One of the problems of 14 years of a Tory Government, that is blatant in its support for rich donors, that has no problems about lying to parliament, that is prepared to write off billions of pounds of debt created by its inefficient and illegal management of Covid procurement, is that you can become inured to anything they choose to throw at you. Indignation and anger are emotions which are experienced most often when trust has been betrayed. Public distrust of this government is at an all time low. Yet they seem to be able to get away with anything.
Initially, then, the press release by the RMT describing how Thameslink Railways had paid out a dividend of £16.9 million in October 2022 to its provider Govia, with permission from the Department for Transport (DfT), seemed like more of the same.
We are angry of course that the £16.9 million pay-out was authorised by the DfT during an industrial dispute in which the companies have had all their costs covered by the same department. As Govia’s annual report states: “Under the management contract … the direct cost and revenue risk of industrial action remain with the DfT”. We cannot help but remember how bitterly fought the dispute has been, requiring ten months of action and enormous sacrifices, before members at Network Rail accepted the below inflation deal. Members employed in companies that are part of the Rail Delivery Group are due to vote on the 9% offer. But Govia was handed their £16.9 million without a murmur. In normal circumstances we would at least assume they were a reputable company that had worked hard for their massive pay-out.
Wrong. Govia was given a National Rail Contract by then Secretary of State, Grant Shapps, in spite of the fact that the same owning group had recently been fined £50 million and stripped of the Southeastern franchise, London South Eastern Railways (LSER), for concealing multiple millions in public money over years to ramp up their dividend payments.
It then goes from bad to worse. Grant Shapps and the DfT allowed Go-Ahead, the major partner in the joint venture with Govia, to conduct their own internal inquiry into LSER’s ‘breaches of good faith’ in financial matters. This was in the full knowledge that the results of the investigation would be used to determine whether Govia would be allowed to keep the Thameslink franchise. Go-Ahead had every incentive to find their wider group innocent, which they duly did, in spite of the fact that LSER and Govia shared many senior directors. At the time the RMT described it as a “sick joke”.
In October the same year, just as the dividend payment was being made, Go Ahead was acquired by a company set up by Australian bus operator, Kinetic and Spanish transport investment fund Globalvia.
The role of the DfT
The DfT has refused to disclose details of applications and approvals for dividend payments. On 20th December last year rail minister, Huw Merriman, said in a written statement to Parliament: “The Department does not publish a list of approved dividend payments or applications under consideration as it considers that publication of this information would prejudice commercial interests.”
The DfT claims that payments are authorised following ‘independent evaluation’ but revealed under questioning that this involved yet more contracts to private companies, including consultancy firms. So, we need to be angry, very angry indeed. We need to ensure that, at a minimum, Labour honours its pledge to renationalise the railways. A well-funded national rail network will allow a more efficient and cheaper form of travel. But just as importantly it will remove some very dirty snouts from this money-making trough.