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Subsidy in the UK compared to Other Countries

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WatcherZero

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Moderator Note - split from

In 2008 total Government support was £8.053bn
In 2022 it was £21.1bn


The subsidy per passenger km in Britain is now 22.9p per passenger km, ranging from 18.2p in the Southern rail region to 39.3p in the Scotland region. While fare revenue per passenger km ranges from 22.6p on the Elizabeth line to 12.1p on LNER and 8.6p on Merseyrail at the bottom. Scotrail in particular 12.9p from the farebox and 34.0p from the government mean 72.5% of the journey is already subsidised.
 
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Krokodil

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In 2008 total Government support was £8.053bn
In 2022 it was £21.1bn


The subsidy per passenger km in Britain is now 22.9p per passenger km, ranging from 18.2p in the Southern rail region to 39.3p in the Scotland region. While fare revenue per passenger km ranges from 22.6p on the Elizabeth line to 12.1p on LNER and 8.6p on Merseyrail at the bottom. Scotrail in particular 12.9p from the farebox and 34.0p from the government mean 72.5% of the journey is already subsidised.
And how does that compare with other European countries?
 

WatcherZero

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Up until Dec 2021 which are the latest European figures published this year by the Independent Rail Regulators Group (figures include data from 27 countries including UK but excludes financial data from Belgium, Czech Republic, Denmark, Ireland, North Macedonia, Norway, Slovakia, Serbia and Switzerland):
Passenger numbers were still recovering to pre-covid down over 50% in Jan 2021 month on month with 2019 and just over 20% down by Dec 2021. The data is also not easily comparable as all the countries finance their railways differently (whether giving money primarily to TOC's like UK does, to the Infrastructure provider or another method). These are the figures that can be taken from the reports and are heavily influenced by the tail end of Covid, the EU also granted a 3 year break in Track Access Charge free market regulation from 1st March 2020 to 31st December 2023 so countries would not face sanctions for extra TAC subsidy via reducing access fee's.

Average revenue per passenger km (including subsidy) was 23.09 cents up from a fairly stable 19-20.7 cent band in the previous four years.
European total passenger revenue per passenger km in 2021 was 26.11 cents per passenger km up 89% from 13.80 since 2017
European total passenger revenue per passenger train km in 2021 was 23.09 Euros up 21% from 19.06 Euros in 2017.

Following table has share of fares in passenger service obligation revenue 2019-2021 (i.e. proportion of farebox that make up parliamentary services as opposed to purely commercial/open access at operators and excludes network support, you can see UK operators proportion of revenue coming from fares has dropped 14% over the period)
Figure 34 - Trends of RUs’ revenues from PSO services in 2021 compared with 2019
Country
Evolution of RUs' revenues from fares for PSO passenger services
Evolution of RUs' revenues from compensations for PSO passenger services
Share of fares in PSO revenue
Unit
%
%
percentage points
Year
2019-2021
2019-2021
2021/2019
AT - Austria​
6%​
-34%​
-17.7​
BE - Belgium​
2%​
-36%​
-4.9​
BG - Bulgaria​
-3.1​
HR - Croatia​
-13.5​
CZ - Czech Republic​
-9%​
-38%​
-2.8​
DK - Denmark​
-5%​
-34%​
EE - Estonia​
-13.0​
FI - Finland​
FR - France​
-5.9​
DE - Germany​
-4%​
-46%​
-13.6​
EL - Greece​
-10.7​
HU - Hungary​
7%​
-31%​
-8.0​
IE - Ireland​
-42.0​
IT - Italy​
-7%​
-51%​
-12.8​
XK - Kosovo**​
LV - Latvia​
6%​
-40%​
-3.0​
LT - Lithuania​
-5.7​
LU - Luxembourg​
-10.1​
MK - North Macedonia​
NL - Netherlands​
0%​
-50%​
-31.5​
NO - Norway​
-37%​
-64%​
2.6​
PL - Poland​
3%​
-27%​
-12.9​
PT - Portugal​
-5%​
-49%​
-33.9​
RO - Romania​
-15%​
-29%​
-10.6​
RS - Serbia​
-1.5​
SK - Slovakia​
-2%​
-51%​
SI - Slovenia​
-15.8​
ES - Spain​
-13.8​
SE - Sweden​
-3%​
-43%​
CH - Switzerland​
-1%​
-37%​
UK - United Kingdom​
-14%​
-60%​
-68.6​
All countries*
-4%
-44%

