Yahoo Finance Train operators hit back at RMT assault on “fat cat rail bosses”
Train operators have hit back at Mick Lynch's assault on "fat cat rail bosses", saying that profits are little more than a third of the £500 million claimed by the head of the striking rail union.
Bosses claim that union figures were not based on reality. They cited figures prepared by the regulator that showed that average annual profits shared among 20 operators over the last six years are £188 million - and as low as £22 million in the year to March 2020.
The intervention came after three days of strike action that paralysed the entire transport network. The RMT will now decide whether to call more strikes after talks with rail chiefs broke down. Although the government is poised for more action, it is reassured by the fact that the damage to the economy is less acute than in previous strikes.
Writing in The Telegraph, Grant Shapps said that rail strikes no longer have the power to paralyse the nation because people are increasingly able to work from home.
“The days when rail strikes could bring the country to a halt are gone,” he said. “For millions more people, rail is now a choice, not a necessity. Anything that stops people choosing rail threatens the future of the network and the jobs of those on it. So why is the RMT taking this incredible risk?”
Last night the RMT stood by its allegation of “profiteering” by train operators and other private sector firms. They insisted that any claims to the contrary “lacked credibility”.
Mr Lynch, Rail, Maritime and Transport workers union (RMT) general secretary, said earlier this month: "Rail companies are making at least £500 million a year in profits, whilst fat cat rail bosses have been paid millions during the Covid-19 pandemic.”
Nevertheless, figures published by regulator The Office of Rail and Road (ORR) tell a different story.
In the most recently published financial year, the year to March 2021, Britain’s 20 train operators made £75 million profit after tax between them. In the year to March 2020, they made just £22 million among them, the ORR found.
During the last six years, aggregate profit after tax averaged £188m peaked at £310m in the year to March 2016.
A spokesman for the Rail Delivery Group said: "The RMT figure of train operator profits isn’t accurate and is based on projections, rather than reality.
“Staff costs for train operators went from £3.1 billion in 2017-18 to £3.6billion in 2019-20, an increase of 16pc. This is partly due to an increase in staff, but also reflects pay increases in that period, despite the RMT claims that staff haven’t had any pay rises.”
A spokesman for the RMT said: "RMT stands 100pc behind our figures which refer to profiteering among the train operating companies, rolling stock companies and sub-contractors in the industry.
"The RDG’s claims lack any credibility as they’re based on data that doesn’t even refer to profits. In fact, our latest research, based on just the train operating companies’ own statutory accounts, shows that their profits were even greater than we’d thought and increased sharply in 2020-21 to almost £600 million, not including the other parts of the industry.
"The truth is that the government didn’t step in to save the railways, it stepped in to save the profits of these parasitical companies."
Accusations of profiteering are being levelled against employers with increasing frequency. Dave Ward, general secretary of the Communication Workers Union, yesterday accused BT and Royal Mail of making large profits and dividend payments without fairly compensating workers. As many as 115,000 postal workers at Royal Mail and another 45,000 front line staff at BT are also preparing to strike.
“What’s making workers more angry is that the CEO of BT, his pay has gone up by 32 per cent in the last year,” he told Sky News on Sunday. ‘At Royal Mail, the CEO has just received a bonus of 140,000.’
Postal workers will be balloted on Tuesday and days later the CWU will announce the result of the BT ballot.
Although greater homeworking has helped to soften the impact of rail strikes, a nationwide strike at BT could cause problems for people working remotely. Insiders at BT said there would be“clear disruption” to services, with some engineers unable to install phone lines or repair faulty services. Customers may also struggle to reach support staff on the phone."
