LONDON — A breakthrough in the long-running series of British rail engineer strikes was announced in mid-August, when talks led by the new government agreed a pay raise of around 5% for each of the last three years for engineers at 16 English passenger rail companies which have government contracts. The trade union representing train engineers, ASLEF (Associated Society of Locomotive Engineers and Firemen), recommended its 13,000 affected members accept the deal, which is now being voted on.
The strikes began in June 2022. They have been on a rolling basis, with some companies affected on one day and others on different days. The government’s Transportation Department, which ultimately funds the contracted train operating companies involved, estimates the strikes had caused at least £1 billion ($1.3 billion) of economic damage. Engineers at privately owned rail freight companies had all agreed to deals without any strike action, as had the Scottish and Welsh governments with their government-owned contracted passenger operating companies.
The announcement of the deal has provoked a political backlash, as it includes no changes to working practices, which the previous government was insisting upon. Train engineers are already relatively well paid in Britain, with typical salaries of around £60,000-£80,000 ($79,000-$105,000); this had fed into a wider political debate about whether they deserved an increase at all. The fact that a dispute over engineers’ working conditions is underway at one train operator (Government owned, LNER) has also been highlighted by those opposed to the deal, although in reality it is a separate issue.
Politics aside, the reality was that engineers in most cases received no pay raise for three or more years during a period of high inflation, and there is a shortage of trained engineers — so much so that plans are being considered to let 18-year-olds drive passenger trains; currently the minimum age is 21. Train engineers have long been represented by ASLEF, a union dedicated to that role only, which claims 96% of all engineers are members despite union membership being entirely optional. They had done well during the privatization period in Britain, as private franchise contractors were financially penalized for poor performance both operationally (cancellations and strikes) or financially (failing to meet revenue targets), so cutting deals to avoid strikes became the norm.
Under the original privatization system, the franchise holder decided pay and conditions, and did not need approval from the Transportation Department, which awarded the contract. The work agreements did, however, need to meet the contract’s financial plan, so if higher wages were in the plan originally, then they could be paid, as it was a business decision as it is in any other private business. ASLEF quickly realized that if it could get a good deal at one company, it could get something similar at most others, not least because the engineers themselves could simply go and work where the better deal was. This situation applied for over 20 years until the COVID-19 pandemic led every franchised train operator to need emergency government funds. As a result, the freedom to agree to pay deals disappeared, as the Transportation Department and Treasury exercised oversight of every deal.
It remains unclear whether the new government has solved some of the other problems that led to the strikes, or simply put that off for another day to be dealt with by the planned Great British Railways organization [see “British government plans major shake-up …,” Trains News Wire, May 26, 2021]. Currently, every passenger operating company has its own terms and conditions; trying to bring these into something approaching a national arrangement could easily lead to more strikes, not less.
New government starts industry shake-up
Within days of being elected, the new government began addressing the rail industry [see “Changes ahead for Britain’s railways …,” News Wire, July 9, 2024] . It announced the appointment of Peter Hendy, then chairman of British rail infrastructure company Network Rail, as its new rail minister, working for the its new transportation secretary. His appointment – welcomed across the rail industry; as he knows it in detail – was possible as since 2022, he has been a member of the upper house of the British Parliament, the House of Lords, where he sits as an independent, not affiliated with any political party.
As it had promised during the election campaign, the new government elected on July 4 took just two weeks to publish legislation that will prohibit the operation of contracted rail passenger services by private operators. The legislation, which began its progress through the British Parliament in mid-July, is expected to become law during 2024. While the new government’s policy to not renew private operating contracts was well publicized, the new law will remove scope for existing private contractors to challenge the decision not to extend or renew existing contracts. It changes the previous legal basis in place, since the privatization of Britain’s railway through the “Railways Act 1993,” which had been that private operators were the legally required norm.
In practice, several major contracts have been run by a government-owned company over the last six years. The new “2024 Passenger Railway Services (Public Ownership) Act” will amend the 1993 act to specifically prohibit extension of existing contracts and the award of new franchise contracts.
The new legislation will enable the new National Train Operator, or NTO, organization — created from the previous government-owned company owned by the UK Transportation Department — to take over existing contracts expiring in 2025. These include Southwestern Railway, run by British-based First Group together with Hong Kong transit company MTR, in May 2025; and c2c, run by Italian state rail company Trenitalia, in June 2025. Expiration dates for the other eight franchise contracts that remain in private hands all arrive by October 2027, so transfer of all of them to NTO operation is planned within the current five year parliamentary term (2024-2029). In almost every case the equipment used by the train operators belongs to specialist leasing firms or banks, and this will not change.
Cutbacks, too
Less welcome to the industry and transit campaigners was an announcement in late July that the £500 million ($660 million) “Restoring your railways” fund introduced by former Prime Minister Boris Johnson in 2020 was to be ended immediately as part of government plans to reduce expenditure. Several major new road construction projects were also axed. The announcement leaves several planned reactivation programs in limbo, although in reality most of the fund had already been spent. This left the reactivation projects without funding, despite substantial local support.
Two lines, one in western England (Exeter-Okehampton, which opened in November 2021) and another in northern England (Newcastle upon Tyne to Ashington, due to open in December) have accounted for most of the expenditure, although multiple planning studies have been done for other lines. It is likely that some of the more developed “Restoring your railways” projects will proceed, although exactly when and funded by who is unclear. In some cases, local campaigners have been seeking reinstatement of passenger rail service for decades, so the latest announcement is frustrating, but will not stop the reinstatement campaigns.
The new government has yet to announce its plans for the HS2 high speed program; media reports suggest parts of the project may be reinstated, although the overall state of government finances may mean this doesn’t happen, or at least not quickly.
“Train engineers are already relatively well paid in Britain”
Uhhhh… that is NOT great pay in the southern UK. Maybe in the rustbelt north it is good pay, but how many jobs are there? Income taxes roughly 20% between £12-50K and 40% above that. Then there is Council Tax per head, not cheap. Rents are very high, homeownership is impossible with that salary.
The UK has the highest fares and worst service of large European countries.
I have trepidation of government takeover of private passenger train operations. This can be called “amtraking”. When Via Rail Canada was founded, the quality of Canadian passenger train travel deteriorated. Such nationalisation in Canada was what I dreaded in the advent of Amtrak in America. Canadian National Railway’s passenger system timetable remained thick throughout the 1960s and early 1970s in contrast to Canadian Pacific Railway and American railways which operated without government subsidy.
The UK did it before from like late-1940’s to the mid-1990s. Compared to the privatized mess they have had since, nationalization could be a godsend… if done right. Also, you’re comparing apples to oranges with regard to Canada and the US vs. the UK. The UK is an small island nation, the USA and Canada are many, many, many magnitudes bigger with a lot less dense population – especially out west! The comparison just doesn’t work.
Agree with Alex. The privitization of rail services in UK has been a Rube Goldberg contraption, where the government subsidizes numerous companies to operate overlapping trunks of the overall network. It worked out —- until it didn’t.
I’m a free-market, private enterprise type of guy. But I don’t consider subsidized private carriers to be free market private enterprise.