Yesterday’s announcement that the Tory-led coalition government’s much heralded investment in the railways is to be financed solely through fare increases is a catastrophe for passengers.
The long promised electrification of the network, due to start in 2014, will cost at least £9.4 billion and it was admitted by the transport secretary, Justine Greening, that this money will not come from the government nor will it be funded by the privateers who cream off vast profits from the network.
Instead, the money will come from fare increases described as ‘eye-watering’.
From January next year and for the following year, rail fares will increase according to the formula inflation plus 3%. At present the government has already imposed price rises this year of inflation plus 1% as it drives to make passengers pay for the full cost of rail privatisation and ensure the record profits and banker-style bonuses paid out to rail companies and their executives.
In an interview with BBC radio on Monday, Greening came out with a convoluted justification. She said: ‘Affordability is absolutely key because, of course, if people can’t afford to go on the train then that is the last thing we want for an affordable train system.’ She then went on to say: ‘But the money has to come from somewhere so passengers have to pay.’
In fact, as everyone who has used a train in recent memory will know only too well, train fares are already exorbitant and these increases will drive them completely out of the reach of workers and middle class commuters.
At a time when wages are steadily being cut, this dramatic increase in rail fares will push up the cost of commuting to and from work to a level that simply cannot be sustained.
In the same interview, Greening admitted that the real driving force behind these swingeing increases was the cost of compensating loss-making train companies.
Ever since the railways were privatised in the mid 1990s billions of pounds have been pumped in to maintain the profits of the private companies that took over and broke up what had previously been an integrated rail system.
At present, £4 billion a year is handed out in public subsidies, three times more than under the nationalised railways, while the fragmentation of the network – with a multitude of private operators – is costing a further £1.2 billion a year while fares have increased threefold.
With house prices in central cities forcing ordinary working families further and further away from any place of employment, this latest rise will push many families to the absolute brink with almost all of their disposable income swallowed up in rents, mortgages and travel costs.
None of this of course will trouble the train operators who regard the railways as a ‘cash cow’ to be milked for all that it is worth – their profits assured by public subsidy.
With this latest announcement it is clear that the privateers will not even have to use any of their profits to modernise the system which they plunder.
When the Labour shadow transport secretary, Maria Eagle, tentatively put forward the idea that a future Labour government might possibly consider re-nationalising parts of the rail network, she was quickly slapped down by the leadership who insisted the focus of the party towards the rail network would be on ‘local solutions’ whatever that means.
The only way to ensure an affordable public transport system is to nationalise the railways and all public transport and develop an integrated transport system.
This can only be achieved through kicking out the privateers and nationalising the entire industry without compensation and under the control of the working class as part of a planned socialist economy.