I hadn\’t realised they were this high:

But he ruled out fare cuts as he warned that the £5.2bn-a-year state subsidy for the \”relatively small\” and \”better off\” proportion of the population that use trains is unsustainable. Overall, farepayers currently spend £6.2bn a year.

Srsly? Some 50% (near enough) is subsidy?

demand that saw 1.3 billion passenger journeys last year.

Stick a fiver on every fare and we\’re done then, eh?

Sadly, of course, it doesn\’t quite work like that.

Some lines and some times are hugely subsidised. Some others are profitable without subsidy.

But I think Our Man\’s got a point. Only 12% of the population use trains, why should their travel be subsidised by the rest of us so much?

18 thoughts on “Rail subsidies”

  1. AS a matter of public choice: I wonder how high a proportion of that 12% are civil servants?

    Entirely impressionistically, on the rare occasion I get on a train it seems to be groaning with quangocrats and local government officers on their way to important consultation exercises and training events.

  2. The big problem being that rail travel is already far more expensive than other alternatives. I went to Brighton with my wife not that long ago, and it was cheaper to rent a car for the day than to buy two return fares – for a journey of under an hour (granted, petrol costs brought the prices into line with one another, but a car gave us the freedom to go where we wanted)

    If you know where you want to go years in advance and are willing to tie yourself to a specific train, you can get some good savings, but for the person who just wants to buy a ticket in the station, it’s far from cheap.

    There also seem to be some very odd rules. Looking at nationalrail.co.uk at the moment, it’s showing return tickets as being generally cheaper than singles (Edinburgh return for £118.50, single for £235 for example).

    So by all means, cut the subsidies, but why not try and make the fares make sense at the same time…

    (I should probably point out that my wife spends over £200 per month on her travelcard, and I spend about £100 a month on trains and buses – it may be that we’re big recipients of the subsidies)

  3. So Much For Subtlety

    Every person who travels by train is one less person using the roads. That is a public benefit in that the rest of us get less crowded roads and we can more easily find a car park.

    Not that I am defending this nonsense.

  4. And the real challenge to anyone attempting to sort this out is that the loss making lines are pretty much all in the shires, while the profitable lines are intercity and London commuter routes.

    Any attempt to properly sort this out will result in fares rocketing and lines closing in the countryside. Not a vote winner.

  5. I wonder what % of that 12% that use trains are net tax payers even if we include the subsidy they get from the tax payer.
    I think that we would find out that most of them are already paying more tax than they earn.
    Of course you could say that the people who really benefit from the subsidy are the overpaid train staff but I don’t know enough to say if that is true.

    “So Much For Subtlety // May 19, 2011 at 8:16 am

    Every person who travels by train is one less person using the roads. That is a public benefit in that the rest of us get less crowded roads and we can more easily find a car park. ”
    Very true. Do we really want more people driving.

  6. Um, I’m inclined to agree with So Much … (if I may call you that ).
    They may be 12%, but they are probably largely commuters near cities, so I suspect account for a lot more than 12 % of city travellers. Say its 25%. If they move to the roads you add 25% to city traffic. That’s probably instant gridlock in most UK cities.
    I suspect that’s a short term issue though. It’s pretty clear that EU (and hence UK) policy is to deliberately make energy massively more expensive. And transport is energy intensive. We are moving into a world where we can’t afford to travel much. Buy a pushbike or stay at home, basically.

  7. Passengers on most commuter lines into London could not use a car instead, it simply would not be possible for hundreds of tbousands of people to drive into London and park.

    Ironic that a government which thinks that national infrastructure cannot be subsidised also believes that BY LAW it should give 0.7% of our GDP annually to corrupt foreign states.

  8. where’s that 12% number from and what does it mean? Only 12% of the population use trains regularly or, say, at least once a year?

  9. SMFS,

    “Every person who travels by train is one less person using the roads. That is a public benefit in that the rest of us get less crowded roads and we can more easily find a car park.”

    But congestion would (and I’d argue already does) reach a certain point and stop. If it took me 90 minutes to get to Reading instead of 50, I wouldn’t do it. I’d find a job elsewhere.

    If it was worth my while to pay for the train, I’d do it. If not, I’d work locally. But I might actually be no worse off because the rail subsidy wasn’t taken from me.

    When you work it out, the main beneficiaries of rail subsidies are people with land near stations and rail companies.

  10. I’ve often wondered about this. When my employer provided a company car I paid a significant amount of tax on a benefit-in-kind. Fair enough. The same went for those who were provided with London travel cards that could be used for personal travel.

    So why doesn’t a Government employee who travels on Government subsidised trains pay a benefit-in-kind tax?

    Yes I am aware that it would be practically impossible and the costs would probably outweigh the benefits, but if it was acknowledged it would provoke and interesting discussion.

