Taxpayer foots pounds 450m bill for rail privatisation advisers
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Your support makes all the difference.More than pounds 450m of tax-payers' money has been spent on lawyers, accountants and consultants during the privatisation of the rail network, according to Government figures.
The revelation, which follows last week's news of multi-million-pound profits from the sale of a privatised train-leasing firm, casts another shadow over the Government's controversial rail sell-off.
Figures provided in a written answer by the Minister of State at the Department of Transport, John Watts, show that pounds 278m was paid by British Rail over the last three years to accountants, consultants, lawyers and "other professionals".
A further pounds 90m was spent by the Department of Transport since 1992. Another pounds 78m was paid out by Railtrack, the company set up by the Government to control track and signalling.
Substantial sums went to Tory allies. Among documented companies that handled rail privatisation work for the Government is Hambros, which donated more than pounds 368,000 to the Conservatives between 1979 and 1990.
Conservative MPs were retained as paid consultants by three other companies that won privatisation work: Ernst & Young; Shandwick; and Sedgwick. Shandwick donated pounds 26,000 to the Conservative Party between 1979 and 1990.
The sheer complexity of the privatisation, which has required a plethora of new contracts to be drawn up, has resulted in a bonanza for lawyers unparalleled in previous sell-offs.
Glenda Jackson, a Labour transport spokeswoman, said: "This is yet another example of fat cat consultants lapping up the cream at the taxpayer's expense. Thanks to rail privatisation, the Tories and their friends are riding the gravy train first class whilst the rest of us are stuck in the guard's van. It's time John Major and his ministers stopped stroking these fat cats and started condemning them."
Gwyneth Dunwoody, the Labour backbencher whose parliamentary question produced the figures, argued: "According to the Government's own figures, it costs pounds 1m to build a mile of new railway. The pounds 460m could have been spent on hundreds of miles of new track."
Last week, the sale of Porterbrook, the privatised train-leasing company, produced a personal profit of pounds 33.9m for its managing director, Sandy Anderson. The company had been in the private sector for just seven months.
Three other directors of the firm share pounds 30m and the 43 staff will make, on average, pounds 450,000 each. Stagecoach bought Porterbrook for pounds 825m in a deal that made pounds 320m in profits for City institutions.
Mr Anderson yesterday rejected Labour's tag of "fat cat controller", arguing that January's management buyout involved him putting his home and hundreds of thousands of pounds in savings at risk.
He told the Daily Telegraph: "Nobody wants to be on the end of the type of comments being made. But I have a clear conscience. We took a gamble. Nobody would have been saying it is a pity if it had all gone wrong.
"I got a remortgage on the house, and I had done a management buyout before and had several hundred thousand pounds saved from that."
Amid speculation that further mergers could bring more windfalls for rail bosses, Stagecoach yesterday ruled out a bid for two maintenance companies servicing Southwest trains. A spokesman said: "The company has no interest in bidding for the infrastructure companies, nor are we ever likely to."
Brian Wilson, the head of Labour's campaigns unit, said Mr Anderson was more of a beneficiary than a villain but added: "The privatised rail industry will move rapidly towards vertically-integrated monopolies, creating a string of millionaires. All this results from the gross under-valuation of the industry and the doubling of the taxpayer subsidy to support privatisation. The Tories have created this monster in the face of all warnings and it is going to haunt them from now until the general election."
Railway disaster, page 7
What pounds 450m can buy
225 new schools, 12,500 fully equipped ambulances, 30 Alan Shearers, 6 new Royal Yacht Britannias, 2 state-of-the-art hospitals, 53 hospital wards, 30,000 nurses (annual salaries), 30,000 heart bypasses, 69,230 hip replacements, 180,000 guide dogs, 221 Chieftain tanks, 37,500 qualified teachers (annual salaries), 450 million copies of the Independent on Sunday
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