Commuters' anger over fare hikes

RAIL companies have come under fire for making “bumper” profits while passengers face fare hikes in the New Year.

Sarah Chambers

RAIL companies have come under fire for making “bumper” profits while passengers face fare hikes in the New Year.

Days before another round of fare rises comes into effect across the UK, the Rail Maritime and Transport (RMT) union said leading transport firms were enjoying dividend increases of at least 10%, and as much as 33%.

National Express, which operates train services in East Anglia, is offering an increase in dividends of 10% while its regulated and unregulated fares are set to rise by 6%.

East Anglian rail users called for profits to be ploughed back into services but expressed mixed feelings about the profits boon.

Neil Skinner, chairman of Manningtree Rail Users' Association, said there was “deep resentment” amongst passengers that a percentage of every fare they pay went to shareholders rather than into improving services.

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“Definitely there's an issue there and Government subsidies are at a record high, I believe,” he said. “All profits should be ploughed back into the railway.

“I suspect that there is clearly something wrong with the current system, where taxpayers' money is being used to prop up private companies which are paying dividends.”

It was “galling” that a percentage of the fare increases would end up going into shareholders' pockets, he said.

“You should either have a privatised railway or a public railway, but we have both really,” he added. “I'm not sure how you can subsidise someone while they are making a profit.”

David Bigg, chairman of Witham and Braintree Rail Users' Association, called for investment in services and the creation of a 24-hour service between Norwich and London.

He said excessive profits were “not acceptable” but admitted shareholders were entitled to a return.

A spokesman for National Express said they continue to invest in their service - including a £40m transformation of trains in the fleet, with new high performing engines plus an interior rebuild as well as station improvements.

The Association of Train Operating Companies (Atoc) has also said the increased revenue from the rises in UK fares would help pay for major investment in the railways and deliver better value in line with government policy to reduce subsidy to the railway by 40% between 2006/07 and 2013/14.

The RMT said Arriva, the First Group, Go-Ahead, National Express and Stagecoach increased their operating profits over the past year and all increased dividend payments.

RMT general secretary Bob Crow said: “Passengers being told to fork out huge increases in fares and season tickets for overcrowded services have every reason to ask how the operators can rake off such huge amounts of their money as profits.

“It seems that the rail privateers want everyone else to tighten their belts so that their shareholders can keep their snouts in the trough, yet the Government insists that the set-up delivers value for money.”

A Department for Transport spokesman said: “We want to ensure passengers have confidence in rail fares and that's why we've capped regulated fare rises until 2014 - generally to inflation plus one per cent each year.

“More people are travelling by rail and it's estimated between 1996 and 2014 that 75% of revenue growth on railways will have come from increased passenger demand rather than fares.

“We've also worked closely with operators to simplify ticketing to ensure passengers are sold the best value ticket for their journey.”

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