Why the mock shock from the Minister of Transport?
To hear the Transport Minister, Norman Baker, talking about coach fare subsidies for the elderly and disabled, one might imagine that the road transport industry have had a good year, but they haven’t.
Motoring organisation reports reflect a massive leap in the cost of fuel, a major factor affecting the transport business – passenger or freight. So why did Mr. Baker say that the coach companies had intimated that they could deal with the looming cut in concessionary fares?
Mr Baker said companies had been given 12 months’ notice of the plans, adding “We also made the calculation that it was likely that there’d be a commercial case for National Express and others to put in place their own arrangements to make up for that.”
Look at the graph above and you will see that fuel prices at the pump have risen steeply in the last 12 months. The AA have reported that “Compared to a year ago, petrol is now 19.22p a litre more expensive (135.71p v 116.49p) while diesel costs 20.91p more (139.89p v 118.98p). A typical 50-litre petrol refill now costs £9.61 more, adding £40.81 to the monthly petrol spend of a two-car family. Filling a commercial van’s 80-litre tank with diesel now costs £16.73 more than 12 months ago. http://www.theaa.com/motoring_advice/news/august-fuel-price-report-2011.html
These base costs are beyond the control of transport companies, so why is the Transport Minister, of all people, criticising transport companies for changing their optimism about their ability to absorb the concessions after the cut-off date in October, when one of the largest running costs they have has risen by 18% over the last year? It is unimaginable that Mr. Baker is unaware of the absurdly high pump price of fuel. So why is he so shocked that the transport companies now tell him that absorbing the cost of concessionary fares to the disabled and elderly is extremely unlikely? The government should look again at this rather mean cut that will save the exchequer about £17 million annually.