Labour attacks BR plans to 'give away' Red Star parcels service
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.CHRISTIAN WOLMAR
Transport Correspondent
The Red Star parcels service arm of British Rail is being given away to its management as part of the rail privatisation process, according to documents leaked to the Labour Party.
The management buy-out team, which BR recently announced had won the contest to take over the business, will also benefit from a year's free rent for the premises they use at stations, worth an estimated pounds 1.6m. The loss-making service has seen its turnover drop from pounds 71m to pounds 38m in the past five years in an effort to stem losses, which are still running at pounds 9m, the document says. The number of stations with a Red Star service was cut from 254 to 219.
According to Labour, the losses are a result of a change in BR accounting policy. The business used to be able to make use of existing BR trains, station and staff at marginal cost but from 1987 Red Star was pushed into the red when high internal charges were made for facilities, and by "extensive mismanagement". Michael Meacher, Labour's transport spokesman, said: "A major cash generator for an integrated public railway has been turned into a loss maker."
Labour says that the management team which presided over the disastrous past few years at Red Star should not be allowed to take over the business. Mr Meacher said: "The management team which has presided over the fall in business is now to benefit from the sale." He said there were alternative bidders, "some with higher bids than the MBO team".
The sale of Red Star has proved very difficult with an early attempt to off-load being cancelled last year, with BR saying that no suitable bidder could be found. As BR is under pressure to privatise as many of its component parts as quickly as possible, the document suggests that it has been forced to accept a similar type of offer to the one it rejected last year.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments