Rail fare rises (again)

[david_carnell]

Gosh - it's been what, a month, since you last mentioned the good old money tree?

Firstly, I'd suggest that the nudge theory that is used on cycle scheme tax breaks can be equally as valid on public transport. If it got people out of cars then the wider benefits are clear. Also, cycle scheme tax breaks are universal and not means tested so I don't see why this would be different. I've already shown that it could just as likely pay for a miniumu-wage cleaner's bus fare as it does a stockbroker's Surrey commute. Universality also has the benefit of investing everyone using the service with a stake in ensuring it runs well.

Secondly, on the issue of funding, it is no different to any other spending decision. Is this important or worthy enough to divert funding from elsewhere. I'd say yes. I'd also happily see an increase in road tax, petrol or other "eco-tax" to fund it.

Thirdly, I'm suggesting it as a political vote winner by helping those suffering from excessive fare rises yet again. See today's BBC report.

I will ask again though. If not this, then what? No one else has suggested any method for helping tackle the cost of rail fare increases.

[DaveR]

I'm pretty sure that the money a tax break would cost would be better spent on direct investment in transport infrastructure.

The problem with UK rail fares is that they are partially regulated within a system of private ownership, so TOCs rip off those that they can to subsidise those they can't (as much), and then top up their revenue by selling off some capacity at below cost. That's why the UK has simultaneously the highest (walk up single fares) and lowest (advance off peak returns) rail fares in Europe. It seems to work though - passenger numbers and journey frequency have never been higher, and the rolling stock in particular is 100 times better than even 5 years ago.

Interestingly, European operators are beginning to move towards UK pricing models, which is great if you want to get the TGV from Paris to the South of France at lunchtime on a Tuesday.

There are only two ways of actually bringing rail fares down - higher public subsidies or greater efficiency. You can tweak the price regulation to favour one group of consumers over another, but that's just redistribution. There's no appetite for increasing public subsidy (although some targeted infrastructure projects would help) so greater efficiency is what is required. I'd be in favour of handing over the entire UK railway business to Deutsche Bahn.

[El Pibe]

It is interesting that infrastructure projects such as cross rail and S2, that cost quite alot and will be paid for in the form of borrowing (and doubtless passed on to the direct consumer once some weird half baked privatisation thingy goes through) for a long time, are lauded by government as key to growth, but fixing the desperately inefficient, overcrowded and expensive commuter infrastructure to London (key generator of wealth for UK plc) doesn't merit a mention as privatised companies risk our lives by cutting maintenance costs, impose higher than inflation price increases and funnel the profits to shareholders, instead of just fixing the fucking problem.

somewhere in there is a point, I think, better expressed as 'wot daveR said'

[LondonMix]

Do you currently think that public transport is underused and that if it were more affordable there would be less drivers? I'd be surprised if that were the case and therefore I can't see the justification for trying to nudge people on to a heavily used service.

Without the need to incentivise public transport per se, there is absolutely no justification for making it a universal tax break.

david_carnell Wrote:

-------------------------------------------------------

> Gosh - it's been what, a month, since you last

> mentioned the good old money tree?

>

> Firstly, I'd suggest that the nudge theory that is

> used on cycle scheme tax breaks can be equally as

> valid on public transport. If it got people out of

> cars then the wider benefits are clear. Also,

> cycle scheme tax breaks are universal and not

> means tested so I don't see why this would be

> different. I've already shown that it could just

> as likely pay for a miniumu-wage cleaner's bus

> fare as it does a stockbroker's Surrey commute.

> Universality also has the benefit of investing

> everyone using the service with a stake in

> ensuring it runs well.

>

> Secondly, on the issue of funding, it is no

> different to any other spending decision. Is this

> important or worthy enough to divert funding from

> elsewhere. I'd say yes. I'd also happily see an

> increase in road tax, petrol or other "eco-tax" to

> fund it.

