UK rail growth would not have been possible without privatisation, says RDG

Industry body the Rail Delivery Group (RDG) has said the railway’s “phenomenal financial turnaround” and significant passenger growth would not have happened without privatisation.

RDG was responding to reports that new Labour leader Jeremy Corbyn would seek to gradually bring rail services under public control if his party was to win the next General Election.

Corbyn, who is expected to outline his proposals this week, described the creation of a “People’s Railway”.

An RDG spokesman said: “When rail franchising was introduced the railway ran at a £2 billion a year loss in terms of its day to day costs but today, it virtually covers its running expenses.

“This phenomenal financial turnaround has happened because journeys have grown faster here than on many other European railways, resulting in almost six times more money being paid back by train operators to government for rail investment.”

In its defence of privatisation, RDG also addressed a couple of the main arguments being made for a public sector railway, in particular Directly Operated Railways paying £1 billion back to the treasury in premiums during the six years it ran services on the East Coast Main Line.

RDG highlighted the £3 billion due to be generated by the current Stagecoach/Virgin joint venture during its eight-year franchise term.

The spokesman added: “The rail network is vitally important to every household in the country.

“While other countries have invested heavily in their railways, none has come close to matching the success of ours because they don’t benefit from the winning combination of private sector competition and government funding.”