Railtrack, the state firm which employs the 4,500 signal staff, has agreed to repay the pounds 6m-a-day rent that British Rail operating companies have paid in advance to run their trains. Two one-day strikes have already been held and at least two more are scheduled.
A row over compensation for the rest of the money BR estimates it will lose for the four strike days has still to be settled.
Since Railtrack is still in the public sector, its losses will have to be financed by the taxpayer. BR's revenue shortfall is estimated at pounds 40m, leaving a loss of pounds 16m after Railtrack's compensation. The corporation said last night that it could not take on 'any consequential losses'.
Frank Dobson, Shadow Transport Secretary, last night denounced the 'Alice in Wonderland' economics of the railways as the industry is prepared for privatisation. 'It just shows how mad anybody would be to invest their money in a railway operating company,' he said. 'This perfectly demonstrates that the bulk of their costs are entirely beyond their control.'
Subsidies to the railways almost doubled to pounds 1.7bn this year, principally to pay for the rentals charged by Railtrack, which were doubled in April. BR managers are privately furious at the 'unbelievably inept' handling of the signal staff dispute by Railtrack, which insisted on taking over negotiations on a wage restructuring package in April 1993 - a full year before vesting day for the new state corporation.
Since then, apart from the 5.7 per cent 'non-offer', withdrawn before it was formally tabled, Railtrack has failed to reach a pay and productivity agreement with the rail union RMT. Proposals for reforming the wage structure were rejected out of hand last week by union negotiators on the grounds that many signal staff would be worse off.
Railtrack said yesterday that 75 per cent of signal staff would benefit from its proposals, and the remaining 25 per cent would be compensated.
No new peace talks are planned, and the conciliation service Acas appears to have washed its hands of the dispute. Two more strikes - one on Wednesday and one on the same day next week - will paralyse the system yet again.
Brian Wilson MP, Labour's transport spokesman, said the money being spent on compensating BR ought to be used to settle the dispute. 'This dispute would never have developed if BR was still a single entity with responsibility for negotiations.'
Labour should be proud to be the strikers' friend over the rail dispute, left-wing MP Peter Hain said yesterday. This was the epithet hurled at Margaret Beckett, the acting Labour leader, by the Prime Minister during angry Commons exchanges last week.
Mr Hain, MP for Neath, told a Tribune conference in London: 'This strike is democratic, legal and fully justified. Labour should back them to defeat the Government's dishonest disruption of a freely negotiated settlement.'
The strikers are forbidden from speaking to the press. The rule book of Railtrack makes clear that those speaking publicly will be disciplined, or even dismissed. Paragraph 1.13 of the rule book states: 'You must not make or issue a statement likely to be made public and which might damage the board's business.'
But Dennis, a signalman for more than a decade, agreed to speak - under the guise of a pseudonym.
He traced their discontent to the aftermath of the Clapham rail crash in 1988. 'That put the block on working excessive hours. It was not unusual for signalmen to work 90 hours a week, but Clapham, which was caused by excessively long hours and fatigue, brought everybody up short, including management, which had been happy about long overtime because it kept the basic rate down.
'Now people are beginning to work almost flat time, and they realise how low the basic rate is. That's why they leave the industry. Even with unemployment the way it is, there are still vacancies for signalmen.'