Monday, Aug 16, 2010
MR King get raising rates before you have riots
BBC: Spending cuts spark fears of 8% rise in rail fares
Rail fares may rise by up to 8% next year if the Department for Transport (DfT) is hit hard in the government's spending review, sources have said.
While many rail fare rises are currently capped at inflation plus 1%, this could rise to 2% or 3% if the department faces tough cuts.
Increases are based on July's RPI measure, expected to be 5%, which could mean increases of up to 8%.
Posted by mark @ 01:16 PM (1319 views) Add Comment
14 Comments
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1. wdbeast said...
Why would increasing interest rates help?
2. khards said...
Great news!
thats what is said when house prices go up 8%. That will make the cost of going from London to Dover a low cost £65.48.
What a bargain £15,000 on rail travel if you want to commute for an hour each way.
The rail companies could now reduce the number of train carriages due to less demand a make even more profit for the directors. It is a win win situation.
Long live homeownerist Brittan!
3. khards said...
Another classic Dover to Penzance only £186.00
Time to give up the car and use public transport...
4. Ray123 said...
Surely prices should now rise in line with the CPI, like pensions.
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6. enuii said...
Remember, most people pay for rail tickets out of their taxed income so an 8% increase in fares will require a proportionally higher increase in income (if available) to compensate.
I would also guess (not being an observant and infrequent rail user) there is also VAT involved therefore a larger slice for the exchequer.
7. drewster said...
There is no VAT on train tickets. It's basically another 17.5% subsidy to the railways. Rail subsidies are themselves a handout to people who own property (residential or commercial) near train stations. I like trains as much as the next person who was brought up on Thomas the Tank Engine, but not at extortionate prices.
8. thebulltrap said...
There won't be any riots until the food runs out.
9. the number cruncher said...
I used to think rail subsidies where a great idea, but now I have read the works of the economist Henry George I realise that rial travel subsidies are a means by which the majority of the country pay taxes to make London house prices higher, and London Landowners even more tremendously wealthy.
10. drewster said...
The Number Cruncher - that's exactly right.
11. clockslinger said...
Now the party of the rich holds the reigns you will see the fairly quick removal of gloves as far as privatised utilities (including railways) are concerned. Watch this space for "reform" on corporate manslaughter (ie) removing any possibility of holding directors personally accountable. Populist but not subtle, the lovely Nu ConLibs.
12. drewster said...
clockslinger,
Looks like the government is torn. On the one hand they must want low train fares to keep house prices in Surrey high; but on the other hand they want to get chummy with their mates who own rail companies. I don't think they're that bothered about the rail companies any more. Fewer and fewer MPs have ever had a real job (even Cameron barely has), so they aren't as close-knit with the private sector big-wigs as they used to be. On the other hand, they all know people who have nice houses in pleasant commuter towns, so I expect them to be the most likely recipients of favours.
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