Taxpayers likely to shore up cost of new rail investment
Funding for Lending Scheme will load the risk of private sector bank lending directly on to the taxpayer
Dr. Richard Wellings comments on the Government's infrastructure investment announcement
Claims that rail investment can be funded through higher fare revenues and efficiency gains should be treated with scepticism.
“The government’s main priority should be phasing out taxpayer subsidies to the railways rather than investing in additional loss-making projects. Indeed, claims that the schemes can be funded through higher fare revenues and efficiency gains should be treated with scepticism. In reality taxpayers are likely to end up paying a significant share of the costs. This is particularly objectionable given that rail travellers are on average wealthier than the general population.
“In addition, it would seem that many of the projects are motivated by politics rather than economics, representing attempts to gain political favour in particular regions. If economic objectives were the priority, the government would be investing the money in road schemes, which generally produce far greater economic returns.”
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