RMT boss Mick Lynch: ‘Lower fares and run the railways in the interests of the people, the economy and the environment’

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The RMT general secretary told MPs that train companies have no incentive to resolve the ongoing dispute as their profits are subsidised by government regardless

A rail union leader has called for fundamental changes to the railways, including lower fares and an end to the privatisation model, which gives private firms a “one way ticket to profit” without any risk.

Addressing MPs on the Transport Select Committee this morning, Mick Lynch said RMT members are fully committed to the strike action in defence of their working conditions and a pay offer.

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The lead negotiator for Network Rail told MPs during the session that there has been a “slight change” in the tone of negotiations in the last week and he is “continually hopeful” that a deal will be reached.

Lynch also said that strike action has no financil impact on the Train Opertating Companies (TOCs) as their agreements with government mean they receive a standard fee regardless of train revenues or performance, meaning the government pays out around £30m to TOCs for every strike day, according to RMT estimates.

We need a railway that runs in the interest of the people’

The head of the largest rail union appeared at a select committee hearing this morning to discuss the ongoing national rail dispute which has led to widespread disruption across the network in recent months.

Lynch, who has previously called for workers to receive a real-terms pay rise and gaurantees of job security, told MPs that he is not against change or modernisation on the railways.

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In order to make the railways viable in the long term, he argued, the system should move away from the privatised franchise model, which he described as “corrupt”.

“What we need is lower fares. We need an incentive for people to get out of their cars and onto the railway, they won’t do that with the current fare structure,” he said.

Rail unions have previously argued that it is unfair on both commuters and workers that fares rise annually beyond inflation, but wages do not.

Lynch said the changes proposed by the TOCs are not what is needed to improve the system.

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He said: “We need a railway that runs in the interest of the people and the economy and the environment, not in the interest of First Group and others who are subject to private equity takeovers because they’re so attractive.”

He accused the TOCs of wishing to “strip out wages and conditions,” in order to make increased profits, because their revenues are now fixed.

Prior to the pandemic, most TOCs worked on a franchise model which saw companies pay the Department for Transport to run services and then collect revenue directly from the railways.

However, since the pandemic this has changed, with companies now receiving a set fee to cover the costs of running the services plus an additional amount based on their performance.

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Rail unions have argued that this could mean that companies have less incentive to resolve disputes quickly, as they suffer no loss of profit from lower revenues resulting from strike action.

Strikes cost taxpayer £30m per day, but train companies nothing

Under the current system, Lynch said the TOCs have, “a one-way ticket to profit” which means that “even if they score 0 on customer satisfaction and are unable to run trains at all,” they will still make profit and be subsidised by the government.

Lynch said the government is subsidising each strike day by approximately £30m.

He said: “The taxpayer has to pay those companies so there’s no incentive for the companies. They’ve got no capital at risk, they suffer no loss. Instead the Treasury and the DFT pays them to conduct this aggressive action against our members, to cut their jobs, freeze their pay and rip up their terms and conditions.

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He added: “A greater scandal is how much money the government is transferring to these private companies in lieu of the revenue that’s being lost.”

Asked how much members have lost in total each as a result of strike action so far, Lynch said the amount would vary significantly based on rates of pay and how many of the strike days they had been scheduled to work. “It will be a lot of money if they’ve been hit by the dates that are on,” he said.

RMT workers involved in the rail dispute do not receive strike pay, as is the case in some industrial disputes.

“What we do know is that our members are fully committed to the action, because they don’t want their conditions ripped up that we’ve negotiated with these companies and their predecessors,” Lynch said, “and you can only get a pay rise if you’ve got a job - and they are proposing thousands of redundancies.”

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