After accusations that private train companies are exploiting passengers by more than £150 million last year in paying out compensation for late and cancelled services, a government inquiry has been set up to investigate the rail fare refunds given to passengers as demanded by delegates at the Labour Party conference.

The Freedom of Information Act disclosed information that these train companies received a total of £172 million from the public-funded Network Rail for late running trains but they refunded less than £10 million to passengers.

Manuel Cortes from the TSSA transport union raised an emergency call at the Manchester conference addressing transport secretary Maria Eagle to push for an immediate inquiry into a faulty system which robbed millions of passengers.

Cortes bursted out saying, “This Coalition has already raised fares by a staggering 18 per cent if January’s 6.2 per cent increase goes ahead as planned. Now we have the scandal of private rail firms picking their pockets on refunds as well. They bank over £170 million for late running trains but the poor passengers get less than a miserly £10 million.”

Expressing his support for the people, Cortes said that he wanted an inquiry to be set up to stop the scandal and also to let passengers know that they have the union’s support. “They have been ripped off for too long and Labour will stop that happening when we return to power”, he said.

A spokesman for the Association of Train Operating Companies (ATOC) accused Cortes of a “profound misunderstanding of how the railway works. Under a system regulated by the office of Rail Regulation, Network Rail pays money to operators for problems which cause disruption to services and put people off from travelling by train in the future”, adding that, “compensation paid to passengers has become increasingly generous and easy to apply for.”

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