Rail strikes: Pay deals to avoid further industrial action a ‘long way off’, unions say
Rail union leaders have told MPs there is much left to agree if further national strikes are to be averted, with one accusing the government of “sabotage” in its negotiations.
RMT leader Mick Lynch said in evidence to the transport committee his members were “a long way” off securing deals on the core pay issue.
He said Network Rail and train operating companies were separately offering well under half what his members deserved to navigate the cost of living crisis, after years of pay freezes.
Watch and follow live as rail union leaders appear before MPs – strikes latest
His colleagues at the Aslef and TSSA unions declared they were as far away as was possible to be from deals to end their separate disputes, when asked to give a score on a scale of one to 10.
When asked about the state of play in its row with train operators, Mick Whelan, general secretary of the drivers’ Aslef union, told the MPs: “I think you can include zero. We are further away than where we started.”
RDG chair Steve Montgomery and Tim Shoveller, Network Rail’s chief negotiator, were more optimistic about securing deals to end the various disputes.
Both are due to hold more talks with the RMT and TSSA in the coming days but Mr Montgomery admitted “more work” was needed with Aslef as the dispute was in its infancy.
RMT leader Mr Lynch was particularly vocal on the role of the government, saying ministers had engineered the dispute.
He said it had deliberately provoked his members through “reckless policy” over many years and inflicted “loads” of damage on the rail system as a result.
He accused the Department for Transport of taking a back seat role in the negotiations, and seeking an expansion of driver-only train operation in its talks with the RDG, adding the union would never agree to such a move.
RMT general secretary Mick Lynch accused the government of being responsible for ‘loads’ of damage to the railways
“It’s daft. To me, it’s sabotage. They wanted these strikes to go ahead,” he claimed when describing how nine clauses on the issue were added to a draft document ahead of the walkouts last week.
Mr Whelan backed the RMT’s position, saying that Aslef also fiercely opposed driver-only trains on the grounds they are unsafe.
The TSSA has agreed a pay deal with Network Rail but remains in dispute with train operators – with London’s Elizabeth Line set to be hit by a first walkout on Thursday.
The RDG and Network Rail have consistently argued that the railways can not sustain the pay hikes being demanded, especially given the damage inflicted on passenger numbers since the pandemic.
When asked about the RMT pay dispute, Mr Shoveller said only a few thousand Network Rail staff needed to be won over, citing higher worker support for a settlement.
For his part, Mr Montgomery also refused to discuss whether this would include improved offers, saying that to reveal any such position would be disrespectful to the trade unions.
One of the world’s largest investment firms has waded into the fight over the future of Thames Water, the water utility which is racing to stay afloat.
Sky News has learnt that KKR is in talks with Thames Water and its advisers about participating in a £3bn share sale which forms part of a wider recapitalisation plan.
City sources said this weekend that KKR, which has more than $550bn of assets under management, was among a handful of parties which had accessed a data room for potential investors.
Rothschild, the investment bank, is running a process to raise around £3bn from the sale of an equity stake in Thames Water, which is grappling with a debt mountain of as much as £19bn.
Other investors which have expressed interest in acquiring newly issued shares in the water company include Carlyle and Castle Water, the latter of which is controlled by Graham Edwards, the Conservative Party treasurer.
Global Infrastructure Partners, which is owned by BlackRock, Brookfield and Isquared are also reported to have lodged an interest, although sources said that the latter two were unlikely to play any further role in the process.
The crisis at Thames Water is presenting Sir Keir Starmer’s administration with a challenge as the debt-laden company attempts to avert temporary nationalisation.
Insiders said that KKR was “a serious player” in the equity process being run by Thames Water, although its outcome hinges on a final determination by Ofwat, the industry regulator, which is due by January at the latest.
Thames Water – and other suppliers across Britain – wants to hike bills and is demanding leniency from Ofwat on fines for past transgressions.
One obstacle to KKR buying a big stake in Thames Water, which has more than 15m customers, may be its 25% holding in Northumbrian Water.
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Under Ofwat’s mergers regime, the Competition and Markets Authority would need to review the deal, although there would not be an automatic prohibition.
The share sale process is being run in parallel to an attempt to raise up to £3bn in debt financing from hedge funds and other investors.
A battle has broken out between the holders of Thames Water’s class A bonds, which account for the bulk of its borrowings, and its riskier class B debt.
Both sets of bondholders have submitted proposals to the company, with the class A’s arguing that theirs is more certain and the class B’s arguing that theirs will save the company £380m or more in fees and interest over a 12-month period.
Thames Water has already endorsed the class A group’s offer, with an initial £1.5bn of funding to be delivered immediately.
The class A bondholders are now trying to secure backing for their proposal within the next fortnight.
Their group, which includes the American hedge funds Elliott Advisers and Silverpoint, would earn in the region of £650m during the first year of the financing.
One area of controversy is likely to be any incentive plan for Thames Water bosses, led by chief executive Chris Weston, as part of a deal to give the company a stay of execution.
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Last month, the environment secretary, Steve Reed, established an independent review of the industry that will look at far-reaching reforms.
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It was unclear this weekend which of KKR’s funds was participating in the Thames Water equity-raise.
The firm owns John Laing, an infrastructure investor, which it took private in 2021.
It has also owned South Staffordshire, another water company, selling its 75% interest in 2018.
KKR declined to comment.
The business secretary will next week hold talks with dozens of private sector bosses as the government contends with a significant corporate backlash to Labour’s first fiscal event in nearly 15 years.
Sky News has learnt that executives have been invited to join a conference call on Monday with Jonathan Reynolds, in what will represent his first meaningful engagement with employers since Wednesday’s budget statement.
Rachel Reeves, the chancellor, unsettled financial markets with plans for billions of pounds in extra borrowing, and unnerved business leaders by saying she would raise an additional £25bn annually by hiking their national insurance contributions.
An increase in employer NICs had been trailed by officials in advance of the budget, but the lowering of the threshold to just £5,000 has triggered forecasts of a wave of redundancies and even insolvencies across labour-intensive industries.
Sectors such as retail and hospitality, which employ substantial numbers of part-time workers, have been particularly vocal in their condemnation of the move.
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On Friday, the Financial Times published comments made by the chief executive of Barclays in which he defended Ms Reeves.
“I think they’ve done an admirable job of balancing spending, borrowing and taxation in order to drive the fundamental objective of growth,” CS Venkatakrishnan said.
His was a rare voice among prominent business figures in backing the chancellor, however, with many questioning whether the government had a meaningful plan to grow the economy.
Mr Reynolds held a similar call with business leaders within days of general election victory, and over 100 bosses are understood to have been invited to Monday’s discussion.
A spokesman for the Department for Business and Trade declined to comment ahead of Monday’s call.
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