And this table has change in track access charges that Railway Undertakings (TOCs) are paying 2019 to 2021.
Figure 8 & 9 - Trends of TAC from passenger or freight RU and train-km in 2021 compared with 2019
Country
Evolution of TAC from passenger RU
Evolution of passenger train-km
Evolution of TAC from freight RU
Evolution of freight train-km
Unit
%
%
%
%
Year
2019-2021
2019-2021
2019-2021
2019-2021
AT - Austria​
3%​
3%​
-100%​
-1%​
BE - Belgium​
-49%​
0%​
-19%​
-8%​
BG - Bulgaria​
-15%​
1%​
-9%​
11%​
HR - Croatia​
-12%​
-11%​
4%​
7%​
CZ - Czech Republic​
-2%​
-1%​
5%​
-3%​
DK - Denmark​
0%​
7%​
-27%​
-11%​
EE - Estonia​
-100%​
0%​
-99%​
-3%​
FI - Finland​
-9%​
-11%​
9%​
0%​
FR - France​
-10%​
-3%​
-41%​
1%​
DE - Germany​
-19%​
2%​
-89%​
2%​
EL - Greece​
9%​
-25%​
59%​
12%​
HU - Hungary​
-1%​
7%​
-7%​
-5%​
IE - Ireland​
-1%​
-14%​
-29%​
93%​
IT - Italy​
-25%​
-9%​
-7%​
14%​
XK - Kosovo**​
LV - Latvia​
-74%​
1%​
-48%​
-47%​
LT - Lithuania​
-21%​
-17%​
-19%​
-7%​
LU - Luxembourg​
4%​
-2%​
-16%​
-15%​
MK - North Macedonia​
NL - Netherlands​
-7%​
0%​
20%​
-10%​
NO - Norway​
-11%​
-10%​
34%​
1%​
PL - Poland​
1%​
4%​
-2%​
-1%​
PT - Portugal​
-6%​
-3%​
-7%​
0%​
RO - Romania​
1%​
-9%​
5%​
-7%​
RS - Serbia​
-11%​
-8%​
-1%​
-3%​
SK - Slovakia​
-5%​
-7%​
0%​
1%​
SI - Slovenia​
1405%​
5%​
-19%​
5%​
ES - Spain​
-21%​
-21%​
-12%​
-7%​
SE - Sweden​
-19%​
-5%​
-42%​
0%​
CH - Switzerland​
-11%​
2%​
-17%​
-3%​
UK - United Kingdom​
3%​
-17%​
13%​
-1%​
All countries*
-13%
-4%
-37%
0%


For example you can see how much higher track access charges are in France!!!! (and again remember there was a holiday from free market regulation of TAC's)


Figure 13 - Track access charges paid by railway undertakings for the Minimum Access Package (in Euro per train-km) in 2021
Country
Total TAC paid by railway undertakings
Total TAC from public subsidies
Total Track access charges
Unit
Euro per train-km
Euro per train-km
Euro per train-km
Year
2021
2021
2021
AT - Austria​
1.63​
0.74​
2.37​
BE - Belgium​
4.15​
4.15​
BG - Bulgaria​
0.82​
0.82​
HR - Croatia​
0.73​
0.73​
CZ - Czech Republic​
0.84​
0.84​
DK - Denmark​
0.99​
0.02​
1.01​
EE - Estonia​
0.02​
2.92​
2.94​
FI - Finland​
0.97​
0.97​
FR - France​
8.07​
5.36​
13.43​
DE - Germany​
3.34​
1.65​
4.99​
EL - Greece​
2.10​
2.10​
HU - Hungary​
1.43​
1.43​
IE - Ireland​
4.49​
4.49​
IT - Italy​
2.41​
0.18​
2.60​
XK - Kosovo**​
0.00​
LV - Latvia​
5.26​
5.26​
LT - Lithuania​
10.84​
10.84​
LU - Luxembourg​
2.38​
2.38​
MK - North Macedonia​
4.09​
4.09​
NL - Netherlands​
2.12​
2.12​
NO - Norway​
1.14​
1.14​
PL - Poland​
1.82​
1.82​
PT - Portugal​
1.87​
1.87​
RO - Romania​
2.35​
2.35​
RS - Serbia​
1.45​
0.00​
SK - Slovakia​
1.47​
1.47​
SI - Slovenia​
0.72​
0.72​
ES - Spain​
5.67​
5.67​
SE - Sweden​
0.85​
0.44​
1.29​
CH - Switzerland​
5.06​
5.06​
UK - United Kingdom​
6.25​
6.25​
All countries*
3.63
1.00
4.64



