Attack on Rail Company Profit

12.27.00pm GMT Mon 31st Jan 2005

Like the other rail companies, Stagecoach has posted strong profits in the last 12 months despite very large government subsidies. The company made £43m profits almost all of which (£40m) was paid out in dividends despite receiving £119m in subsidies (these subsidy figures however are modest compared to Virgin which received £578m - making profits of £18m; National Express, £637m - with profits of £54m -; Arriva £307m with profits of £32m).

Vincent Cable, who meets the managing director of SW Trains in parliament on Thursday 24 February said: "the economics of the privatised railways is bizarre. The government is paying out large subsidies to the rail companies who pay the money out to their shareholders rather than reinvest it. Stagecoach/SW Trains are by no means the worst case and they have recently invested in decent rolling stock but services remain erratic. If the position is to improve there must be longer franchises so that there can be more long term investment".