On Thursday of this week campaign group We Own It staged an action at King’s Cross station in London. The aim of the action was to draw attention to the costs to the public of subsidising the private companies who operate Britain’s rail services. In this case the operators of the East coast rail franchise Virgin Trains East Coast and Stagecoach have terminated their franchise arrangement early. Critics, such as the We Own It group, point out that this is in effect a bailout. The franchise holders had committed to pay money to the Treasury in the final years of the contract. Now they will not have to.
The whole system of giving rail franchises to the private sector is an example of a desperation to transfer as much public wealth into private hands as possible. This is not the first example of a rail franchise failing. And, surprisingly, given that this is supposed to be all about ‘markets’ we find that in reality private companies are able to reap profits but avoid risk. This then is not in fact a ‘market’ operation at all. It is a kind of reverse socialism – where the public underwrite and subsidise the private sector.
Great that campaign group We Own It are actively campaigning on this matter.
For background here is an interview from some time ago which Cat Hobbs, Director at We Own It, gave on the subject of rail privatisation to Sky News last year.