Written question asked by Norman Baker (Liberal Democrat) on Wednesday, 10 September 2008, in the House of Commons. It was due for an answer on Wednesday, 17 September 2008. It was answered by Tom Harris (Labour) on Wednesday, 17 September 2008 on behalf of the Department for Transport.

Public Transport: Fees and Charges

Question: To ask the Secretary of State for Transport what recent estimate she has made of the impact of trends in fuel costs on the cost of providing (a) bus and (b) rail transport.

Answer: No estimate of the impact of trends in fuel costs on the cost of providing rail transport has been made by the Department for Transport. The impact on public finances is uncertain as a change in fuel cost increases both the cost of operating the railway and rail patronage through modal shift. The increase in rail patronage leads to higher rail revenue, which is partially captured by the Department through lower subsidies.The Department has not made direct estimates of the impact of fuel price trends on the cost of bus service provision. The impact on bus industry costs will depend on the rise in fuel costs and the extent to which the industry has fixed its fuel prices in advance. We have limited data on what proportion of fuel prices have been fixed in advance. However, on average around 9 per cent. of the bus operators' costs are fuel costs, so a 10 per cent. rise in fuel costs will only increase total costs by 1 per cent. The rises in labour costs are likely to have had a more significant impact on bus industry costs in recent years.

Secondary information