Embargoed: 00:01 Monday 2nd January 2023
Rail subsidies since the beginning of the COVID pandemic will have cost £42 billion by March 2023, according to new research by the TaxPayers’ Alliance. That includes £30 billion in additional subsidies to cover for COVID disruption. This amounts to around £1,300 for every taxpayer including almost £1,000 for COVID subsidies alone..
Analysis of figures from the Office of Rail and Road has found that subsidies, already running into the billions before the covid pandemic, have soared, and will amount to £11 billion in 2022/23 alone. That is well above pre-pandemic levels. Of this £11 billion, £6.3 billion is estimated to be for COVID-related subsidies. It will mean that the average subsidy per journey taken in 2023 will be higher than the average fare per journey.
These figures are revealed ahead of widespread disruption for rail users, with strikes scheduled from the 3rd to the 7th of January.
With rail usage unlikely to return to pre-pandemic levels anytime soon due to shifting working patterns, and with the industry already benefiting from substantial taxpayer support, the TaxPayers’ Alliance has warned that any pay increases over and above forecast average earnings will have to be met by taxpayers through an increased subsidy.
- Estimated total rail subsidy for 2022-23 will be £11 billion, down from the first two years of COVID (£17.6 billion and £13.3 billion for 2020-21, 2021-22 respectively) but up from before the pandemic (£4.7 billion and £6.8 billion for 2018-19 and 2019-20)
- Estimated additional COVID subsidy for 2022-23 will be £6.3 billion, enough to provide at least a 9 per cent pay increase for nurses. COVID subsidies were worth £8.6 billion in 2021-22, £12.9 billion in 2020-21 and £2.1 billion in 2019-20
- The average subsidy per journey will be £7.51, more than the average fare of £6.12. This compares to £43.55 and £13.43 in 2019-20 and 2020-21 respectively for journeys costing an average of £4.93 and £5.89. In 2019-20 the average subsidy was £3.73 for journeys worth an average of £6.27
- The average fare paid per journey is down compared to before the pandemic, with the average fare of £6.12 in 2022-23 2.5per cent lower than the average fare of £6.28 in 2019-20
Phil Basey, head of research at the TaxPayers' Alliance, said:
"Soaring subsidies demonstrate the unsustainability of current pay demands.
“For years taxpayers have been covering the costs of the rail industry, yet militant union bosses are now biting the hand that feeds them.
“Ministers must stand firm and protect taxpayers in upcoming pay deals.”
TPA spokespeople are available for live and pre-recorded broadcast interviews via 07795 084 113 (no texts)
Investigations Campaign Manager, TaxPayers' Alliance
24-hour media hotline: 07795 084 113 (no texts)
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