Some economic facts of life

Scotland has relatively few truly ‘captive’ rail markets. This, says the Rail Delivery Group, reflects “the distribution of population and effectiveness of other transport networks”. Nevertheless, traffic - in terms of train distance covered - has approximately doubled over the past two decades.

Yet capacity improvements have been intended to meet anticipated demand that may only exist for a few hours daily, especially urban commuting. Economic benefits are small in relation to investment costs - Scottish railway improvements often need revenue support besides capital funding. ScotRail’s yields per journey and passenger-km are lower than on other parts of the GB network.

The subsidy requirement in England and Wales has fallen in recent years because the UK Government has pursued a policy of above-inflation regulated fare rises. But the Scottish Government refuses to follow suit - and that means passenger income per journey is 16% lower than the GB average.

Subsidies, mainly from the Scottish Government, cover 56% of railway costs (compared with 25.6% for the GB railway as a whole). In money terms, Scotland’s subsidy was £ 675 million in 2014-15, equivalent to £ 6.70 per journey (compared with £ 2.13 for the GB network as a whole).

Scotland’s far-flung population means that costs per passenger-kilometre are 27% higher elsewhere in Britain. This reflects longer trip distances (an average of 44.7km in Scotland versus 37.7km in Great Britain as a whole), and fewer passengers per train (an average of 81 in Scotland, 121 across GB).

If the network stays as it is, there will be little scope for cutting subsidies, warns RDG. Any bad economic reaction to Brexit could harm rail’s revenue. The industry and Government should bear this in mind when deciding on future investments.