Rail union RMT has revealed that Transport Secretary Mark Harper has allowed two private rail companies to be paid £82 million in dividends for 2022.

Both companies are part of a major industrial dispute over pay, job security and working conditions which began last June, during which the government has paid them hundreds of millions of pounds of public money to indemnify them against lost revenue from strike action.

The two companies are:

• FirstRail Holdings Ltd, the holding company for five FirstGroup franchises, which has reported dividend payments of £65 million in its 2022 accounts; and
• Govia Thameslink Railways, the operator of Britain’s largest rail franchise, which reported dividend payments of £16.9 million respectively in its 2022 accounts.

FirstRail Holdings Ltd’s franchises include Avanti West Coast and Transpennine Express, which have both been the subject of recent public and political controversy after cancelling hundreds of services. Despite their significant failure to provide the service that they are contracted to provide, the government has renewed or extended contracts for Avanti West Coast and may shortly renew or extend the Transpennine Express contract which is due to expire on 28 May, despite recent data revealing that a quarter of its trains were cancelled between 4 February and 4 March, and despite having advised its passengers not to travel on its services in December because its rostering system had failed.

Govia won a contract to carry on running the Thameslink, Southern and Great Northern franchise from the government in October 2022, despite the fact that its sister company London and South East Railway (LSER) being stripped of the Southeastern franchise after being found to have concealed public money.

The Department for Transport (DfT) allowed Go-Ahead Group to conduct its own internal inquiry into LSER’s failings and renewed Govia’s contract for the Thameslink franchise despite the two companies sharing many of the same management personnel.

The DfT has indemnified all the franchises against the cost of lost passenger revenue during rail workers’ strikes, paying them hundreds of millions of pounds of public money. The union believes that this is unnecessarily prolonging the dispute, as the employers do not feel the full impact of stoppages.

RMT General Secretary Mick Lynch said: “The DfT is now little more than a representative of big business, geared to turning tax revenue into shareholder dividends.

“If you’re a private train operator, it doesn’t matter whether your problem is unpredictable passenger revenue, costly train leases or industrial action, the Secretary of State is there to help, opening the public purse and emptying it into shareholder’s pockets.

“This system is not operating in the interests of passengers, railway workers or the taxpayer.

“It is clear that only full public ownership of train operation in this country can save our railways from being looted by this gang of unaccountable spivs.”