Heres an older one from the 2017 data so pre-covid. Share of Passenger Train Operators revenue from the farebox vs operator subsidy. (so excludes infrastructure provider funding)
Country
Passenger operators' revenues per passenger train km
Passenger operators' revenues per passenger passenger km
Unit
Euro per train km
Eurocent per passenger km
Year
2016
2016
Austria​
16.67​
15.09​
Belgium​
n/a​
n/a​
Bulgaria​
5.49​
8.28​
Croatia​
5.69​
12.50​
Czech Republic​
n/a​
n/a​
Denmark​
n/a​
n/a​
Estonia​
n/a​
n/a​
Finland​
12.16​
9.65​
France​
33.77​
14.88​
Germany​
18.00​
15.34​
Greece​
11.08​
9.57​
Hungary​
3.28​
3.53​
Italy​
19.92​
12.34​
Kosovo​
6.83​
17.08​
Latvia​
12.60​
12.41​
Lithuania​
4.03​
5.94​
Luxembourg​
25.00​
44.38​
Republic of North Macedonia​
n/a​
n/a​
Netherlands​
17.83​
13.70​
Norway​
n/a​
n/a​
Poland​
7.50​
5.93​
Portugal​
9.02​
6.35​
Romania​
8.04​
9.78​
Slovakia​
n/a​
n/a​
Slovenia​
n/a​
n/a​
Spain​
18.03​
11.64​
Sweden​
12.36​
11.48​
Switzerland​
n/a​
n/a​
United Kingdom​
23.16​
17.93​
All countries*
19.37
13.96

Country
Share of passenger operators' revenues from fares
Share of passenger operators' revenues from compensations
Unit
% (based on passenger km)
% (based on passenger km)
Year
2017
2017
Austria​
52%​
48%​
Belgium​
n/a​
n/a​
Bulgaria​
20%​
80%​
Croatia​
36%​
64%​
Czech Republic​
n/a​
n/a​
Denmark​
n/a​
n/a​
Estonia​
n/a​
n/a​
Finland​
n/a​
n/a​
France​
62%​
38%​
Germany​
60%​
40%​
Greece​
55%​
45%​
Hungary​
77%​
23%​
Italy​
59%​
41%​
Kosovo​
64%​
36%​
Latvia​
36%​
64%​
Lithuania​
90%​
10%​
Luxembourg​
13%​
87%​
Republic of North Macedonia​
n/a​
n/a​
Netherlands​
95%​
5%​
Norway​
n/a​
n/a​
Poland​
49%​
51%​
Portugal​
99%​
1%​
Romania​
48%​
52%​
Slovakia​
n/a​
n/a​
Slovenia​
n/a​
n/a​
Spain​
72%​
28%​
Sweden​
n/a​
n/a​
Switzerland​
n/a​
n/a​
United Kingdom​
102%​
-2%​
All countries*
71%
29%


And Track Access Charges per passenger km.

