Budget/Spending Review 2021 - Railways

[TravelDream]

And not proceed off of rail.

You've suggested that air is already competitive on cost. Why does it need to be made more so ?

Look at this list of places I provided.
''London to Inverness, Cardiff to Edinburgh, Manchester to Newquay, Birmingham to Aberdeen''

Should people wanting to go on these routes be punished for having poor rail services? What you have said makes it sound like a yes.

The way to get more people on the rails is to invest in infrastructure and lower fares so the train fares are more than competitive with airfares. Yes, it might cost a fair bit, but any 'green revolution' or whatever the government are calling it this week requires it.

 

[HSTEd]

And the way to encourage them onto the train has to be via pricing. There is no tax on rail fares so that can't be cut, so the only alternative is to increase the tax on flying and on petrol.

Well we could solve the problems that make rail uncompetitive?

The longest likely air journey in Great Britain is not much more than 900km (Newquay-Inverness/Aberdeen), that is well within the technical capabilities of available surface transport technologies.

It would cost a lot up front but in the long run if we want economic and cultural 'leveling up' and a reduction emissions, it will have to happen.

 

[Ianno87]

Look at this list of places I provided.
''London to Inverness, Cardiff to Edinburgh, Manchester to Newquay, Birmingham to Aberdeen''

Should people wanting to go on these routes be punished for having poor rail services? What you have said makes it sound like a yes.

No, they should be considering their need to travel at all, if the rail journey does not suit them. We can't carry on like this.

 

[TravelDream]

Why do people "need" to travel from Manchester to Newquay? Hardly socially or economically necessary. We shouldn't be subsidising frivolous travel on a polluting mode.

You are totally right.

God forbid businesses invest and do business in Cornwall or, even worse, the north. People there should be happy in their coal pits and leave air travel to those in London and the shires.

Ok, my post is a little flippant, but are you being serious!? There are a million reasons and more why people might need to travel on these routes.

 

[Ianno87]

You are totally right.

God forbid businesses invest and do business in Cornwall or, even worse, the north. People there should be happy in their coal pits and leave air travel to those in London and the shires.

Ok, my post is a little flippant, but are you being serious!? There are a million reasons and more why people might need to travel on these routes.

I find it hard to believe that business will suddenly grind to a halt for want of a daily flight between Newquay and Manchester.

 

[InOban]

I know some people don't like it, but cutting APD on domestic flights is an essential move if the government is actually going to 'level up' all parts of the UK.

London to Inverness, Cardiff to Edinburgh, Manchester to Newquay, Birmingham to Aberdeen are just not good by train unless you have a lot of time and enjoy a long train trip (I do, but many don't). They are not competitive on time and often not on price.

Then you have routes like Edinburgh/ Glasgow to London. Routes which shouldn't be competitive by air, but are due to relatively slow-running trains and very high prices on the WCML/ECML.

It's also probably stating the obvious, but aviation is heavily taxed and rail heavily subsidised.

People need to be encouraged onto the train, not priced out of the air market.

Apart from APD, in what way is aviation heavily taxed?
AIUI, there is no APD if the plane has 19 seats or fewer. I would have increased that to cover the sort of services needed to maintain cross-country connectivity, say 59.
And I believe that Inverness is exempt from APD.

 

[Ianno87]

You are totally right.

God forbid businesses invest and do business in Cornwall or, even worse, the north. People there should be happy in their coal pits and leave air travel to those in London and the shires.

Ok, my post is a little flippant, but are you being serious!? There are a million reasons and more why people might need to travel on these routes.

Also, if the business is so important, it can absorb a bit more APD. We should not be subsidising it.

 

[Watershed]

Apart from APD, in what way is aviation heavily taxed?
AIUI, there is no APD if the plane has 19 seats or fewer. I would have increased that to cover the sort of services needed to maintain cross-country connectivity, say 59.
And I believe that Inverness is exempt from APD.

Yes, all flights to/from the Highlands are exempt from APD.

I do think the current system of APD is somewhat arbitrary, but simply cutting it for all domestic flights is not the answer.

 

[Grumpy Git]

Cut the tax on an air journey that is possible by train whilst increasing it on an air journey that is not possible by any other means, Tory "logic" at its finest.

 

[TravelDream]

Apart from APD, in what way is aviation heavily taxed?
AIUI, there is no APD if the plane has 19 seats or fewer. I would have increased that to cover the sort of services needed to maintain cross-country connectivity, say 59.
And I believe that Inverness is exempt from APD.

Aviation is one of the highest taxed industries in the country.

British APD is one of the highest aviation taxes based on ticket sales in the world. It can work out to £100s on a single ticket.
Airlines have to pay for air traffic control services which is used by government as a profit-making industry.
VAT is charged on ancillary services like baggage and speedy boarding.
Obviously there are other things like NI and corporate taxes.

