Sad Piffle From The Guardian’s Helen Pidd On British Train Ticket Prices

Following the news that train ticket prices are to go up a little less than the rate of inflation in the new year The Guardian’s Helen Pidd decides that we should all be boycotting those very price rises. Because, you know, there’s nothing that screams equality like a senior newspaper executive insisting other, poorer, people pay for her commute now, is there? For that is what she’s doing:

Why I refuse to pay January’s unfair new train fares
Helen Pidd

So, what is the detailed analysis which leads to this call for a boycott?

There is only one thing for it. On 2 January, when the fares go up, we all need to refuse to pay the difference. A mass act of disobedience is all that will make these rail companies listen. Many stations outside major cities don’t have barriers. People can just board their trains as usual and offer the conductor the old fare. (Have exact change to make things nice and easy.) John Parker Lee, a photographer in Manchester, told me he got so fed up with delays a few years ago that he started offering 80% of the fare. The conductor never argued back. “If everyone started paying what the service is worth, and not what it demands, the network would be reformed in months,” he said.

Well, there’s this:

Now, Northern Rail – a subsidiary of Arriva, which is owned by Deutsche Bahn, the German national railway – will tell you that it is phasing out Pacers, with the last one going to railway heaven by the end of next year. It will tell you it is investing unprecedented amounts in new trains, improved trains, better stations and more services. But last year Deutsche Bahn made a net profit of €716m (£638m). Why can’t it invest those profits to keep our rail fares low?

Gosh yes.

German rail operator Deutsche Bahn swung to a net profit last year thanks to cost savings, according to company documents seen by Reuters on Thursday. The state-owned company posted a net profit of 716 million euros ($768 million) for 2016 after writedowns on its rail freight business and restructuring costs led to a 1.3 billion euro loss a year earlier, the documents showed.

The profits made by trundling Germans around Germany – along with hefty subsidies from the German taxpayer for doing so – should be spent on train sets for a privileged Englishwoman. Yes, we can all see the logic of that, can’t we? But come on, this is someone on The Guardian’s staff, we know it’s going to get worse than that:

Rail passengers have long paid over the odds for reliably shoddy services, with commuters on some routes paying six times more than their counterparts in France or Italy. But the pain is not spread evenly.

Actually, that pain is being put where it should be. British trains don’t cost any more to run than French or Italian ones. Rather less often enough in fact. It’s just that the costs of British trains are paid by the people who ride on British trains. Whereas in other countries those costs are paid by the general taxpayer, passengers paying only a fraction of the cost of the system. This is what Ms Pidd is demanding here too.

The Guardian pays quite well at the higher levels. Certainly, Ms. Pidd will be making more than the median income in the country, some £22,000 a year. Her demand is that other, poorer, people should pay tax so as to subsidise her gallivanting around on the railways. How sick and entitled is that?

And yes, worse again. For British train tickets are still too cheap:

Contrary to much wibbling around the place the British system of railways is not notably more expensive than those of other countries. Rather, the difference is in who pays for it all. Here, passenger ticket prices pay for some 99% of operating costs. In many other countries there is a substantial contribution from the general taxpayer. That’s what explains the difference in ticket prices. We think it’s just fine that those doing the travelling pay for the travel to be done. We do not see the point of taxing the dustman so that the Duke may go shooting. There are parts of the network which really do need subsidy – the commuter lines around the largest cities. They also get that subsidy. Other parts of the network make a profit and the two largely balance each other. This might not be perfect but we do indeed insist that it’s better than a general levy upon non-travellers to pay for those who travel. That tickets are still too cheap is proven by the manner in which only operating costs are being covered – capital costs still largely devolve to the taxpayer. This should not be therefore tickets should cost more.

Helen Pidd demands poor people subsidise for her train tickets. The rest of us should be insisting that Ms. Pidd pay for her own travel desires – before or after she goes boil her head being of little concern.

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Samarkand Tony
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Samarkand Tony

There is an inconsistency, though. Roads are funded by general taxation. Railways less so.

Also, it’s all needed to make London work. You can make a reasonable argument for meeting the costs of making London a good city to do business out of rates on London businesses and maybe taxes on higher earners who benefit from being in London.

On the other hand, you can also argue that all those people going to work are only going there because those businesses exist.

Maybe there’s a middle ground?

Jonathan Harston
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Jonathan Harston

Yes, roads are funded through taxation, but cars, buses, coaches, etc. aren’t.

Samarkand Tony
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Samarkand Tony

Effectively, they are. Wouldn’t be much use without any roads, and would be much more expensive to use if all roads were toll roads.

Quentin Vole
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Quentin Vole

All UK roads are toll roads. Only a few are explicitly so, in most cases the tolls are collected in fuel duty. The amount recovered by the government is greatly in excess of expenditure on road building and maintenance.

Samarkand Tony
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Samarkand Tony

They are most certainly not toll roads, although you could argue that the system as a whole is akin to a toll system. If they were, many minor roads wouldn’t exist, because they wouldn’t earn enough in tolls to justify building and maintaining them.

Fuel duty is part of general taxation, and road building and maintenance (as well as things like traffic laws and driving licenses) are paid for out of the same pot that funds everything else.

Quentin Vole
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Quentin Vole

I am arguing that the system is akin to a toll system. I pay a fee for each mile I drive in the form of fuel duty (which goes into general taxation, but is more than enough to cover all road costs, plus a hefty Pigou tax on top. And drivers of trucks, buses and gas-guzzlers pay more per mile than those with small cars, while electric cars pay far less; which is (presumably) what the government wants to be the case.

Samarkand Tony
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Samarkand Tony

It is indeed somewhat akin to it, viewed as a whole. It is not a lot like it when you look at individual roads.

The important difference here, though, is that the tax money spent on roads is not linked to the tax money raised from roads. They’ve tried to make it look like it is, because that’s politically advantageous, but really there’s no link.

Q46
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Q46

‘Road are funded by general taxation.’

Then what is the Road Fund Tax for, (clue in the name) paid by everyone (with a few exceptions) who runs a vehicle on a public road? And then there is motor fuel excise duty, green tax and VAT.

My understanding is a large part of the Road Fund Tax goes to general tax along with the fuel taxes to fund such marvels as the World Class NHS.

Samarkand Tony
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Samarkand Tony

The road fund tax is ‘for’ taxing drivers of cars a bit extra without too many complaints. The money all goes into a central pool, and becomes part of general taxation. It is purely fortuitous that fuel duty revenues and so-on are far higher than the costs of the road system on a country-wide basis. Of course many busy roads ‘earn’ far more from the tax on the fuel used to travel on them than the cost of building and maintaining them. And minor roads cost far more than the taxes raised from using them. I don’t think this arrangement… Read more »

Jonathan Harston
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Jonathan Harston

There’s no such thing as the Road Fund Tax, and has not been since about 1930. There is Vehicle Excise Duty which is tax on owning a vehicle. All UK taxes (except the TV license) goes into the single central treasury pot.

Quentin Vole
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Quentin Vole

And we have to put up with this piffle twice – once in summer when the increase in fares is determined, and then again in winter when it’s implemented. (Having looked at the linked ASI article, I see Tim has already made this point – great minds, eh?!)