>

> Thirdly, I'm suggesting it as a political vote

> winner by helping those suffering from excessive

> fare rises yet again. See today's BBC report.

>

> I will ask again though. If not this, then what?

> No one else has suggested any method for helping

> tackle the cost of rail fare increases.

[DaveR]

BTW, I wasn't kidding about the TGV. This is the website:

http://www.idtgv.com/en/

Return fares Paris - Nice still available in September for 50 euros.

[uncleglen]

Public transport is under used and it is not surprising. I gave up my car for a couple of years and the cost of travelling around on trains with the children cost a lot of money and 'wasted' a lot of time- it worked out cheaper to get a small car and, since the railways we used at weekends frequently had bus replacements having a car was a necessity as there is only a finite amount of leisure time.

[LondonMix]

So if you were able to get a tax deduction for your rail travel you would sell your car? If not, I can't see any justification for this. Sure, at various points of life, a car might be more convenient but I don't think that in the case of travel into London, people are very price sensitive. While costs have gone up dramatically over the last 5 years, I dare say I don't see that people have abondoned public transport for other modes of commuting into work. Part of this is because there is no choice-- most offices in central London have no parking so driving in (for office workers) isn't even an option.

I'd be very skeptical about any claims that a tax refund would significantly nudge more people on to public transport, particularly for their commutes.

[david_carnell]

Ok - so I ask again....what would you do?

Fares are too expensive, infrastructure creaking and TOCs are a joke who cream of tax payer subsidies to shareholders.

I'm all ears...

[El Pibe]

I think somewhere my point was instead of faffing at the edges, get direct government infrastructure investment so that it's all workable without incessant price hikes, for at least 20 years anyway.

Sadly we're stuck with those awful PFI deals whereby the taxpayer basically pays the capital investment whilst the shareholders reap the rewards; extricating ourselves would be even more costly...thanks Gordon!!

[DaveR]

"Public transport is under used and it is not surprising"

In London, at least, this is evidently not true, and in fact the general stats for rail use indicate journey numbers now are far higher than any time in the last thirty years, and there is a problem with lack of capacity.

"Fares are too expensive, infrastructure creaking and TOCs are a joke who cream of tax payer subsidies to shareholders"

This is easy to say but the evidence for each of these propositions is contentious, at least. Fare levels are a product of semi-regulation, so some are 'too expensive' but others are cheap as chips (whether considered comparative to other rail operators, or by comparison to transport alternatives). The infrastructure is creaking because it is under pressure from increasing demand and because it is in the process of being upgraded - there is no way of carrying out infrastructure work without disrupting services. Finally, profits in TOCs are modest because franchise agreements specifically provide that additional revenue from fare increases above a certain level are surrendered by the company to the DoT.

The reason why fares are rising is clear - govt. subsidy is falling and investment spending is rising. TOC profits and returns to TOC shareholders are pretty much static. A change in the ownership structure of the railways as a whole might improve things but I wouldn't want to bet on it as a hypothetical. My comment earlier about handing the lot over to Deutsche Bahn was at least partly serious - its a tried and tested ownership model with a tried and tested owner.

[uncleglen]

Apart from the tube in Central London, the rest of the transport system is very sparsely occupied during the day.

[LondonMix]

Because people are at work presumably. Do you think this would change if there was a tax break on travel costs?

[DaveR]

"Apart from the tube in Central London, the rest of the transport system is very sparsely occupied during the day."

It's obviously true that it's busier at 8am than at 11am, but I'm not sure what your point is? Use of public transport in London has steadily increased over the last 10 years, both in absolute terms and relative to total journeys and other modes of transport. The latest TfL report is here:

http://www.tfl.gov.uk/assets/downloads/corporate/travel-in-london-report-5.pdf

As I said before, the number of rail journeys has also never been higher.

It seems pretty clear that demand for public transport is healthy.

[????]

david_carnell Wrote:

-------------------------------------------------------

> Gosh - it's been what, a month, since you last

> mentioned the good old money tree?