 

[HSTEd]

Cut the tax on an air journey that is possible by train whilst increasing it on an air journey that is not possible by any other means, Tory "logic" at its finest.

Whilst they are possible, most of them are only nominally possible and are so unattractive/expensive as to be almost comical.

 

[yorksrob]

Look at this list of places I provided.
''London to Inverness, Cardiff to Edinburgh, Manchester to Newquay, Birmingham to Aberdeen''

Should people wanting to go on these routes be punished for having poor rail services? What you have said makes it sound like a yes.

The way to get more people on the rails is to invest in infrastructure and lower fares so the train fares are more than competitive with airfares. Yes, it might cost a fair bit, but any 'green revolution' or whatever the government are calling it this week requires it.

How are they being punished by having the status quo ? I'm not suggesting air duty be hiked up, I'm questioning a cut. It's rail passengers who are punished by the fares escalator.

The majority of longer distance public transport passengers are price sensitive, more than time sensitive. Why aren't we controlling fares for them, rather than cutting taxes for business people who probably wouldn't be affected by the tax cut if passed on anyway ?

Most of those coridors you mention it would be quite possible to have some direct services on them, were it not for our moth-eaten cross country network.

 

[Bletchleyite]

Why do people "need" to travel from Manchester to Newquay? Hardly socially or economically necessary. We shouldn't be subsidising frivolous travel on a polluting mode.

Some cases, yes, where there is a mass of people where the rail journey is not attractive (e.g. to/from Northern Ireland, North of Scotland etc.), but not every single potential domestic air route.

Newquay is typically a family holiday destination, so driving a small engined petrol car or EV with all seats taken is a much more efficient way to get there, and what most families will prefer anyway.

And Manchester-London flights, even as connections, are silly - hopefully HS2 will codeshare with all airlines for through ticketing with a change at Old Oak.

 

[InOban]

Aviation is one of the highest taxed industries in the country.

British APD is one of the highest aviation taxes based on ticket sales in the world. It can work out to £100s on a single ticket.
Airlines have to pay for air traffic control services which is used by government as a profit-making industry.
VAT is charged on ancillary services like baggage and speedy boarding.
Obviously there are other things like NI and corporate taxes.

But their fuel is tax free.

 

[WatcherZero]

I am slightly confused: the Treasury document refers to £35 billion of rail investment, but in his Budget speech the Chancellor referred to £46bn of investment in rail as was also reported on The Guardian website: Budget 2021: key points at a glance | Autumn budget 2021 | The Guardian

£35bn over the three year spending review period (until the end of the Parliament), £46bn over budgets 5 years annual tax and spending forecast.

 

[thenorthern]

With domestic air travel you have to remember that at the moment there isn't much choice in domestic air travel after FlyBe collapsed which has severely affected domestic air travel outside London as FlyBe carried more than half the domestic non-London traffic.

The chancellor will be wanting to protect the smaller airports which have a lot of domestic air travel most notably Southampton Airport.

 

[Starmill]

The Air Passenger Duty thing makes no difference - rail simply cannot compete on journey time, loses by an enormous margin on cost and barely even beats air on convenience these days.

Without modern, high speed, high capacity route to Scotland the flights to Scotland will endure almost indefinitely.

Rail competes very well at the margins. If its a little bit cheaper or a little bit quicker for some domestic trips. But air frequently wins. The £6.50 is really relevant because it tips the scale a little bit more. The next railway price rise will tip it more still.

 

[Bald Rick]

The other thing to note is Covid support expires this FY so that infers DofT will have a task to get operating expenditure back in balance as ridership is unlikely to fully recover especially the income from season tickets.

That’s just the way the accounting is done. The Covid specific support expires, but base revenue funding for the DfT increases substantially next year before falling year on year. The spending review document specifically states that this reflects revenue recovering up to the end of the SR period.

The Air Passenger Duty thing makes no differenc

I’m afraid it does, as ever, at the margins. But in a big market like London - Scotland, the margins are big. Even a 1% shift in market share is worth around millions each year.

Or doing what France has done, and ban domestic flights when the journey can be done by express rail services

France haven’t banned any domestic flights. See the other thread.

 

[HullRailMan]

The 50% cut to Air Passenger Duty for trips between UK airports is confirmed too. Particularly bad news for some long-distance rail in Great Britain. The competition gets a £6.50 per trip automatic price cut, while the railway will charge more and more each year.

Realistically, how many people, given a choice between a 90 minute flight or a 10 hour rail journey, will be swayed to change mode by £6.50?
The reality here is that domestic air can provide viable links that will support the economy, where day trips by road and rail aren’t possible. Remember, it also applies to domestic flights to/from NI where rail isn’t an option.

