Government to confront unions over rail operating costs

Government demands for huge cuts likely to spark protests.

Travel Insurance News - 16/05/2011

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Britain’s rail unions are unlikely to be pleased by impending demands from the government that they help implement a radical reduction in the cost of operating the nation’s railways. Philip Hammond, the Transport secretary, is expected to trigger a confrontation with the unions when he demands massive reductions in wage bills at UK railways.

Mr Hammond is expected to go to the unions with information from an official study that suggests it costs 40-per-cent more to operate British railways than equivalent services in Europe. The recent report says railways in Germany, the Netherlands and France are run much more cheaply.

The report was produced by Sir Roy McNulty, former head of the Civil Aviation Authority. The report aims to cut the cost or carrying rail passengers by almost a third by 2019. The report finds that the UK could, by 2020, save more than a billion pounds every year.

The study, which will be published in a few days, was commissioned late in the Gordon Brown government. Ministers are expected to use the report to attack both labour unions and ‘expensive’ perks traditionally enjoyed by railway staff.

Last year, train drivers were paid, on average, £41,179. This makes them better-paid than the nation’s firemen, police officers, nurses and teachers. The Office for National Statistics says pay increases at unions exceeded inflation in five of the last seven years.

Mr Hammond recently stated that a key component of his cost-cutting programme would be to address what he called ‘excessive wage demands’ and ‘inefficient working practices’. A union spokesman insisted the cost differential between British railways and its continental counterparts was a reflection of the cost of privatisation and only real the solution was renationalisation.

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