>

> Firstly, I'd suggest that the nudge theory that is

> used on cycle scheme tax breaks can be equally as

> valid on public transport. If it got people out of

> cars then the wider benefits are clear. Also,

> cycle scheme tax breaks are universal and not

> means tested so I don't see why this would be

> different. I've already shown that it could just

> as likely pay for a miniumu-wage cleaner's bus

> fare as it does a stockbroker's Surrey commute.

> Universality also has the benefit of investing

> everyone using the service with a stake in

> ensuring it runs well.

>

> Secondly, on the issue of funding, it is no

> different to any other spending decision. Is this

> important or worthy enough to divert funding from

> elsewhere. I'd say yes. I'd also happily see an

> increase in road tax, petrol or other "eco-tax" to

> fund it.

>

> Thirdly, I'm suggesting it as a political vote

> winner by helping those suffering from excessive

> fare rises yet again. See today's BBC report.

>

> I will ask again though. If not this, then what?

> No one else has suggested any method for helping

> tackle the cost of rail fare increases.

Reasonable assumption for commuter from Guilford mainly in highervtax break: Season ticket from guilford annually = 3224 plus 1216 zone 1 = 4440' tax relief at 40 PC = 2604 tax relief

Cleaner in central London, probably zone 1-3 no way anything than a basic rate tax payer. Annual 1-3 oyster cost= 1424, tax relief at 20pc = 284

Regressive, subsidising the middle classes and completely unaffordable....the money tree hasn't,t been mentioned for ages but until you demonstrate some understanding that money simply doesn't just grow on trees then it,s going to raise its head from time to time

[Jeremy]

Yeah I really wouldn't think that commuters are generally a group in need of state assistance.

One option could be to encourage businesses to allow more flexible working hours, so people can travel off peak. Perhaps a more strategic solution could involve making the country less London-centric, encouraging business and government departments to set up shop outside of central London... or even outside of SE England...

[david_carnell]

I don't think it grows on trees, I just think it should be spent on helping people with the cost of living. Travel-to-work costs seem a sensible way of helping those of work but still struggling. But if you want to talk hard facts and figures, I'm game...

Increasing use of the railways isn't a ringing endorsement of the success of private railways, it is a result of the increasing congestion on our roads and many (young esp.) people abandoning their cars.

A recent academic study shows that long-distance rail travel in the UK now costs 0.49p per km. This compares with 0.28p per km in Germany, 0.22p per km in Italy and 0.15p per km in France.

It is also nonsense to suggest that investment in railways has increased under private ownership. In the five years prior to privatisation, investment stood at ?3.2bn at 2012 prices. In the five years from 2008 to 2012 investment slumped to ?1.9bn.

British Rail ran the national network for a subsidy amounting to less than ?1bn ? and that subsidy was falling as the economy improved.

Privatisation has seen the annual subsidy bill top ?5bn during the many crises that followed the fragmentation of the system. And this was when the economy was booming. Today the subsidy stands at around ?3bn. This does not feel like a success story to me.

If all unnecessary costs that fragmentation and privatisation have imposed on the rail industry were eliminated, and the resultant savings were used to reduce fares, it would equate to an across-the-board cut in rail fares of 18%. That's close to the tax-break I was mentioning...

[BrandNewGuy]

david_carnell Wrote:

-------------------------------------------------------

> A recent academic study shows that long-distance

> rail travel in the UK now costs 0.49p per km. This

> compares with ... 0.15p per km in France.

Really? I'd like to see those figures. Earlier this year I tried to organise some rail trips in France and found it horrendously expensive - and I looked at advance fares, offpeak, local v 'inter city', group travel etc. Gave up and went by car instead...

[El Pibe]

Maybe the Heathrow Express is hideously skewing the results

[david_carnell]

Or the Gatwick Express. Or any fare in the north outside a major city.