Transport secretary calls for end to what he describes as out-of-date working practices and excessive wage demands for tens of thousands of rail workers
Transport unions have been warned that the spending cuts battleground will move to the railways after British Airways and Unite agreed a deal to end a bitter industrial dispute.
The transport secretary, Philip Hammond, called for a crackdown on what he said were out-of-date working practices and excessive wage demands for tens of thousands of rail workers.
He said spending £5bn of taxpayers' money each year on rail had become unsustainable owing to wage bills that have risen faster than those in other industries. The RMT, Britain's largest rail union, said his comments represented "class war in the raw".
Hammond's warning came as the chancellor, George Osborne, urged business leaders to "get stuck in" to reforming workers' rights even if unions objected.
Len McCluskey, the Unite general secretary, said Britain's largest trade union would "stand and fight" the proposals.
At an industry conference on Thursday, Hammond said rail operating costs had risen by £1.7bn over 10 years, with the knock-on effect on fares being an expected annual rise in ticket prices of 3% above inflation over the next three years.
"Ensuring that Britain's railways become affordable for passengers and taxpayers will need everyone in the industry to work together," he said. "A 21st-century rail network needs 21st-century employment practices, from the boardroom to the shop floor.
"With fares and levels of taxpayer support already so high, it would be simply irresponsible for us to ignore this issue any longer. Addressing inefficient working practices and excessive wage demands will form a key part of the strategy for building a sustainable and affordable railway."
The rail industry employs 84,000 people directly, with 35,000 staff at Network Rail – the owner of the infrastructure – and about 49,000 at the train operating companies.
The industry will be challenged to slash costs with publication of a government-commissioned report by Sir Roy McNulty, a former chairman of the Civil Aviation Authority. He is expected to recommend a radical reduction in overheads and structural changes.
Bob Crow, the general secretary of the RMT, accused the government of targeting unions. "This is class war in the raw, with its roots planted deep in the playing fields of Eton," he said.
Gerry Doherty, the leader of the TSSA rail union, said: "The fault lies exclusively with the Tories for selling off an industry which in the rest of the Europe is still owned by the state and run more cheaply as a public service."
The news came as Unite recommended a deal to BA cabin crew who have been locked in a dispute with the airline since 2009.
The announcement removed the threat of summer strikes, although the deal must be approved in a postal ballot of nearly 10,000 crew.
The agreement includes a two-year pay deal and the return of travel perks for thousands of staff who took part in 22 days of walkouts last year, costing BA £150m.
McCluskey said: "I don't think this is about winning or losing. If there is any victory, it is a victory for common sense."
BA said: "We are very pleased the threat of industrial action has been lifted and that we have reached a point where we can put this dispute behind us."