  11. So Much For Subtlety said: “Every person who travels by train is one less person using the roads. That is a public benefit in that the rest of us get less crowded roads and we can more easily find a car park.”

    The infrastructure of the railways takes up space that could conceivably be used by cars, buses or lorries. Or cyclists. I wonder how many railways go into that there London and how many cars they could accommodate if they were roads instead with car-parks where the stations are.

    That £5billion a year should be left in our pockets to spend on what we see fit. Some of it would be left in the pockets of train passengers so they could stand higher fares.

  12. So Much For Subtlety

    Tim Almond – “But congestion would (and I’d argue already does) reach a certain point and stop. If it took me 90 minutes to get to Reading instead of 50, I wouldn’t do it. I’d find a job elsewhere.”

    Sorry but isn’t that kind of my point? We all get to benefit by trips to Reading that only take 50 minutes. That means more going to the City Centre for shopping, visiting museums, going to hospital to see grandma, that sort of thing. Without those trips we would all be a little bit poorer, wouldn’t we?

    And Bangkok or Jakarta shows how bad congestion can get.

    “If it was worth my while to pay for the train, I’d do it. If not, I’d work locally. But I might actually be no worse off because the rail subsidy wasn’t taken from me.”

    True, but the question was a social benefit, not an individual one.

    11 Gareth – “The infrastructure of the railways takes up space that could conceivably be used by cars, buses or lorries. Or cyclists. I wonder how many railways go into that there London and how many cars they could accommodate if they were roads instead with car-parks where the stations are.”

    I don’t want to go down as supporting subsidies to railways. I don’t. But railways are definitely high capacity “dense” forms of transport. You need a *lot* more room to transport the same number of people by any other form except perhaps walking. Which is slow. Certainly with cars there is no comparison. Turning the rail way itself into a road would mean fewer people traveling.

    “That £5billion a year should be left in our pockets to spend on what we see fit. Some of it would be left in the pockets of train passengers so they could stand higher fares.”

    Absolutely.

  13. Tim Almond // May 19, 2011 at 11:16 am

    But congestion would (and I’d argue already does) reach a certain point and stop. If it took me 90 minutes to get to Reading instead of 50, I wouldn’t do it. I’d find a job elsewhere.

    Tim,
    I am conducting an epirical study of your theory at this moment. There are no jobs around for me.

    Smiles

  14. Having people use the Central line rather than driving on the A40 is a huge benefit to the people driving on the A40. The question is though is the Central line profitable. Surely such a heavily used piece of infrastructure must get shed loads of revenue. Of course, operating costs are through the roof due to a certain avian species.

  15. So Much For Subtlety

    Josh – “Having people use the Central line rather than driving on the A40 is a huge benefit to the people driving on the A40. The question is though is the Central line profitable. Surely such a heavily used piece of infrastructure must get shed loads of revenue.”

    This must be one of the great mysteries of modern Britain. The costs of the Central line (and the rest) were, so to speak, sunk a long time ago. They dug the damn tunnels and put in the stations. They even laid down some track. I am told that all the lines in London lost money except the Northern Line which was only profitable because they bought up all the land along the track and built housing. But that was a long time ago and does not matter now.

    The on-going costs are not nothing. They will have to replace carriages, track, signals and so on. Every now and then. They do carry out work on the tunnels themselves every now and then. But all these are minor costs compared to the cost of building the things – costs which have long since been paid off or forgiven.

    So why can’t they run a decent service at a decent price? I assume it can only be the Unions and their outrageous wage demands. And management incompetence.

  16. So Much For Subtlety

    Josh – “Having people use the Central line rather than driving on the A40 is a huge benefit to the people driving on the A40. ”

    I forgot – congestion costs everyone as well. If you live or try to do business in a place like Bangkok, you never know if your meetings will take places at the time you agreed because the congestion means tha

  17. So Much For Subtlety

    Sorry, try again.

    Josh – “Having people use the Central line rather than driving on the A40 is a huge benefit to the people driving on the A40. ”

    I forgot – congestion costs everyone as well. If you live or try to do business in a place like Bangkok, you never know if your meetings will take places at the time you agreed because the congestion means that people may or may not turn up on time. Or so they say.

    I think we all benefit if business meetings take place on time, if lecturers turn up when they are supposed to and occasionally people benefit a lot if, for instance, surgeons are actually in the operating theatre when the patient is ready.

  18. SMFS,

    Sorry but isn’t that kind of my point? We all get to benefit by trips to Reading that only take 50 minutes. That means more going to the City Centre for shopping, visiting museums, going to hospital to see grandma, that sort of thing. Without those trips we would all be a little bit poorer, wouldn’t we?

    If you’d be a bit poorer without them (emotionally), you’ll happily pay for them (financially).

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