Rail fare rises '21 - up by 2.6% but not until March

[whole diary]

[broadgage]

In todays budget, the planned increase in road fuel duty was dropped, as has happened previously.

The government regularly speak of the need to green the economy, yet every year rail travel becomes more expensive, whilst road transport becomes cheaper.

[ChrisB]

That’s now a decade that fuel duty has been held without rising!

[CyclingSid]

the planned increase in road fuel duty was dropped

In my simplistic view of things I would have thought now would have been a good time to increase road fuel duty, to nudge drivers towards the greener alternatives that are supposed to happen by the end of the decade. Or is that another agreement that will be dropped?

[grahame]

That’s now a decade that fuel duty has been held without rising!

Average (petrol) cost 119p / litre
I've seen quote that duty + VAT^▸ (Value Added Tax) add up to 60% of (petrol) fuel costs.
Prices in general have gone up by 31% in the last 10 years
A typical car burns 7 litres per 100 km
The average car is driven 7400 miles per year. x 8 / 5 to get kms
There are 33 million cars on the road

>>> 119 * .6
71.39999999999999
>>> 72 * .31
22.32
>>> 22.32 * 7
156.24
>>> 74 * 8 / 5 *156.24
18498.816000000003
>>> 185 * 33000000
6105000000
>>>

So (at current rates) just over 6 billion pounds per annum is reduced off what the income would have been from fuel duty and VAT compared to what it would have been if these taxes had been inflation linked.  Put another way, if you're an average petrol car driver, you're saving £185 pounds per year.

Figures are, or course, very roughly calculated indeed ...

[ChrisB]

Prices in general have gone up by 31% in the last 10 years

Maybe, but fuel hasn't....

2011: petrol 133.65p, diesel 138.94p.

Actually dropped in price by nearly 10p/litre

[grahame]

Prices in general have gone up by 31% in the last 10 years

Maybe, but fuel hasn't....

Indeed - that's very much in confirmation of the analysis.  Fuel prices have been held down to some extent (the majority, as most of the price is tax) by tax policy and tax not rising in line with inflation.  We could have a real 'game' here playing with stats by the conclusions will almost inevitably be **1 that billions of pounds that the exchequer could be collecting from the motorist are not being collected, **2 that government policy has helped in no short measure in making driving private cars with fossil fuel engines more attractive in real terms compared to ten years ago, and **3 that the signal given by the freezing of duty is that government support for zero carbon is patchy at best.

[broadgage]

And of course quoted fuel prices are genuinely representative, being the average price actually paid at a number of filling stations.
Train fares are arguably less representative since they only include the regulated fares. Actual fares have increased by greater percentages in many cases.
Examples include  altering the boundary between peak and off peak fares such that more peak fares are paid.
And increasing unregulated first class fares by a lot more than the average.

There is also a general view that trains have in many cases got worse, with worse overcrowding, reduced reliability and inferior on board facilities.

Cars on the other hand have got cheaper and better specified, AS WELL as using cheaper fuel.

[IndustryInsider]

I don’t disagree with some of Broadgage’s points, but it should also be said that Advance purchase tickets becoming much more widely available have reduced prices prices in real terms at certain times of the day, and on many routes a more frequent, and in some cases faster, service now operates of course.

On the roads, traffic has generally increased leading to longer and less predictable journeys in many cases, with improvements to the road network only partly compensating.  So, swings and roundabouts in some respects.

[TaplowGreen]

Prices in general have gone up by 31% in the last 10 years

Maybe, but fuel hasn't....

Indeed - that's very much in confirmation of the analysis.  Fuel prices have been held down to some extent (the majority, as most of the price is tax) by tax policy and tax not rising in line with inflation.  We could have a real 'game' here playing with stats by the conclusions will almost inevitably be **1 that billions of pounds that the exchequer could be collecting from the motorist are not being collected, **2 that government policy has helped in no short measure in making driving private cars with fossil fuel engines more attractive in real terms compared to ten years ago, and **3 that the signal given by the freezing of duty is that government support for zero carbon is patchy at best.

Do you think that the fall in the price of oil may have something to do with cheaper petrol?

[broadgage]

Yes of course falling oil prices are one reason for cheaper petrol, but that should be a reason to increase fuel duty, not to freeze it for years.

In my view road fuel should be increased in price by AT LEAST the same percentage as rail fares.
If we are serious about the climate emergency, then petrol/diesel should increase in price at a greater rate than train fares.

We cant end road transport overnight, but a start could be made by increasing fuel duty.

More expensive fuel also improves road safety, as drivers tend to slow down to save fuel.

[TaplowGreen]

Yes of course falling oil prices are one reason for cheaper petrol, but that should be a reason to increase fuel duty, not to freeze it for years.

In my view road fuel should be increased in price by AT LEAST the same percentage as rail fares.
If we are serious about the climate emergency, then petrol/diesel should increase in price at a greater rate than train fares.

We cant end road transport overnight, but a start could be made by increasing fuel duty.

