Warning: Strap hanging still shaves a quarter off your wage. What would Borgen do?

I’m feeling so lethargic after all those seasonal festivities that I can’t quite find my mojo to write a new post just yet. So how lucky is this? I don’t have to write a new post at all! Here’s one I prepared earlier. Exactly one year ago, in fact. I promise you won’t even spot the join!

To be fair, the Powers that be cunningly judged that, being ever closer to those pesky elections, they’d best lower fare increases to just match inflation but, as real wages have practically ossified, it doesn’t make a blind bit of difference.

Call-me-Dave’s spin-drier could just have told the Romanians and Bulgarians about the price of a commute and our migration figures would be sure to end up in the negative.

So, here’s my totally recycled blog, reminding us all just how ‘Alice in Wongaland’ our UK rail fare structure is, compared with those in the rest of Europe.

MY-ANNUALLY-RECYCLED-STILL-TOTALLY-RELEVANT-BLOG-POST:

Happy New Year Britain! Stand by for more cuts! cuts! cuts! Except in rail fares. There it’s a case of Let the Train Drain you Dry. As part of the festive fireworks, rail fares exploded by 4.3% [=2013, 2.8% = 2014] so, if you are privileged enough to have a job at all, you can kiss good-bye to up to a quarter of your pay packet just to get you there.Image

A Season ticket will cost as much as 23% of gross salary or, put another way, you’ll effectively have to work till April Fools’ Day for nowt. Supreme irony or something else? You decide.

Even train spotters’ favourite, Michael Portillo, appears to have been priced off UK Rail. In the teeth of recent BBC budget travails, Michael’s much loved Great British Railway Journeys have transmogrified into a collection of rail journeys “across the heart of Europe“, no doubt slashing his programme budget by half at a stroke. Nice one Michael.

Accentuating the positive, we in the UK can at least now claim to come top of something in Europe; public transport pricing.

So how do those annoying continentals do it?

Well, for a start, between 80% and 100% of passenger train services are provided by the public sector, making profits less of an issue. The result is this chart, which compares average UK passenger rail fares with other European countries (the squeamish among you, look away now):

Pence per kilometer

Day Return Season Ticket Long Distance
UK 26 14 49
Germany 17 8 28
Switzerland 15 4 39
Netherlands 13 8 34
Sweden 13 6 21
Italy 12 4 22
Spain 9 7 24
France 8 8 15

Source: Just Economics (2011) analysis of data from Passenger Focus (2009)

So, in the interest of Joe Public: What Would Borgen Do?

Just to recap: Borgen is the pet-name for Christiansborg, a castle in Copenhagen and seat of the Danish Parliament, the ‘Folketing’ or ‘People Thing’ [scan that past your synonymeter for a moment]. And, sad but true, not even Denmark is immune to the current financial omnishambles. Borgen controls the railways in Denmark and Borgen’s hiking the fares. By 3.1%.

Image

The most expensive annual season ticket in the country will now rocket to 13,364 Kroner or £1458 or 3.47% of average gross income (DKK383K = GBP42K). To hammer home the point the example used is the most expensive season ticket theoretically available, just for fun, but actually, the average Danish commute would most likely run to around 320 Kroner (£35) a month, in Copenhagen,  the most expensive area in which to move about. The maths conclude that’s DKK3840 per annum = £418, or roughly 1% of gross annual income.

ONE PER CENT ?!  What the  #*@&?!

Ok you say, but Borgen does benefit from charging its citizens a king’s ransom in tax, with which to subsidise public utilities like railways. But it also gives some of this back, in that commuting over 24 kilometers/day receives a DKK 1.90 per kilometer tax deduction. For commutes longer than 100 kilometers per day, the rate is reduced to DKK 0.95 per kilometer. In any case, the Danes seem to prefer to service their tax wedge up-front. It makes day-to-day budgeting far less time consuming for the average household, who’s busy having a good time.

Private rail companies are welcome to compete for business on minor routes with the public rail company, but are bound by the Ministry’s pricing policy. About 50% of the Danish State Railways’ funds come from fares, the other 50% come from the State.  In contrast, the UK government subsidises rail up to about 20%  leaving passengers to foot 80% of the bill.

In fact, it seems, bizarrely, that UK subsidies have gone up since the breakup of  British Rail, rather than down, which presumably was the intention? That, coupled with sky rocketing ticket prices has, however, guaranteed a nice bonus for shareholders.

DSB’s continued largesse, amid the current economic gloom, has meant that last year, the company was uncharacteristically out of pocket to the tune of DKK500 million – but they’re working on it. Current cost-saving measures include streamlining DSB’s procurement processes and outsourcing IT and cleaning services. The company’s Copenhagen headquarters is also up for sale. Note that fares are not targeted.

But back home in Blighty we’ll dutifully queue up at the ticket window and hand over our shrinking pay packets. And only a year after the McNulty report warned that the costs of rail in Britain remain sky-high – up to £3.5bn more than they ought to be, Network Rail again announced a doubling of profits from £313m to £754m.

The Fat Controller must be laughing all the way to the bank.

And who’s the April Fool?

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s