British Commuters subsidising World Fares!

[AgnesIO]

Soaring rail profits are used to cut fares abroadhttp://metro.co.uk/2013/04/02/soaring-rail-profits-are-used-to-cut-fares-abroad-3567491/


High fares paid by British commuters are subsidising rail travel across Europe – and even China – by millions of pounds.
The profits go to international companies often owned by other governments, which use the money to cut fares on their own networks.
As well as raking in expensive ticket prices, foreign train firms shared in a net subsidy of £2.7billion paid to train companies last year.
Shadow transport minister Maria Eagle said: ‘Many of these private companies are at least in part state-owned, so German, French and Dutch state railways – and a little bit of Hong Kong – are running franchises on our system from which they are making not only dividends and nice big pay packets but also profits.’

This in itself shows the issues with privatised railways. Many British fares rose by OVER 10% recently, which is not only clearly above inflation, and also paying for OTHER countries to have a cheaper rail service. Privatisation is all well and good, but it clearly is not working for the rail service.


Last year, it made £19million from its 45 per cent share in First TransPennine Express and £21million from its 35 per cent share in London Midland, Southeastern and Southern.
German government-owned Deutsche Bahn owns Arriva trains and buses, Chiltern railways, CrossCountry and helps run London Overground. It made a profit of £736million last year.

Clearly, the issue with ticket prices is NOT to do totally with inefficiency. Subsidies are not making the firms completely lazy, just look at the profits that are being generated! British commuters are a laughing stock, and international firms know it.

Other countries are subsidising their services, so why don't we? We subsidise our service by £4Bn per year, whilst France is subsidising theirs by £9Bn. I have nothing against these subsidies being reduced, as it could increase efficiency which will therefore reduce costs. However, if the subsidies remain, there is NO way ticket prices should be increasing.

[Ardemax]

Our railway network is a joke. Out of the MEDCs in the world, we have to be pretty far down on the list in terms of train service quality.

[-:Undertaker:-]

I'm sceptical of claims such as this, as it doesn't take into account circumstances in those countries. If the railway network in China managed to make cost cutting savings of 1/4 and the London Underground then lowered it's prices by 50p - would the same be said that China is subsidising our railway?

For railway companies, it doesn't make sense to be subsidising one part of a business thats failing at the expense of one thats doing well - unless of course its in the contract with the government. So again, an example of why state involvement only makes things worse.

It's the same with bus services, when granting contracts the government says to the bus companies - you are not getting this contract unless you agree to service the unprofitable X, Y and Z routes. The company of course agrees, although these costs will then be added onto the normal bus service price of a ticket.


Other countries are subsidising their services, so why don't we?

Where is the money coming from?

[FlyingJesus]

"The profits go to international companies often owned by other governments, which use the money to cut fares on their own networks."

As in, a private business chooses its own prices in the various countries that it works in for a range of different services, mainly at the cost of the customers and not the public at large, therefore only affecting those who choose to use it for it the most part. Christ how terrible