Richest Households Receive Double Transport Subsidy of Poorest

The richest ten per cent of households receive nearly twice the amount of government public transport subsidy as the poorest, according to a new report from the Equality Trust.

The report finds that:

  • In total the richest ten per cent receives £978 million in transport subsidy; over three times more than the £297 million received by the poorest ten per cent.
  • When broken down by household the richest ten per cent gain nearly double the subsidy of the poorest, £294 per year per household compared to just £162.
  • For the rail system alone a household in the richest ten per cent receives over three and a half times as much subsidy as one in the poorest ten per cent.
  • A household in London benefits from almost four times as much from rail subsidy as a household in Wales
  • Inequality of travel subsidy is not a recent development, for most of the last 20 years the richest ten per cent has received over four times the level of subsidy of the poorest ten per cent

Duncan Exley, Director of the Equality Trust, said:

“Our transport system is vital to us all. It’s how we get to work, send our kids to school, how we shop and generally move around. It literally binds the nation together. But despite this it is still failing many of our poorest.

“This isn’t helped by our system of subsidies. We are spending a huge amount of money helping the already relatively well off. But far less money is going towards helping those at the bottom, people who desperately need support to access decent jobs. The result is these subsidies are effectively increasing inequality.

 “We know that the UK suffers from some of the most extreme inequality found in developed nations. The result is that we live in a country in which you are less likely to gain a good education, less likely to trust others, more likely to suffer from physical or mental ill health, and more likely to die younger. In fact increasing evidence suggests our high inequality is even a burden on our economy.

“Government policy making pays far too little attention to the multitude of social and economic benefits of inequality reduction. We need a drastic overhaul of how policy is made if we are to arrest our damaging levels of inequality and see these benefits realised.”

The report recommends that:

  • All government departments should consider whether or not any new policy proposal increases inequality, as part of their cost-benefit evaluation process.
  • The Department for Transport, and all other government departments, should review the net effect of their existing policies as a whole on inequality.
  • The Government should commission the Office for Budget Responsibility (OBR) to estimate the net impact of its annual budget on UK inequality.