Rail fares increase sets the late summer news agenda

Published 25th August 2012

The Government faces challenges to their proposed fares increase

London. Proposed Fares Rise from January 2013

The Government has announced that train fares will be increased by inflation plus 3% which means that some fares could potentially rise between 6% and 11% depending on the varying franchise terms and conditions. The claim by Maria Eagle, Shadow Transport Secretary made on Radio 5 on August 27 that fares will rise by 11% was incorrect.

Whatever the increase, the announcement was understandably the subject of an intense debate for a few days after the announcement and Rail.co.uk was invited to carry out an intensive round of television and radio interviews to discuss the subject in just 24 hours!

Key points to consider

The proposed announcement is bad news for rail passengers for obvious reasons, and also for motorists as this could force passengers back into their cars onto already congested roads.

One debatable point is often made in so far as drivers are concerned that passengers should pay their way and road users should not subsidise rail passengers.

But in fact there is a complete cross-subsidy as with the National Health Service (NHS). Those that do not drink or smoke pay their taxes to support the NHS just as non-rail users support the railways. Equally, non motorists pay taxes which no doubt also go towards meeting the costs of roads!

Safest transport mode

Britain’s railways are the safest mode of travelling today and there is a price of safety to maintain this priority. Increased fares reflect the higher safety standards applicable on todays railways.

It is a fact that the Government are considering raising the legal speed limit on roads to 80mph and they have accepted that this will cause more deaths and injuries. This is simply not an acceptable option for rail transport so why should it be different for roads?

Record Passenger numbers and Freight boom

Safety may well be a factor in why passenger numbers have doubled to 1.4 billion journeys since 1995. Or perhaps it was because for many years after privatisation, fares were subjected to an inflation-minus 1 percent rise, which meant rail became an attractive proposition.

It was also helped as the old 30-40 year old slam door trains were replaced by 2003 and new trains took over operations. There are also twice as many trains running now as 15 years ago, so on many lines property process have increased as a direct result of better railways.

The amount of freight being conveyed by rail has also increased exponentially meaning to the roads being less congested as a result benefitting all road users and the economy.

Increasing investment

This increase in all rail traffic has to be accommodated for as the forecasts all point to a continuation of increasing numbers of passengers and freight volumes. The recent Government announcement that over £4bn will be spent on upgrades in the five year period from next April also has to be funded somehow.

Under British Rail, investment was often starved or short term based at best based on political expediency. This did make the railways the most financially efficient in Europe, if not the World. One aspect of privatisation is that it seems long term investment is now the way forward with the opening of closed routes, the national electrification project and the projected construction of HS2 announcements made over the last few years.

Reducing Support

The Office of Rail Regulation (ORR) has just published statistics highlighting year-on-year levels of government financial support to the rail industry. In the last financial year (2011-12) the rail industry received a £3.9bn government subsidy.

This was the seventh year in succession government support reduced after topping out in 2006-07 when the rail industry received £6.3bn. Passengers used to contribute around 50% of the railways’ costs but now pay for around 65% of the costs and the Government’s aim is to increase this to 75%.

Tickets and driving costs

Train tickets can be expensive if not booked in advance, as with holidays and flights. Season tickets are often quoted as being expensive but when it is considered that they are available on all trains and offer a large reduction on peak hour fares, are arguably a bargain?

Motoring costs are not just fuel but must include parking, tax and insurance costs as well as depreciation of the purchase price, servicing and maintenance. Driving can be far more convenient but it is possible to work or sleep on a train so each transport mode has its benefits and drawbacks!

Regional differences

Fares in Wales and Scotland are subject to different rates of increase reflecting the amount of the respective national political involvement in their railways.

Fighting the increase

Transport Secretary Justine Greening has indicated she will take up the size of the increase with The Treasury, last year. The Chancellor reduced the increase to RPI plus 1% after pressure was brought to bear. It should of course be remembered that there are millions of regular rail users living in marginal constituencies and this could mean a reduced fares’ increase.

Social Service or a Business?

The one question which nobody in politics will answer is that should our railways be run as a business or a social necessity? This debate has been ongoing since 1948 when railways were nationalised!

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