Bill to address 'scandal' of £500m rail compensation gap


A Bill to end the ‘scandal’ of rail companies making a profit on delays and cancellations will be put before MPs, although its MP sponsor fears it will fail due to lack of parliamentary time.

In the House of Commons this afternoon Labour MP, Joan Ryan, said that between 2010 and 2015 Network Rail paid train operating companies’ (TOCs) £575m for delays and cancellations caused by issues such as points or power failures, but TOCs only paid £73m in compensation to passengers.

Claire Perry has said compensation is flowing into train companies

She put forward legislation that would require these ‘Schedule 8’ disruption payments between Network Rail and TOCs to be spent on improving passengers’ experience of rail travel.

Ms Ryan, MP for Enfield North, told fellow MPs a ‘compensation gap’ was ‘lining the pockets of train operating companies’ (TOCs).

No one spoke against the 10 Minute Rule Bill, which will now be put forward for a second reading by a cross-party group of MPs.

In theory this would take place next Friday, 22 April, although this is not sitting day for MPs, meaning that the Bill will only make further progress if ministers allocate parliamentary time.

Ms Ryan told Transport Network that she feared ministers could get out of opposing the Bill by not allocating time.

‘I’d be surprised if we made very much more progress in this parliamentary session, but we are raising the issue and signalling to the government that we intend to pursue it,’ she said.

She added: ‘This issue is a scandal: it won’t go away.”

The Bill seeks to ensure that any net profit TOCs make from compensation payments is only allocated to specified projects – such as helping to fund the retention of ticket office staff – that would increase the quality, value for money and reliability of passengers’ experience of rail travel.

It would give power to the Office of Rail and Road to monitor and enforce this.

Ms Ryan is also calling on the Government to bring rail travel within the EU Consumer Rights Act.

In a debate in February, rail minister Claire Perry told MPs that the low level of compensation payments to passengers was made ‘doubly annoying’ by the fact that train companies receive ‘section 8’ (sic) compensation payments.

She said: ‘Money is flowing into those train companies, and it should be flowing out to all passengers who are entitled to compensation.’

Transport Network approached the Department for Transport for a response to the Bill.

On its website, Network Rail says that Schedule 8 payments ‘are not designed to cover the refund claims which passengers make’.

'They are instead designed to hold train operators financially neutral to the long-term revenue impact as a result of disruption.’

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