Transport Pricing & Payouts
Sunday, 21 August 2011
According to yesterday's Guardian, Stagecoach is about to pay out some £340m in dividends and share buybacks to its shareholders. Clearly a very profitable business, as are many of the other train and bus services providers. Given this scale of profit, why are these firm then proposing to raise rail fares by between 8% and 13% from next January? The government sets the pricing rules they will say. Which is true. And it is the government which gets the benefits of spending savings; it can reduce its subsidy to the same companies by an amount corresponding to the price rise. In theory, this makes funds available for rail infrastructure investment..
But if the bus & train firms are so profitable anyway, shouldn't we make them spend more of that profit on investments in infrastructure and improving services before paying out to shareholders?