More expensive fuel also improves road safety, as drivers tend to slow down to save fuel.

Fuel duty is hugely inflationary as most goods are transported through road haulage, so raising it would have a big impact on everyone including (disproportionately) the poorest.

Given where we are just now, not in your future fantasy world where road transport has been ended,do you really think that's such a good idea?

[broadgage]

The government needs to raise money to pay for public expenditure in general, and for the costs of the pandemic in particular.
I would consider fuel taxes to be preferable to alternatives such as an increase in the VAT^▸ (Value Added Tax) rate, or in income tax, or other general taxes.
Taxing road fuel would encourage alternatives such as walking, cycling, electric vehicles, buses and railways.

Present and recent past government policies are having the effect of deterring rail travel due to the ever rising cost, and encouraging road transport as it becomes cheaper. Should be the other way around in my view.

[TaplowGreen]

The government needs to raise money to pay for public expenditure in general, and for the costs of the pandemic in particular.
I would consider fuel taxes to be preferable to alternatives such as an increase in the VAT^▸ (Value Added Tax) rate, or in income tax, or other general taxes.
Taxing road fuel would encourage alternatives such as walking, cycling, electric vehicles, buses and railways.

Present and recent past government policies are having the effect of deterring rail travel due to the ever rising cost, and encouraging road transport as it becomes cheaper. Should be the other way around in my view.

As you seem to have shifted from the need to "green the economy" to a need to raise money to pay for "public expenditure in general", you may wish to consider that the most effective way to do that is via income tax, which is progressive and raises far, far more money very quickly and easily, without being inflationary or unfairly penalising the poor.

[broadgage]

I have not shifted from a "need to green the economy" but mentioned the general need for HMG to raise revenue as an ADDITIONAL reason to tax road fuel, in addition to taxing a polluting transport choice.

New registrations of petrol or diesel burning cars are to be prohibited in not that many years time, so we should perhaps be discouraging use right now.
I would like to see a relatively modest annual increase in road fuel prices. Perhaps about 2% over the inflation rate. If oil prices fall, then increase the tax such that the retail price rises by about 2%. If oil prices increase moderatly, then impose a smaller tax rise such that the retail price still rises  by about 2%. If oil prices increase greatly, then freeze the tax.

Rail fares by contrast should not in my view increase by more than the inflation rate.
There is a general public perception that rail fares are hugely costly and also very complicated. The actual fare payable is often considered to be a matter of luck rather than being determined by a logical process.

I have previously proposed a great simplification of fares, with only three different fares payable for any particular journey.

I see no merit whatsoever in allowing discounted travel on services known to be overcrowded, simply becuase the ticket was purchased weeks in advance.
I likewise see no merit in charging a punitively high fare for last minute travel on a lightly used service.

[TaplowGreen]

I have not shifted from a "need to green the economy" but mentioned the general need for HMG to raise revenue as an ADDITIONAL reason to tax road fuel, in addition to taxing a polluting transport choice.

New registrations of petrol or diesel burning cars are to be prohibited in not that many years time, so we should perhaps be discouraging use right now.
I would like to see a relatively modest annual increase in road fuel prices. Perhaps about 2% over the inflation rate. If oil prices fall, then increase the tax such that the retail price rises by about 2%. If oil prices increase moderatly, then impose a smaller tax rise such that the retail price still rises  by about 2%. If oil prices increase greatly, then freeze the tax.

Rail fares by contrast should not in my view increase by more than the inflation rate.
There is a general public perception that rail fares are hugely costly and also very complicated. The actual fare payable is often considered to be a matter of luck rather than being determined by a logical process.

I have previously proposed a great simplification of fares, with only three different fares payable for any particular journey.

I see no merit whatsoever in allowing discounted travel on services known to be overcrowded, simply becuase the ticket was purchased weeks in advance.
I likewise see no merit in charging a punitively high fare for last minute travel on a lightly used service.

Broadgage do you get the principle that if you discourage someone from buying something by making it more expensive to the point that they reduce or stop, your revenue falls?

Do you also understand that this is not just about cars?

It's about the haulage industry that transports virtually everything we need in this country, and that by increasing their costs you will create inflationary pressure that reduces the purchasing power of money for everyone, including Government but especially affecting the poor on lower and/or fixed incomes?

That was the point of my earlier post, which you have either ignored or perhaps not understood.

Do you understand that our fuel duty on diesel is already way higher than the European average? and that many EU^» (European Union - about) countries even provide rebates to hauliers, which in turn means British hauliers are less competitive?

Do you also realise the effect this has on businesses, and that ultimately people will have less money to spend on (for example) rail journeys?

You seem to like to see things in very one dimensional, black and white terms, whether it's road or air travel (or buffets!) but unfortunately it just ain't that simple.

Perhaps read a bit of Adam Smith with your Port tonight...............and consider how, when you've ended road transport, as is your stated aim, will that bottle of Cockburns get to your local Aldi without it?