Report showing trains in Europe cost 40% less to run will fuel attack on pay and outdated travel perks
Transport secretary Philip Hammond will spark a confrontation with unions this week by demanding steep cuts in the wage bills of Britain's railways, citing an official study suggesting that they cost 40% more to operate than equivalent systems in France, Germany and the Netherlands.
The report, by former Civil Aviation Authority chief Sir Roy McNulty, will set an "aspiration" of reducing the cost of transporting passengers by 30% by 2019, with potential savings of more than £1bn annually by the end of the decade.
Commissioned in the latter days of Gordon Brown's government, the study, to be published on Thursday, is likely to be used by ministers to attack both unions and the historical perks enjoyed by rail staff. Train drivers earned an average of £41,179 last year, more than police officers, teachers, firemen and nurses, and unions have enjoyed above-inflation pay rises in five of the past seven years, says the Office for National Statistics.
At an industry conference last week, Hammond declared that addressing "inefficient working practices and excessive wage demands" would form a "key part" of his cost-cutting strategy. A government source said: "If we're going to make the railways cheaper, everybody needs to work together, from the boardroom down to the platform."
Among examples of alleged profligacy identified in the industry are travel perks still enjoyed by 500,000 former British Rail employees dating back before privatisation in the mid-1990s. Former BR staff are allowed up to 10 "occasions of free travel" a year, with some former senior managers and their families receiving unlimited free transport – even, in some cases, in first-class carriages.
Alleged irregular practices in the industry include lengthy paid-time allowances for staff to walk between buildings and shift patterns that do not fit timetables. Unions are also accused of demanding up to 20 weeks' training for the operation of new types of trains.
But the cost crackdown is likely to be vigorously resisted by unions including the Rail, Maritime and Transport union – led by the hardline Bob Crow, who recently threatened six days of walkouts on the London Underground in protest at the sacking of two members.
An RMT spokesman blamed privatisation for the gap between British and continental rail costs: "Yes, our railways are 30% to 35% more expensive than those in France and Germany but there's a very simple reason – privatisation. This is the cost of fragmenting and breaking up the railways, then running them for private profit and private greed. The solution isn't to increase fares, sack staff and close ticket offices. It's to renationalise the railways."
Rail industry sources say that short franchises of just five or six years granted to train operating companies have discouraged privatised operators from battling unions; even a short strike could wipe out their profits for the franchise term. Hammond intends to extend these contracts to up to 15 years.
"If you only have a rail franchise for six years, there's no way you're going to take on Bob Crow," said one industry source.
Daniel Boffey, Toby Helm 15 May, 2011
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Source: http://www.guardian.co.uk/politics/2011/may/14/philip-hammond-rail-unions-transport
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