Country
Track access charges for passenger services
Track access charges for freight services
Percentage of Track Access revenue from Passenger ServicesPercentage of Track Access revenue from Freight Services
Unit
Euro per train km
Euro per train km
% %
Year
2017
2017
20172017
Austria​
2.35​
2.61​
67%33%
Belgium​
8.17​
2.48​
95%5%
Bulgaria​
0.67​
1.73​
51%49%
Croatia​
0.54​
1.06​
59%41%
Czech Republic​
0.58​
2.13​
49%51%
Denmark​
1.06​
4.06​
84%16%
Estonia​
n/a​
n/a​
0%0%
Finland​
0.51​
2.14​
36%64%
France​
8.94​
2.30​
96%4%
Germany​
5.19​
3.00​
84%16%
Greece​
1.33​
1.78​
90%10%
Hungary​
1.40​
n/a​
0%0%
Italy​
3.22​
2.04​
92%8%
Kosovo​
n/a​
n/a​
0%0%
Latvia​
6.47​
10.36​
94%6%
Lithuania​
2.17​
21.16​
31%69%
Luxembourg​
1.96​
1.92​
94%6%
Republic of North Macedonia​
n/a​
n/a​
0%0%
Netherlands​
1.75​
3.25​
89%11%
Norway​
0.65​
0.62​
80%20%
Poland​
1.53​
3.14​
49%51%
Portugal​
1.96​
1.33​
88%12%
Romania​
1.93​
2.96​
65%35%
Slovakia​
1.51​
1.81​
65%35%
Slovenia​
0.01​
1.01​
1%99% (explains that massive increase in Slovenia TAC recently)
Spain​
4.67​
0.28​
99%1%
Sweden​
0.99​
1.58​
68%32%
Switzerland​
6.01​
5.68​
88%12%
United Kingdom​
3.94​
2.15​
97%3%
All countries*
4.17
2.81
87%13%


 
Last edited:

redreni

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Thanks for the additional data, Watcher.

I won't bore everyone with my views about what the subsidies ought to be. I would just observe that any claim along the lines of "the fares will have to rise unless we make cuts" would take quite a lot of backing up, since the implication is not only that we shouldn't fund the service in other ways, but that (for some reason) we actually couldn't do so even if we wanted to.

Any discussion of whether we should or shouldn't subsidise the railways more inevitably spills over into discussions about wider economic and social benefits of rail subsidy compared to other things that public money could be spent on. In this thread I will confine myself to pointing out that increased subsidy is a realistic option and, therefore, raising fares faster than wages is not inevitable.

I defy anyone to look down that second chart, where the share of revenues from fares vs compensations is shown and where the UK is a clear outlier, and say it wouldn't be possible for the UK to hold fare increases below wage increases if it wanted to.
 

LNW-GW Joint

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It's a long-time Treasury policy, going back to Labour years, for the taxpayer support to the railways to reduce compared to the farepayer contribution.
From memory, the figure was roughly 50-50 and the intention was that it should be more like 33-66.
That is what drove the RPI+2% fare increases for many years, along with franchise contracts that drove increased revenue.

Austria and Germany, of course, now have increased subsidies to fund their Klimaticket and Deutschlandticket initiatives.
It's not obvious they can afford these schemes long term.
 

yorksrob

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Ultimately treasury shouldn't be driving policy - it's not its job.
 

HullRailMan

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Let hope that the next time our overpaid rail staff are on strike they reflect on how much people on significantly lower wages are subsidising them via taxes. I won’t hold my breath.
A wider question is how rail subsidy is justified verses buses - buses carry far more passengers yet get a fraction of the money rail enjoys and have been in decline for years.
 

johnnychips

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Let hope that the next time our overpaid rail staff are on strike they reflect on how much people on significantly lower wages are subsidising them via taxes. I won’t hold my breath.
A wider question is how rail subsidy is justified verses buses - buses carry far more passengers yet get a fraction of the money rail enjoys and have been in decline for years.
What a strange argument. Teachers and NHS workers’ wages, for example, are 100% paid for by ‘subsidy’, and that doesn’t - and shouldn’t - stop them seeking better remuneration, terms and conditions.
 

yorksrob

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A wider question is how rail subsidy is justified verses buses - buses carry far more passengers yet get a fraction of the money rail enjoys and have been in decline for years.

Buses do a different job. They're great for hopping to the next town to do the shopping. Not so good for visiting friends or family one or more county away.
 

Sonic1234

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A wider question is how rail subsidy is justified verses buses - buses carry far more passengers yet get a fraction of the money rail enjoys and have been in decline for years.
Rail is the only mode that can possibly get the middle classes out of the car. A large number of people will never consider using a bus.
 

