Investors in Britain’s indebted railway companies faced a bleak future on Wednesday as the government approved severe austerity cuts which will see many stations become ghost towns — though it gave the companies permission to hand out bonuses.
Half-yearly results released by nationalized state-owned passenger operator Network Rail show that the company, which delivers and maintains the country’s rail services, borrowed heavily to finance recent projects and had few options left. “It’s therefore essential that Network Rail and government work together to ensure that there are new, sustainable sources of investment,” Transport Secretary Chris Grayling said.
Experts have argued that the consequences of Britain’s decision to leave the European Union — and the associated currency fluctuations — have led to a vicious cycle of falling inward investment, which has led to the state having to lend out more money.
Plans to scrap up to 9,000 jobs in Network Rail’s support roles — representing 8 percent of its entire workforce — were approved in July. The 30 percent cut will be partly offset by a new national park in Northern England, which is expected to create “up to” 8,000 new jobs.
Across the country, fewer passengers are using train services. The number of journeys in July fell 1.7 percent compared to the same month last year. National accounts show that passenger journeys have fallen each year since 2012-13, with in-bound demand dropping to its lowest level since 1979. Network Rail has a backlog of more than 60,000 maintenance contracts — more than double the number when it came into operation in 1997.
The bleak news for its workers prompted the public to speak out, with dozens of protestors descending on Parliament Square in London for a show of force. By the end of Wednesday morning, 400 had gathered to voice their concerns over a strategy “ineptly managed by a political set that says the jobs that will create new employment are as valid as those which are cut.”