credit crunch will hit the railway

There is no doubt that we are heading for a recession and that will undoubtedly impact on the railways. At the moment loadings remain buoyant thanks to the rise in petrol prices and the fact that the proverbial has not yet hit the fan. But with gloomy news every day, more people are going to be losing their jobs and everyone will tighten their belts.
Moreover the rail companies are imposing above inflation rises in January and that will damp down demand. There is always a time lag between the start of a recession and its impact on an industry like the railways, but I suspect that already the train companies are beginning to experience zero growth or worse on some routes.
And then it will get really interesting. How long will it be before the first train operator comes to the Department with the begging bowl, which, if ministers stick to their guns, will be kicked back in their faces? Probably, the operators will be able to survive a year of recession but not longer. Geoff Hoon might have thought he was getting a relatively easy ride to see out his remaining years in ministerial office, but I suspect he is in for a rough time and will become the most famous transport secretary since Stephen Byers, not an enviable prospect.

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