In the News

Rail fares by 2.7% - fair for rail users?

Graham Watson

3rd January 2020

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

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.

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