Can the UK government afford the East Coast main line?
The UK government has been forced to take back ownership of the East Coast mainline rail franchise after former operator National Express failed to balance the books. However, there is now great concern that under the ownership of the UK government it could cost taxpayers more than ever before to travel on this particular line. Indeed there are already signs that ticket prices will be increasing in the short to medium term as the government looks to reduce taxpayer liabilities to the rail network as soon as possible.
The truth is that the UK rail network was franchised for reason, to transfer the liability and investment costs to franchisees. However, due to a mixture of growing investment requirements and falling passenger numbers, the recession would appear to have been the final nail in the coffin of National Express. There is great concern that more franchise holders will follow suit in due course unless the rail regulator allows them to increase prices in the short to medium term to make up any shortfall in funding.
Since inflation came under significant pressure, after the credit crunch, price reductions have actually been negative due to the pricing formula afforded to the sector. There will need to be significant changes to make this a viable business opportunity for the future.
Share this..
Related stories
Students Forced To Take On More Work
The number of students taking part time work during term times has increased dramatically of late after falling over the last two years. A report by NatWest shows that 42% of undergraduates are in part time employment earning upwards of £2 billion between them. However, while the increase in working hours has been marked, so has the rise in the cost of living for students - hitting nearly £11...
Read MoreGordon Brown attacks Tory policy on budget deficit
Despite the fact that the UK budget deficit is set to hit £178 billion for the current tax year Gordon Brown seems adamant that his government's spend, spend, spend policy must continue for the foreseeable future. He has today drawn the battle lines for the forthcoming election with suggestion that a premature reduction in spending by the Tory party could tip the UK economy back into recession....
Read MoreWill Northern Rock be given away?
As it becomes more and more apparent that the UK government would like to dispose of Northern Rock before the general election there are serious concerns that the company will be "given away". Despite an attempt by a number of MPs to persuade the government to convert Northern Rock back into a mutual society, this particular avenue looks to be a non-starter. In all honesty the Northern Rock has be...
Read More'Delay' on PPI recommended
Consumers should not be sold payment protection insurance (PPI) within 14 days of buying a loan, the Competition Commission (CC) has announced.PPI is designed to allow people to still repay loans even if they suffer a loss in income or health.However, the CC said that the "vast majority" of the 13 million PPI policies in the UK are sold to customers at the same time as they take out their loan.Thi...
Read MoreRoyal Bank of Scotland directors face potential fraud investigation
In a move which has surprised many in the city it has been revealed that Sir Fred Goodwin and his former Royal Bank of Scotland directors could face a criminal investigation in relation to the administration of the Royal Bank of Scotland. The shares collapsed earlier this year amid signs that the group had overextended itself in foreign markets and was struggling on a liquidity basis.
Read More