New research has revealed that continued rail revenue growth could result in passengers effectively being charged a ‘rail tax’, equivalent to an income tax of up to 5 per cent for commuters or £7.50 per intercity journey, with an ever growing percentage of income from fares transferring directly to the Government.
The new report into the future of rail financing, “Future Rail Funding: Passenger Opportunities, prepared by consultants Credo for Campaign for Better Transport, has found that government income from rail franchise premiums could increase to up to £3.7bn by 2020, driven by passenger growth and improved cost management.
Campaign for Better Transport is calling for this windfall to be reinvested back into the railways by providing better ticketing for passengers, including flexible season tickets for part time workers, which the Government committed to trial in its rail fares and ticketing review.
“This new research shows that even under conservative estimates there should be plenty of money coming in from the rail franchises for the Government to fund the commitments it made two years ago to develop fairer fares," sayd Campaign for Better Transport chief executive Stephen Joseph.
“With many commuters already having to fork out thousands of pounds a year on rail season tickets to get to work, it is no wonder that they are fed up with the value that they are getting. It is time that the Government committed to using their rail income to make good their promises for fairer fares, including a nationwide scheme of flexible ticketing for part time workers, or avoiding further cuts in transport spending, rather than sending it into the Treasury.”
The report modelled three financial scenarios which take into account increasing levels of growth in passenger revenue and a reduction in running costs through more efficient management.
The report also found that:
The report recommends these initiatives could include: