In a highly critical report, the Public Accounts Committee warned that the Government and rail industry would fail to provide the extra seats needed to keep up with soaring demand for rail travel.
We\’ve a system with huge fixed costs working at close to (and I wouldn\’t be at all surprised to hear, at the actual commuting times, well over) capacity.
It is a fresh blow for commuters who last month were told that the cost of their season tickets rise by 10 per cent more than the retail price index over the next five years.
Seems sensible. If you\’re at or over capacity and don\’t want to spend the billions upon billions to expand capacity (see fixed costs above, this isn\’t a matter of just the marginal costs of running a few more trains) then you should indeed raise prices so as to ensure that what capacity there is is bought by those who value it most.
You know, this wealth creation shtick of moving scarce resources from low value to high value uses.