THE announcement this week that the coalition government has sanctioned an inflation busting 4.1% increase in rail fares across England has thrown the spotlight once again on the privatisation of the public services, described by one privateer as a ‘licence to print money’ solely for the use of the private shareholders and bankers, who are grabbing billions at the expense of workers and the middle class.
The railways are an important lesson in what privatisation really means, because the facts and figures concerning taxpayer subsidies that provide the vast profits for the private rail companies are accessible to the dedicated researcher.
These facts blow out of the water all the lies spread by the companies and the government that rail privatisation, carried out by the Tory government in 1993, has resulted in competition that has ‘improved’ rail services and represents ‘good value’ for commuters.
A study carried out earlier this year by academics at Manchester University’s Centre for Research on Socio-Cultural Change (Cresc) shows that the hand-outs that the rail companies got from the government, both open and hidden, were completely responsible for the huge profits made by these companies.
If you take Branson’s Virgin Rail, which runs the west coast rail franchise, as an example the Cresc report found that between 1997 and 2012 about £2.7 billion had been handed over in direct government subsidies to the company.
In addition, they received £9 billion for upgrading the service while their much vaunted new rolling stock of trains was almost entirely paid for out of government subsidies.
Virgin Rail shareholders pocketed £500 million in dividends courtesy of taxpayers.
These ‘open’ subsidies are complemented by others that are not so widely known.
The report reveals that the fees charged by Network Rail to the rail companies for track access have been cut from £3 billion to just over £1.5 billion – another subsidy going to line the pockets of the privateers.
Again, using Virgin Rail as just one example, the report estimates that without this subsidy the company would actually have made a loss of £257 million last year.
On top of all this free money, being showered on them by the government, these privateers are now demanding massive fare increases that will drive the living standards of workers who rely on rail transport even further down the road of poverty, as they struggle to survive on wage packets that have been frozen or even cut.
The response of the TUC to both the report and the announced rail fare increases has been to call demonstrations yesterday at 50 rail stations across England as part of its ‘Action for Rail’ campaign with TUC general secretary, Frances O’Grady, calling for the coalition government to ‘put evidence before ideology’ and look at re-nationalising the rail industry.
This is not just inadequate it is downright dangerous in proposing that it is possible to ‘persuade’ the Tories and their LibDem partners to renationalise anything.
Capitalism is demanding that everything from rail, the NHS, Royal Mail and all other services be sold off for the profit of the bankers and speculators.
Those parts that cannot produce a profit for these parasites will simply be closed down, whether they be hospitals, railway lines or postal deliveries.
As for the Labour Party leadership they are in total agreement, with Miliband’s rejection of re-nationalisation and merely calling for a cap on fare increases.
The only way that any public service can be defended today is not through useless appeals by the TUC, but by the working class forcing the TUC to immediately take action to stop all privatisations by calling a general strike to bring down this government and replace it with a workers government.
This will re-nationalise every service that has been privatised, without compensation, and under workers management as part of a planned socialist economy.
