Latest Rail News

05.09.12

Rail subsidies should be reduced to zero – IEA

Government subsidies to the rail industry should be scrapped, the Transport Select Committee heard yesterday at their inquiry on rail freight, franchising and reactions to the HLOS.

Dr Richard Wellings, deputy editor of the Institute of Economic Affairs (IEA), said rail scheme announcements seemed to be more based on political considerations rather than economic ones.

He said: “Few rail schemes make economic sense and the worst example of this is (the London-to-Birmingham high-speed rail plan) HS2. What we have is a thinly-veiled version of Soviet-style central planning here. These people can't make sensible decisions.”

Subsidies from the Government are now nearly £4bn a year, although it is hoped to reduce this to £2bn by 2019.

Association of Train Operating Companies chief executive Michael Roberts told the committee that rail firms believed there was “an ongoing case for some degree of public support for the railways”.

The Committee also heard evidence that HS2 is ‘vital’ to safeguarding freight capacity, and the electric spine highlighted in the HLOS will open up new opportunities on the Midlands Main Line, allowing intermodal freight access to the Midlands.

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