The great rail rip-off

There's no better balm to sooth the new year blues than a good old public transport fare rise.

It doesn't matter how good a year you've just had it's a guarantee that no sooner have you hauled yourself up on the first working day that your wallet will be rinsed even further by a huge increase in your bus or train ticket - and the latter has been particularly under the spotlight this week.

The government transport committee's latest report allegedly sets out a vision for Britain's railways by 2020.

But, as RMT general secretary Bob Crow pointed out, that vision does not include the possibility of bringing the railways back into public ownership despite all the evidence that John Major's decision to privatise the system in 1993 has been a disaster.

All the MPs on the committee offered were vague recommendations, including that the government rule out possible plans to increase fares for those travelling in peak hours.

Reducing the cost of railways to taxpayers must not be achieved by "ramping up fares," the committee's chairwoman Louise Ellman said.

She acknowledged that there needs to be "more transparency" in how public money was spent on the railways "so that there is confidence [that] it does not leak out of the system in the form of unjustified profits."

But it seemed she was ignoring the elephant in the room. Within the committee's own document is an embarrassing chart (a version of which appears below), detailing the money pit that privatised rail has become.

The document admits that public money poured into the service has almost doubled from the late '80s under British Rail at £2.75 billion, in today's prices, to around £4bn today.

The amount of public money thrown at the service increased to a staggering £7.48bn in 2006-7, raising the question that these "unjustified profits" Ellman speaks of may hold more truth than conjecture.

The document also reveals that despite growing passenger numbers, there has been no decrease in the public subsidy as might have been expected, which unions say is the result of privatisation and the cost of servicing Network Rail's debt.

Bob Crow told the Morning Star: "These figures reinforce the sheer scale of the government-sponsored rip-off that is rail privatisation.

"MPs of all parties should hang their heads in shame that this blatant robbery of public funds has been allowed to happen on their watch."

The real scandal is that under the "great British rail robbery" it is the lowest-paid workers who are hardest hit by fare rises, many of whom have to travel at peak time or face losing their jobs.

But where does the money from these exorbitant fares end up? Let's take a look at some of the main players.

First Group

Transport company FirstGroup runs five British rail companies - First Capital Connect, Great Western, Hull Trains, TransPennine Express and ScotRail.

In the year ending March 2012, FirstGroup made an operating profit of £110.5 million on its British rail business, with its revenue being £2.5 billion.

Chief executive Tim O'Toole's basic salary for 2012 was £846,000, plus a £134,000 pension allowance and £75,000 for what was described as "benefits in kind."

FirstGroup's commercial director Sidney Barrie, who resigned last March, was on a salary of £349,000, while finance director Jeff Carr, who resigned in November 2011, had been on £280,000.

National Express

National Express runs the London to Tilbury and Southend rail line c2c and until last February it also operated the East Anglia franchise.

For the year 2011, National Express's revenue from its British rail operations was £688.3m, while operating profit was £43.4m.

Chief executive Dean Finch is on an annual salary of £550,000 and it was announced in August last year that he had been awarded an extra performance-based bonus consisting of thousands of free shares.

National Express group finance director Jez Maiden is on £420,000 a year, with outgoing chairman John Devaney on £225,000.

Go-Ahead

Another rail industry parent company is the Go-Ahead Group. This firm, with French company Keolis, owns rail operator Govia which runs the London Midland, Southern, Southeastern and Gatwick Express train companies.

London Midland has been plagued by staff shortage problems recently and last month the government announced the company would be offering a £7m compensation package including free travel days for season ticket holders.

In the 12 months ending June 2012, Go-Ahead's rail operation revenue was £1.73bn and its operating profit was £40m.

Group chief executive David Brown was on a salary of £510,000, with finance director Keith Down on £326,000.

Serco

Private giant Serco, along with Dutch-led international company Abellio, runs two rail franchises - Merseyrail and Northern Rail.

Latest figures show Serco's chief executive Christopher Hyman on a salary of £721,000 as part of a total package, including bonuses and allowances of just under £1.92bn.

Serco's finance director Andrew Jenner's annual salary is £423,375 and his total package is worth just under £1.09bn.

Stagecoach

Another huge transport company, Stagecoach, has a 49 per cent stake in Virgin Rail which runs the West Coast main line.

In the 12 months ending in April 2012, Stagecoach chief executive Sir Brian Souter was on a salary of £581,000, while finance director Martin Griffiths was on £394,000.

Sir Brian becomes chairman in May with Griffiths taking over as chief executive.

Stagecoach's 2011-12 revenue from its British rail operation was £1.14bn and its operating profit was £27.1m.