Government steps in to save rail industry as Covid-19 gathers pace

The government has announced it is taking emergency measures to support and sustain necessary rail services, effectively nationalising the UK rail industry and saving it from collapse in the face of plummeting income as the Covid-19 pandemic gathers pace.

The Department for Transport will temporarily suspend normal franchise agreements and transfer all revenue and cost risk to the government for a limited period, initially six months. 

Operators will continue to run services day-to-day for a small predetermined management fee. Terms and conditions of employment for rail workers will not change, and passengers will be entitled to fee-free refunds of advance tickets.

From today (23/3/20), rail services will be reduced and kept under review. The government has agreed on a plan with the rail industry to see a gradual reduction in train services across the country to reflect lower passenger demand. 

Operators will continue to run core services ensuring people remain able to get to work, can travel to access medical appointments and the flow of goods continues across the UK, but have strongly advised that no other passengers should travel.

The railways have already seen up to a 70% drop in passenger numbers. Rail fares revenue has also reduced as people increasingly work from home and adopt social distancing, with total ticket sales down by two-thirds from the equivalent date in 2019.

Grant Shapps, secretary of state for transport, said: “We are taking this action to protect the key workers who depend on our railways to carry on their vital roles, the hardworking commuters who have radically altered their lives to combat the spread of coronavirus, and the frontline rail staff who are keeping the country moving.

“People deserve certainty that the services they need will run or that their job is not at risk in these unprecedented times. We are also helping passengers get refunds on advance tickets to ensure no-one is unfairly out of pocket for doing the right thing.

“These offers will give operators the confidence and certainty so they can play their part in the national interest.”

Paul Plummer, chief executive of the Rail Delivery Group, which represents train operators and Network Rail, said: “The rail industry is working together so that people and goods can keep making essential journeys during this unprecedented national challenge, getting key workers to hospitals, food to shops and fuel to power stations.

“The industry strongly welcomes the Department for Transport’s offer of temporary support and while we need to finalise the details, this will ensure that train companies can focus all their efforts on delivering a vital service at a time of national need.

“We would like to thank our people, who continue to do an incredible job in difficult circumstances.”

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