Subsidy concerns

Arguably, the current financial woes of First Group are because of public transport’s reliance on taxpayers’ handouts (Business, 30 March). Basically, subsidies maintain prices of goods and services below costs of production with wasteful inefficient consequences. What, for instance, would be the price of a seat to customers in a free market?

One contentious aspect of transport subsidies is they raise the real income of all the passengers. This could be queried just as some economists and politicians are questioning free travel for pensioners. Bearing in mind arguments for transport subsidies are to offset the “externality” costs of carbon emissions. However, now with “sluggish passenger numbers,” especially for buses, perhaps the issue of subsidies is re-examined.

Ellis Thorpe

Old Chapel Walk

Inverurie, Aberdeenshire

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