If people had to spend less on train fares it's unlikely much of the money saved would be hoarded or sent offshore. It'd probably be spent on something that doesn't enjoy a zero rate of VAT!
Money is often spent and/or earned in transactions that are enabled by the rail journey, but if you charge people higher fares then (a) some of them might not travel, so you lose the transaction on the rail fare as well as any and all transactions that depended on the journey, and (b) some of them will still travel and will pay the higher fare, which generates more revenue for the rail industry to offset the cost of providing the service but generates no VAT, and reduces the capacity of the people who pay those fares to spend (whether in transactions enabled by the rail journey or otherwise), since they must allocate a larger share of their disposable income to rail fares.
It's difficult to see how either of those possible outcomes contributes much to economic growth?
The state subsidising people to go places and do things seems like a perfectly orthodox form of economic stimulus to me. I know there's a school of thought that modal shift from train to car is a big win for the government and high train fares contribute to that. I'm not sure it is, necessarily, when the cost of building and maintaining roads and treating all the asthma and other conditions associated with poor air quality is considered.
Are they? The old government would have had to put fares up too. 'actually no better' would be a fairer description.
The government's stated objective is economic growth. It isn't clear that paying more subsidy to reduce fares in real terms delivers that objective. The government essentially needs people to spend more in the economy, not the government to spend more on people.
The railway is an economic enabler. Transport is in general, otherwise why else would the Government spend billions upon billions of taxpayers money on suppressing fuel duty ?
Rail travel should be a good industry to subsidise from an economic point of view - it employs lots of staff - that's money back into the economy, lots of domestic industrial activity, lots of domestic retail activity. Foreign owned TOC's are mostly gone or on the way out.
It seems ludicrous that a cheap day return between Leeds and York - a local hop - is over twenty pounds. This seems inappropriate for a public transport system.
Unfortunately the current government seems to have little interest in providing value for money for passengers at the moment.
In fact, the more I think of it, the more it seems to be that the only way we'll get any meaningful fares reform in passengers favour will be if a government commits to some sort of big ticket "climate ticket" or other subscription ticket scheme.
Advance tickets between St Albans and London?
How the hell can Advance tickets be a suitable ticket option on a service that has ten trains an hour. At this rate we'll be getting Advance tickets to travel on the Northern Line....
The modern railway is a one trick pony. There's been a lot of talk about "innovation" in the industry over the past thirty years, but really this seems to amount to little more than forcing everyone onto advanced purchase, whether its in anyway suitable or not.
There are various things the other lot promised to do like the bus cap and some capital spending that have been ditched. In general they used an RPI formula because they didn't want to burn capital by insisting on RPI+1, which is something the new government has been far more comfortable with. They've also brought in a rail minister who has done significantly more damage to the industry than the tory one did. Now you can argue they wouldn't have done a good job either and you may very well be correct in that assessment, I probably share it, but we can only compare them in hypotheticals. I wouldn't disagree with your assessment of being no better, but I think there's evidence to support having been made slightly worse. Again, this is from someone who voted for and is a member of the party in government.
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Whilst this is true to an extent, it's perhaps a little pessimistic. I don't think you can overstate the benefit as a passenger of not having to negotiate year on year of continual industrial relations problems - and around here, we had over a year of it before the pandemic, let alone afterwards.