Adrian1980uk

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Rail is the only mode that can possibly get the middle classes out of the car. A large number of people will never consider using a bus.
And the only mode that can mass move people, 1 train load into London approx 10 busses, think of the impact on the road network
 

dan5324

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Buses do a different job. They're great for hopping to the next town to do the shopping. Not so good for visiting friends or family one or more county away.
Errr. National Express, megabus flixbus, Oxford tube etc etc ,
 

dan5324

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Rail is the only mode that can possibly get the middle classes out of the car. A large number of people will never consider using a bus.
Err. Isn’t it the middle classes that mainly use trains. I doubt many working class are regular travellers. They’ll be the ones driving. And that isn’t going to change.
 

Oxfordblues

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My concern is the massive hidden subsidy to the road industry. You can drive by motorway from North London to Carlisle without once encountering a toll-booth. With one exception they're all freeways. Experience with the M6 Toll has been that direct charging for motorway use is a major disincentive and if road pricing were to be introduced elsewhere it would lead to significant modal shift to rail.
 

RailWonderer

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Rail is the only mode that can possibly get the middle classes out of the car. A large number of people will never consider using a bus.
What has class got to do with it? A lot of working class use trains and probably even a few upper class people too.
Err. Isn’t it the middle classes that mainly use trains. I doubt many working class are regular travellers. They’ll be the ones driving. And that isn’t going to change.
This makes no sense at all.

On the subject of fare subsidy, many European countries increase subsidy as a policy to increase rail travel, i.e. in Ireland after the Covid pandemic. The UK has never had such policy, because the railway is better used per head of the population than in other countries and rail use has massively increased in recent years and bounced back very quickly post pandemic. Also coverage of rail as well as frequency and reliability is very good in Europe so not as much of a need.
 

JamesT

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My concern is the massive hidden subsidy to the road industry. You can drive by motorway from North London to Carlisle without once encountering a toll-booth. With one exception they're all freeways. Experience with the M6 Toll has been that direct charging for motorway use is a major disincentive and if road pricing were to be introduced elsewhere it would lead to significant modal shift to rail.
Are you forgetting the various taxes and duties on motoring? It’s hardly free to drive.
Rail makes up a tiny fraction of journeys, is there capacity for significant modal shift? Other threads mention services being full and standing, where would the hordes of ex-drivers go?
 

yorksrob

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Errr. National Express, megabus flixbus, Oxford tube etc etc ,

All important in their own way, but very much niche products. The various coach companies couldn't transport the volumes of people longer distances that the railway does.
 

Krokodil

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Are you forgetting the various taxes and duties on motoring? It’s hardly free to drive.
Peanuts. Doesn't cover the whole cost to society. Unfortunately when considering whether or not to drive, Joe Bloggs has already written off the cost of depreciation/tax/insurance/maintenance etc. as a sunk cost and will just compare the rail fare to his fuel bill.

Rail makes up a tiny fraction of journeys, is there capacity for significant modal shift? Other threads mention services being full and standing, where would the hordes of ex-drivers go?
Modal shift needs to head towards more active travel. Hence the push towards walkable neighbourhoods so that you can go about your daily business on foot.
 

slowroad

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Peanuts. Doesn't cover the whole cost to society. Unfortunately when considering whether or not to drive, Joe Bloggs has already written off the cost of depreciation/tax/insurance/maintenance etc. as a sunk cost and will just compare the rail fare to his fuel bill.


Modal shift needs to head towards more active travel. Hence the push towards walkable neighbourhoods so that you can go about your daily business on foot.
Active travel can make only a minimal contribution to mobility. As discussed on another thread, such journeys are short, hence contributing very little to total distance travelled, and any increase would often come from bus and car passengers rather than car drivers. So any reduction in traffic would be tiny. New dwellings are a tiny fraction of the stock, so we are basically stuck with the settlement pattern we have got. And even where people have local amenities and jobs, they would often prefer to travel for better facilities / opportunities.
 