 

[Bald Rick]

Realistically, how many people, given a choice between a 90 minute flight or a 10 hour rail journey, will be swayed to change mode by £6.50?

Essentially none.

But some people will be swayed by £6.50 given a choice of a door to door time of, say, 4h30 by air and 5h by train. And there’s a big market in that region of timing.

 

[HullRailMan]

Essentially none.

But some people will be swayed by £6.50 given a choice of a door to door time of, say, 4h30 by air and 5h by train. And there’s a big market in that region of timing.

I agree to some degree, but there are other factors that influence the decision. Personally, I enjoy rail travel, but will fly if it is a viable alternative as you are guaranteed a seat and it is generally more punctual (In my experience). It’s also much easier for me to check in a suitcase than drag it around the rail network.
I really hope we can collectively move away from this rail = good and air = bad mentality and accept there are cases where each mode provides a better option than the other. No one mode will ever provide all the answers.

 

[Starmill]

Realistically, how many people, given a choice between a 90 minute flight or a 10 hour rail journey, will be swayed to change mode by £6.50?
The reality here is that domestic air can provide viable links that will support the economy, where day trips by road and rail aren’t possible. Remember, it also applies to domestic flights to/from NI where rail isn’t an option.

The big markets aren't ten hours. They're four to six. £13 off a round trip by air will be enough to tip the scales on several cases where the rail journey is currently very slightly better. In the same way that cutting £6.50 from the £79.20 single between London and Edinburgh would genuinely make a difference.

== Doublepost prevention - post automatically merged: 27 Oct 2021 ==

I agree to some degree, but there are other factors that influence the decision. Personally, I enjoy rail travel, but will fly if it is a viable alternative as you are guaranteed a seat and it is generally more punctual (In my experience). It’s also much easier for me to check in a suitcase than drag it around the rail network.
I really hope we can collectively move away from this rail = good and air = bad mentality and accept there are cases where each mode provides a better option than the other. No one mode will ever provide all the answers.

This is a discussion of taxation though, not your personal preferences of travel mode.

The tax changes will result in higher atmospheric carbon emissions from certain travel markets. They will also cost the government money. This is bad. Very bad.

 

[Bald Rick]

but there are other factors that influence the decision.

Indeed so, but...

Personally...

And that’s the thing - the 10m + people who travel by air or rail between Scotland and London (and the SE) each year will each have their own personal factors for consideration. For some, it will be a fine balance choosing one over the other. That £6.50 will be enough to change the decision for those who only just decide to use rail.

 

[Grumpy Git]

The tax changes will result in higher atmospheric carbon emissions from certain travel markets. They will also cost the government money. This is bad. Very bad.

I'm trying to work-out the Chancellors reasons for this change and if there will be a net loss or gain to the treasury (as the domestic tax is falling, but the long-haul one is increasing)? Is there any evidence of "flag-waving" here I wonder, in an attempt to divert attention from the biggest tax grab from the lower-middle classes since the end of WWII?

 

[Starmill]

I'm trying to work-out the Chancellors reasons for this change and if there will be a net loss or gain to the treasury (as the domestic tax is falling, but the long-haul one is increasing)? Is there any evidence of "flag-waving" here I wonder, in an attempt to divert attention from the biggest tax grab from the lower-middle classes since the end of WWII?

It's a net cost of approximately £30 million / year. I think it's partly a desire to support small Airports but there would have been far more targeted ways to do that. This hands an enormous benefit to Easyjet.

 

[TravelDream]

But their fuel is tax free.

Aviation fuel is tax free under international treaty.

 

[Penmorfa]

Surely the real reason for cutting this tax is because the Government are desperate to prop-up the Union of GB & NI?

 

[Irascible]

Why do people "need" to travel from Manchester to Newquay? Hardly socially or economically necessary. We shouldn't be subsidising frivolous travel on a polluting mode.

Some cases, yes, where there is a mass of people where the rail journey is not attractive (e.g. to/from Northern Ireland, North of Scotland etc.), but not every single potential domestic air route.

Wow. Back to the farms & tin mines we go & perish the thought we try & sell any of it anywhere. How many reasons do you want? How polluting is halfway up the country on a modern, clean energy... wait a sec... Voyager then?

 

[Horizon22]

Surely the real reason for cutting this tax is because the Government are desperate to prop-up the Union of GB & NI?

Quite possibly. That being said Scotland is generally more "left" than England, and are more likely to want to support environmentally friendly measures that would encourage travelling by train rather than flying.

 

[357]

How polluting is halfway up the country on a modern, clean energy... wait a sec... Voyager then?

Are you saying that a Voyager is as polluting as a 737 or A320 per passenger?