Paying the cost for a false market in train travel

Last week, I indicated how unimpressed I was with the way that our railways are run. I suggested that;

"Naturally, if off-peak passenger numbers fall, the Train Operating Companies will use that as an excuse to cut off-peak services."

Yesterday came reports that only reconfirm my fears. Dan Milmo and Tim Webb, reporting in the Observer, warn that rail and bus services are under threat due to collapsing passenger numbers. Now I find myself wondering whether or not increasing fares by at least 6% when inflation is at 4% and falling, hundreds of thousands of people are losing their jobs and, worst of all, the cost of using a car has dropped substantially in recent months, was such a great idea.

It's all very well the likes of National Express, Stagecoach and First Group pleading that they were only doing what they were permitted to, but they signed up to a contract, and now they don't like the consequences. The franchises that they signed, giving them for the most part a monopoly on rail travel, allowed them to, in some cases, receive huge subsidies in the early years of their deals, with reductions in later years before switching to net payments.

They bid for the franchises on the basis that they would still make money. Nothing wrong with that, if it provided an incentive to run more trains, provide better service and support the switch from private transport to public. However, the clamour to renegotiate means that we, the public, get to pay more through the public purse to support the railway and, better yet, pay more for our fares too. A double whammy, methinks.

If the cost of travelling by train had been relatively low, this might not have been so unwelcome, but in a country with the highest fares in Europe, and where the railways are supported to the tune of £4.5 billion per annum already, is it any wonder that demand is proving to be somewhat less than elastic?

The United Kingdom has one of the most bizarre arrangements for running its railways to be found anywhere. Restrictive practices, including barriers to new entrants to the market, seem to work against the interests of those of us who use the railways. Some of us have little choice, I admit, but to drive away those who do is likely to have serious ramifications for all of us over time...