The pressure is on for the Department for Transport to cut the subsidy going to the railways. It amounts to over £5bn this year, a historically very high figure.In the short term, the only way of getting the subsidy down is to push up fares, because savings on investment or even line closures take years to feed through. That is why the Department is looking at the present fares structure and, in particular, considering deregulating the saver fares that allow cheap long distance off-peak travel.The response to the saver fare threat has been muted.
Passenger Focus (the new name for the Rail Passengers Council, chosen by branding consultants and therefore no mention of the word railways!) has expressed some mild misgivings but argues that as long as some form of cheap fare is available, then it would not campaign to ‘save the saver’.This is a mistake. The saver provides certainty about how much a journey will cost. It is an identifiable product which the public can understand. Sure, there are lots of cheaper deals available for people travelling in advance, but the railway must provide a walk on service that is readily accessible to all at a reasonable price.
The DfT would be abandoning one of the few guarantees given to passengers when the railway was first privatised a decade ago. The then Tory government reckoned that it was essential for public confidence to restrict the train operators from putting up fares at will. The rise in saver fares was initially restricted to inflation minus 1% each year, a move which allayed many of the fears of the opponents of privatisation. Labour relaxed the rule so that savers are currently capped at inflation plus 1%.And perhaps ministers are also motivated by a desire to ensure that companies tied in to recently signed franchises that require massive and unrealistic premium payments to government can actually pay up.
To put the worst possible gloss on it (and why not?), sharp increases in saver tickets would fulfil a further purpose, too: it would price off demand and thus reduce the overcrowding on trains which, in turn, is fuelling more and more calls for higher investment. It is ironic that one of the reasons for privatising British Rail was that private investment would be attracted and there would no longer be the need to price off demand. The train operators, quite nakedly, are in it for the money.
The Association of Train Operating Companies accept that fares would rise but say that it would allow operators to offer a greater range of discounted advance purchase tickets. But could they not do that anyway?It is difficult to trust the operators given that ATOC’s commercial director, David Mapp, told The Times that “savers ‘could exacerbate overcrowding’ because companies were unable to set higher prices to deter people from travelling on the busiest off-peak trains”.
Isn’t ‘busiest off-peak’ an oxymoron anyway? Mapp then made a remarkable statement which makes it appear the operators do not want any cheap fare rabble travelling on their trains: “Unlike season tickets, there is no economic justification for savers because they are being offered to customers who are using their income on a leisure journey rather than going to the theatre or buying CDs” which seems to suggest that anyone not travelling to and from work has taken the train to watch the cows go by! Indeed, the operators have poor form on this issue.
A few years ago, they attempted to abolish the highly successful Network Card that allows discounted journeys in London and the South East, and eventually compromised by restricting it to fares above £10. If ministers decided to deregulate the saver fare, the message they will send out is that the railway is for those who can afford it, despite the massive amount of subsidy going into it. With imagination, they could make it popular by introducing a national rail card, something that is widely available in Europe.Instead, the government which promised to get people out of their cars and onto trains, seems to want to do the opposite.