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Rail fares: Government will be making a 'profit from passengers' by 2018

By Western Daily Press  |  Posted: January 01, 2014

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Rail fares are rising so fast that by 2018 the Government will be making “a profit from passengers”, according to a report commissioned by the Campaign for Better Transport (CBT).

By 2018, fares revenue will cover 103 per cent of the operating costs of the railways, up from 80 per cent in 2009, said the report by consultants Credo.

It added that by 2018 the Government’s share of funding the railways will have fallen to just 20 per cent, down from 38 per cent in 2009.

The report also said that revenue from fares had increased from 54 per cent of overall funding for the railways in 2009 to 66 per cent today and was forecast to grow to 69 per cent by 2018.

Credo worked out that if fares were frozen in line with RPI inflation from now until 2018/19 they would still be significantly ahead of growth in average earnings since 2009/10.

However, if fares were frozen in line with the CPI rate on inflation from 2015, then average earnings would nearly have caught up with growth in fares by 2018/19.

The report said that between 2008 and 2013 the cost of a weekly season ticket from Reading in Berkshire to London (including a Travelcard which allows for bus and Tube travel in London) had increased by 25 per cent while average take-home pay has risen by just 9 per cent.

It said this was based on average London earnings in 2013 of £34,895, resulting in take-home pay of £26,539.

The report said this meant someone on average London salary and commuting from Reading would now be paying 22 per cent of their take-home pay in transport.

CBT chief executive Stephen Joseph said: “Rail fares have been rising faster than wages for a decade now, putting ever more strain on household costs.

“What this report shows is that by the next Parliament income from fares will not only cover the entire running costs of the railways, the Government will actually begin to start profiting from passengers.”

He went on: “The Government must re-examine its fares policy as a matter of urgency and commit to a fairer system in line with the consumer price index so that fares only rise in line with wages.”

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  • nickthompson  |  January 02 2014, 12:39PM

    Could making the user of a particular service pay for it be a new initiative by the Tory's rather than it being partly subsidised by the tax payer, I hope not, this idea could be adopted for user's of Library's, Home helps, and dozens of other services we all help to pay for, and THANKFULLY only some of us need?

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