HSTEd

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My concern is the massive hidden subsidy to the road industry. You can drive by motorway from North London to Carlisle without once encountering a toll-booth. With one exception they're all freeways. Experience with the M6 Toll has been that direct charging for motorway use is a major disincentive and if road pricing were to be introduced elsewhere it would lead to significant modal shift to rail.
Road costs are more than paid for by £25bn a year in fuel duty obtained from sales of road fuel, plus several billion more in VAT on just that duty.

Rail obtains diesel at far lower cost than road freight operators.

Indeed, it is now likely that rail industry subsidies (excluding HS2) are comparable to the total amount the government spends on maintenance of the entire road network.
 

RailWonderer

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Got stats for that please?

Private investment has been Tory and Labour dogma for decades and govt invests less in rail than the other countries above the UK in standings (or like CZ which have a far smaller and denser more electified network, and is an outlier in former Eastern Bloc countries). A lot of these stats are without context as to why things are the way they are.
 

Krokodil

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Active travel can make only a minimal contribution to mobility. As discussed on another thread, such journeys are short, hence contributing very little to total distance travelled, and any increase would often come from bus and car passengers rather than car drivers. So any reduction in traffic would be tiny. New dwellings are a tiny fraction of the stock, so we are basically stuck with the settlement pattern we have got. And even where people have local amenities and jobs, they would often prefer to travel for better facilities / opportunities.
In some regions active travel and public transport between them account for 80% modal share. Not all car journeys are equal, Bill driving his Land Rover 10 miles into the nearest village for some bread isn't going to cause much congestion, whereas Brenda driving the kids a quarter of a mile to school and a quarter of a mile back home (the sort of journey that could easily be replaced by active travel) is significantly contributing to congestion.

Road costs are more than paid for
All externalities?

plus several billion more in VAT on just that duty.
If I buy a packet of chocolate digestives do you hypothcate the VAT paid to be put towards gastric bypasses on the NHS?

VAT is general taxation, it just goes into the Treasury, you can't say that VAT on fuel is a contribution towards road costs because if the person had spent the money on chocolate digestives the same amount of VAT would end up in the Treasury.

Indeed, it is now likely that rail industry subsidies (excluding HS2) are comparable to the total amount the government spends on maintenance of the entire road network.
Our road network is maintained? You could've fooled me!
 

HSTEd

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All externalities?
Opening the externalities can of worms is very dangerous and by their very nature they are almost impossible to calculate

The railway is the source of significant externalities of its own after all.
But the system of taxes on road based travel raises vastly more than the roads cost, so they are certainly making a good go of it.

If I buy a packet of chocolate digestives do you hypothcate the VAT paid to be put towards gastric bypasses on the NHS?

VAT is general taxation, it just goes into the Treasury, you can't say that VAT on fuel is a contribution towards road costs because if the person had spent the money on chocolate digestives the same amount of VAT would end up in the Treasury.
The VAT on fuel duty (not the real value of the fuel) is a special case because it only exists because the government imposes fuel duty on fuel.
The value is entirely defined by the state with no recourse by anyone.
It is, de-facto, just a higher rate of fuel duty.

Our road network is maintained? You could've fooled me!
Well if it isn't, then clearly road travel is even cheaper for society than the figures suggest!
 

yorksrob

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Opening the externalities can of worms is very dangerous and by their very nature they are almost impossible to calculate

The railway is the source of significant externalities of its own after all.
But the system of taxes on road based travel raises vastly more than the roads cost, so they are certainly making a good go of it.


The VAT on fuel duty (not the real value of the fuel) is a special case because it only exists because the government imposes fuel duty on fuel.
The value is entirely defined by the state with no recourse by anyone.
It is, de-facto, just a higher rate of fuel duty.


Well if it isn't, then clearly road travel is even cheaper for society than the figures suggest!

Or perhaps a properly maintained road network costs more than we're paying now.
 

jayah

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What a strange argument. Teachers and NHS workers’ wages, for example, are 100% paid for by ‘subsidy’, and that doesn’t - and shouldn’t - stop them seeking better remuneration, terms and conditions.
Wages, recruitment and retention in some areas of the public sector are bad because they try to abuse their monopoly power as a buyer. But people can always leave, or not join in the first place. There is little shortage of people applying for jobs on the railway, in the case of train driving there are long waiting lists and given the high basic pay and low contracted weekly hours it should be no surprise.
 
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