£8 Billion Taxpayer “Investment” in Railways Reveals Hoax of Tory/Labour “Privatisation”
British taxpayers will be forced to pay out another £8 billion to “invest” in infrastructure for the privately owned rail franchises, even though those companies were originally created with the purpose of “saving taxpayers’ money.”
The railways were first privatised by the John Major government, fulfilling the Thatcher dream of privatising as many state assets as possible in the belief that they could be more efficiently run in private hands and at lessened cost to the taxpayer.
Of course, nothing of the sort has happened.
Instead of becoming “cheaper” to the taxpayers, the cost has increased exponentially as fares have skyrocketed and the level of state subsidies of the rail franchises reached £800 million per year in 2008.
Now, ConDem Transport Secretary Philip Hammond has announced that taxpayers are to stump up an extra £8 billion to buy 2,000 new railcars and to press ahead with construction on the Thameslink program.
However, what Mr Hammond and the controlled media have failed to mention in this news is the fact that these railcars will be provided to private franchise holders (presumably with some sort of long-term, heavily subsidised repayment program).
The question which immediately springs to mind is this: if the state is forced to buy the hardware for the train services which are supposed to be in private hands, then why are they in private hands in the first place?
In 2008, the eight largest railway franchises received more than £800 million in cash subsidies from the taxpayer.
In addition, passengers have been told that rail fares will rise by a minimum of 6.2 percent early next year (and in some cases by 13 percent), bringing total fare rises since privatisation in many areas to well over 200 percent.
The privatised rail franchises have either refused to invest in infrastructure, or have been unable to do so because of their primary duty to pay a return to shareholders and the staggering cost of new hardware.
As a result, the Public Accounts Committee has reported that in the near future there are likely to be 15 percent fewer extra places on London-bound trains during rush hour, compared with earlier targets.
Part of the £8 billion taxpayers’ money will also be used to boost the electrification programme, which has also been put on hold since privatisation. Currently, only 38 percent of Britain’s rail infrastructure is electrified, a figure which lags way behind the largely state-owned European networks.
In fact, privatisation has been such a disaster in the electrification programme that only countries like Albania and Latvia have fewer electrified lines than Britain.
In many respects, both Tory and Labour governments have already had to concede defeat in the privatisation programme.
For example, the railway tracks, previously privatised under the company Railtrack, have already been taken back under state control in the form of Network Rail, a fully government-owned company.
Even the “re-nationalisation” of the railway tracks occurred at huge cost to the taxpayer. In 2001, after making record losses of £534 million, Railtrack approached the government (read the taxpayer) for funding, which was provided — and then used to pay a £137 million dividend to its shareholders in May that year.
The next year, the government “bought” back the railway tracks by buying out Railtrack (which was already in administration) for an additional £500 million. Discounting the “normal” subsidies which were paid annually to Railtrack, just saving the track network from “private efficient hands” cost the taxpayers just short of £1 billion.
The British National Party is all in favour of privatisation where it can be shown that market forces will benefit the consumer.
However, in the case of the railways, practical experience has made it clear that privatisation has led to increased fares, a lack of infrastructure investment and a spiralling burden to the taxpayer — well in excess of what would have been the case had the rail network remained in state hands.
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