Debate Magazine

Economic Myths: "Rail Unions Blamed for Rising Train Fares"

Posted on the 06 December 2017 by Markwadsworth @Mark_Wadsworth

Via MBK, fimsy excuse of the week from The Times. The only actual hard facts in the article to back up that claim are:
However, in a direct challenge to Britain’s powerful rail unions, The Times understands that ministers will only consider the move to CPI if unions lower their wage demands. RPI is currently used to calculate pay rises and last year staffing costs on the railway reached more than £2.8 billion.
That £2.8 billion figure is meaningless unless you compare it with total revenues of their employers, which appear to be about £10 - £11 billion according to this.
That doesn't seem disproportionate to me. All things being equal, whether rail worker salaries go up by CPI or RPI should not have any major effect on ticket prices, which are set by demand (supply being largely fixed), regulations (price caps) and subsidies.
Whether rail companies are fundamentally over-staffed, or even under-staffed is a separate topic.


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