While rail travellers in Britain prepare for tickets to cost 3.1 per cent more in 2019, Luxembourg is set to become the first country in the world to abolish all fares on public transport.

A new coalition government is taking office in the Grand Duchy with the promise of abolishing tickets on trains, trams and buses next summer.

At present fares are capped at a low level: €2 for up to two hours of travel, which in the small nation covers almost any journey.

Luxembourg’s area is 999 square miles, almost the same as Oxfordshire.

Anyone who wants to include first-class rail pays €3. An all-day second-class ticket on every form of public transport costs €4.

Young people travel free, and many commuters qualify for an annual “mPass” which costs €150 for all public transport.

Luxembourg’s transport system costs close to €1bn per year to operate. But partly as a result of the concessionary offers, fares amount to only €30m annually.

From summer 2019, tickets are set to be abolished. Part of the cost will be covered by removing a tax break for commuters.

The move will save on the collection and processing of fares. It may also encourage a shift away from private cars; traffic congestion, especially around Luxembourg City, is a serious problem.

Some city centres around the world offer free transport in a bid to reduce congestion, and in some US counties the bus system is free. But no other nation has eliminated fares from its entire transport network.

Not every commuter is convinced about the idea. Claude Moyen, a teacher who travels by train to his school in the town of Diekirch every day, said he feared the quality of journeys might suffer, and added: “I’m not sure if making public transport free here in Luxembourg will take more people out of their cars.”

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If the idea is deemed a success, neighbouring France may start to remove “peppercorn” fares from some bus services. At present passengers can travel for many miles to and from cities such as Nice and Perpignan for a flat fare of just €1.

One issue still to be considered in Luxembourg is the likelihood that homeless people may shrewdly decide to move from the streets to the trains in winter, in order to stay warm while they travel the nation.

In addition, no decision has been taken on how to handle the present demarcation between first and second class compartments on the trains.

The coalition of the centrist Democratic Party, the left-wing Socialist Workers’ Party and the Greens is led by premier-designate Xavier Bettel. It is known as the “Gambia coalition” because the parties’ colours are blue, red and green respectively – which together are the colours of the Gambian flag.