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Rail fares by 2.7% - fair for rail users?

Graham Watson

3rd January 2020

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The annual raise in rail fares, as people return to work, is always a prompt for plenty of navel gazing regarding the state of the railways and whether or not the rise is 'fair'.

In this instance, the 2.7% rise in fares is less than the current retail price index measure - although that's discredited to some extent - and below the current rate of growth of earnings. So, what's the issue?

Well, customer satisfaction, argue some. But you might also suggest that people do have a limited choice as regards rail travel. There are some alternatives.

And then there's the whole issue of improved services and investment in the sector - if customers want a better service, it's inevitable that they're going to have to pay more for it. And why should anyone else, like the taxpayer, subsidise this? I wouldn't expect someone to subsidise my consumption of craft ale, for instance.

Meanwhile, in Germany, rail fares have been cut by 10%, to encourage more people to travel longer distances by train.

Background:

Real terms change in the cost of transport since 1980 (source: DfT): Bus and coach fares +64% Rail fares +63% Motoring -20%

Percentage of weekly household expenditure going on rail and tube fares in the United Kingdom (UK) in 2018, by disposable income decile group
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Graham Watson

Graham Watson has taught Economics for over twenty years. He contributes to Tutor2U, reads voraciously and is interested in all aspects of Teaching and Learning.