with cash.

“This situation is untenable, and the fact is only bringing the railways back into public hands will end the misery for so many each day.

“Britain and the British public deserve so much better than failing Chris Grayling and this useless Tory government.”

Unite national officer for the rail industry Harish Patel said:

“Given last year’s rail timetable chaos, presided over by the hapless transport secretary Chris Grayling, there should be no rail fare increases for hard-pressed travellers in 2019 – fares should have been frozen. The 3.1 per cent rise is an insult.

“As usual, the real ‘winners’ are the greedy shareholders of the privatised rail companies that have gobbled up more than £1bn in ill-gotten dividends in the last six years – money that could have gone towards freezing fares and boosting rail investment.

“Every day the case for the public ownership of the rail industry grows stronger, especially after the woeful performance of 2018.”

Editors note

- Comparison of UK and European season ticket costs

Country

From

To

Distance (miles)

Monthly season ticket 2019

Average monthly earnings

% of monthly earnings

UK

Chelmsford

London

28

£393.19

£3,082

13%

UK

Manchester

Liverpool

31

£256.90

£3,082

8%

Germany

Eberswalde

Berlin

40

£120.61

£3,145

4%

France

Étampes

Paris

35

£67.50

£2,893

2%

Belgium*

Ghent

Brussels

35

£150.31*

£3,434

4%

Ireland

Drogheda

Dublin

29

£116.11

£3,742

3%

* In Belgium, employers typically contribute to the cost of the ticket, which in practice would reduce the price further to under £50.

- Euro figures were converted to pounds at a rate of  0.900039, the mid-market rate on 10 December 2018.

- Average full-time wages taken from the OECD’s 2018 figures and are national averages.

- Projected wage growth for UK 2019 taken from the OBR’s projected wage growth in October 2018: https://obr.uk/efo/economic-fiscal-outlook-october-2018/

- Rail firm shareholder dividends, 2012/13 to 2017/18

Year

£millions

Source

2017/18

184

Reports to Companies House

2016/17

10

Reports to Companies House

2015/16

228

Office of Rail and Road data

2014/15

222

Office of Rail and Road data

2013/14

183

Office of Rail and Road data

2012/13

204

Office of Rail and Road data

Total

1,031

 


- Since 2012/13 private rail companies have paid out £1,031m in dividends to shareholders. Figures are from the Office of Road and Rail, UK Rail Industry Financial Information: http://orr.gov.uk/rail/publications/reports/uk-rail-industry-financial-information and Companies House: https://beta.companieshouse.gov.uk/

- Rail fare and wage rises since 2010

Year

Average wage rise

Rail fare rise

2010

1.5%

8%

2011

1.3%

7.1%

2012

1.1%

4.8%

2013

1.1%

4.2%

2014

1.1%

3.3%

2015

2.5%

2.1%

2016

2.5%

0.3%

2017

2.7%

2.8%

2018

2.6%

3.6%

2019

2.5%

3.1%

Decade to 2019

22.3%

46.8%


- Data on wages is from the Office for Budget Responsibility, and on rail fares from the Office for Road and Rail.

- 2016 is the only year in the last decade when wages rose faster than rail fares.

- About the TUC: The Trades Union Congress (TUC) exists to make the working world a better place for everyone. We bring together more than 5.5 million working people who make up our 49 member unions. We support unions to grow and thrive, and we stand up for everyone who works for a living.