Unfortunately I just see a lot of bad faith arguments around this sort of stuff, so I don't see a solution being reached anytime soon.
Sure railways are subsidised, as are roads, schools, healthcare, policing, fire brigade - we accept subsidies for these things because they provide a public good. Lack of access to high quality transportation is very obviously a major barrier to economic success for many parts of the country. The railways provide the lowest carbon emissions of any form of non-active travel, considering transport makes up the largest share of the UK's carbon emissions, they will prove crucial for our fight against climate change.
On the other hand, there is a lot of stagnant thinking in the industry. Firstly we have modern working practices such as DOO, which already provides tens of thousands of safe services across the country every day. The current government doesn't help itself - what if we planned to run more service with the existing staff?
Secondly there is an obsession with suburban residents commuting to city centre offices. The actual percentage of journeys that fit into this category is rather small, but these people have the biggest weight politically. Very observably, the most successful public transport services throughout the pandemic cater mostly to other people outside this category - think regional railway services and urban tram systems. NET is already noticeably at or over capacity, with Metrolink being fairly similar. Railway services taking working families on weekend trips to popular destinations have been rammed over the summer holidays!
This ultimately cuts to the core of the issue - politicians and railway bosses have focused on the typically middle/upper class, typically white, typically male, business travellers who they are able to drain for every penny in a grasp to claw subsidies back. When the pandemic hit, these were some of the first people to leave the railways and, facing fares now higher than ever before, many are making the decision not to come back.
The most resilient services have been some of the most forgotten and some of the most under-invested in. Unfortunately, I worry the cuts will hurt these more than anything else. The home counties will likely see the least hit (although I'm sure the areas too poor to have political influence will still feel the pinch)
We could take the opportunity to build a railway that truly serves the UK - let's build more services like the London Overground, Manchester Metrolink and offer railway staff gainful employment delivering these new projects while the railways and wilder economy recover from the pandemic. But the useless oafs in government have no imagination and are driven by dogmatic ideology that despite continually getting proven wrong, they continue to blindly follow anyway...
Edit:
Also during this shortage of truck drivers, the extra rail capacity could prove super handy for getting our supply chains moving again. Grab some leftover locos (trust me, there are a ton of class 66's) and start moving some freight!