TAXPAYERES have been forced to fork out £1 billion to privateer rail operators in compensation for profits lost due to strike action.

Rail union RMT announced the rip-off as 20,000 rail workers staged the latest strike in their 18-month dispute over working conditions, job security and pay at the weekend.

Rail operators are indemnified against lost profits through a clause in the original franchises awarded when the rail industry was privatised by the Tories between 1994 and 1997.

The union said the guarantee gives operators no incentive to negotiate or reach settlements during disputes as they know their profits will continue to roll in despite not a railway wheel being turned.

RMT said that despite the size of the collective compensation payout, rail operators are pressing ahead with the closure of almost 1,000 railway station ticket offices and cutting 2,000 jobs to add another £89 million to their profits.

RMT general secretary Mick Lynch said: “The public is being ripped off not only to financially underwrite this dispute that could have been settled 18 months ago, but also to fund the closure of ticket offices which they rely on.

“Closing 1,000 ticket offices will only save a small fraction of the money spent on rail company indemnity to prolong the strike and the handsome profits they have made.

“Ticket office closures are not popular with the public and we have seen mass opposition across the country.

“Not only are ticket office closures being used as a fig leaf for the wholesale de-staffing of stations but this is the thin end of wedge for getting rid of staff across the railway network, something our union will oppose vigorously.”

He said the closures would leave elderly, vulnerable and disabled people unable to travel by rail because there would be no station staff to help them.

He said RMT was available to negotiate but would continue its action. 

Between March 2020 and September 2022 rail companies made £310m in taxpayer-funded profits

Since privatisation 50 privatised rail operators have ceased to exist for reasons which include loss or expiry of franchises, bankruptcy or merger, often leaving services in chaos.