Remember all that talk about how rail privatisation cost us all a fortune? You know the thing, there were private companies in there, making a profit, stands to reason, dunnit, that we all get screwed by the capitalists.
So, clearly, everyone is just overjoyed that the franchises are now renationalised. No one does make a profit, they gain a couple of percent of revenue as an operating fee and that’s that. So, we’re all better off, right?
The government took over rail franchise agreements from train operators in March, following the collapse in demand for travel caused by the virus crisis. This is expected to have cost about £10bn by mid-2021.
Oh. Maybe not. Even in government £10 billion is real money. So, who has to pay this?
Rail fares will rise more than expected next year – although the new inflation-busting 2.6% increase is being delayed until 1 March.
Regulated fares were expected to increase by 1.6% in January, as successive governments linked annual rises to July’s RPI inflation rate.
Rail minister Chris Heaton-Harris said the rise reflected “unprecedented taxpayer support” for rail this year.
So consumers are going to have to pay the price for the renationalisation then. It appears that the original story of capitalist ripoff wasn’t quite, wholly, and exactly, true.
Still, there is a joy here still:
But unions said the rise was “plain daft” and would deter travellers.
Supply and demand still work then. Rising prices reduce demand. We should recall that next time a union asks for a pay rise. It does mean a reduction in demand for the services of those now to be higher paid, doesn’t it?