Fares review dodges the big issues 3

November 14th, 2013 TSSA Journal

It was never going to be easy sorting out the chaotic fares structure. Simplification, standardisation, information, clarity, smartcards  – all these are buzz words for what the long delayed fares review published in early October was going to solve e. Not surprisingly, the review did not manage to address all these problems comprehensively, a near impossible task. However, while undoubtedly the review did not go far enough in dealing with crucial fundamental issues or even sorting out some ridiculous anomalies, there are several aspects to cheer about, as witnessed by the Campaign for Better Transport’s comment that it ‘does contain some welcome initiatives’.

The review, which was announced 18 months ago and was originally supposed to have been completed in the spring , ducked out of the fundamental problems, such as trying to standardise the fares system to deal with complexities like two people sitting next to each other on a train having paid dramatically different amounts.

Nevertheless, tentatively, a few steps have been taken in the right direction. First, the government has finally recognised that there needs to be some sort of compromise arrangement between a full season ticket, which gives massive discounts of up to two thirds for commuters, and the one off ticket which works out very much more expensive for part time workers. More and more people now work part time – often of course unwillingly – and even those in full time work can now, with the use of technology, stay at home for a day or two every week. The great advantage for the industry as a whole, and indeed for the government which always ends up bankrolling railway investment, is that a more flexible ticketing system would reduce peak demand and therefore pressure for investment in new rolling stock or extended platforms.

Therefore, the announcement of a trial – with operators expected to bid to host it – for more flexible season tickets is to be welcomed. So is the other trial, for the removal of the daft anomaly whereby a return journey for long distance services often costs just £1 more than the single. This is a leftover from British Rail and makes no sense in a world where people often have occasion to travel one way by train and the return by car or even plane. Charging half the return fare for a single leg makes much more sense, but again the approach by the government is rather timid. Why not simply insist that the price of a single leg should be half the off-peak return?

The government too, went halfway on the scandal of ‘flex’ on fares rises. This is the flexibility given to operators to increase some fares by up to 5 per cent more than the overall inflation plus one per cent rise. There is a widespread perception that this has been abused by the operators. As Anthony Smith of Passenger Focus suggests,  ‘allowing so much flex meant that effectively the train operators were allocating public subsidy by imposing sharp rises on some commuters and lower ones on others.’ Moreover, he is convinced that ‘there is clearly an element of revenue generation in the flex arrangements. Otherwise, how come when Andrew Adonis got rid of it, he had to pay compensation to the train operators?’ The government has agreed to reduce this to 2 per cent, although organisations like the Campaign for Better Transport would like to see it abolished entirely.

One aspect that Passenger Focus has long battled on but lost out in the face of strong opposition from the train operators was over the issue of forcing passengers to pay a full fare if they have the wrong advance ticket for the train without the money already spent being taken into account. The operators argue that if they did not impose what amounts to a penalty fare many people would buy advance tickets but hop on any train and therefore cheat the system because they  would only risk paying what they should have done anyway. In fact, it is passengers who are being cheated. Some advance tickets cost as much as £120 on the London – Manchester route and someone taking a train 20 minutes late could be made to pay an extra £148 – this is clearly ridiculous. Most people are honest and not trying to cheat the system but the view of the operators seems to be that all their customers are dishonest. No wonder the companies are unpopular.

The worst aspect of the fares review is that there has been no commitment to move away from the inflation plus one per cent annual fares rises for regulated fares. There was a bit of good news tucked away in here. As Smith pointed out, ‘we have managed to save the Saver, although it is no longer called that, to ensure that off-peak fares remain regulated. We have been fighting this for years and it is now accepted, which guarantees that leisure users can continue to have access to relatively cheap journeys’.

As Smith says, however, it is very much relatively.  Patrick McLoughlin, the Transport Secretary, was taking the proverbial when, in announcing the fares review, he said that the government had ‘reduced average rises from three per cent to one per cent in real terms’. That is bare faced cheek. It was only his government, not Labour, which suggested inflation plus 3 per cent, and only relented under huge public pressure. There has, in fact, now been 10 years of above inflation increases, something which is ultimately unsustainable and which means that the passengers’ contribution to the overall railways’ income has gone from one third to two third.

Smith, quite rightly, wanted to see a date to end these high increases, but the government has made no commitment. Yet, it seems the government is always prepared to stop fuel tax rises, and yet imposes these swingeing increases on rail travellers annually.

There remains, therefore, much to campaign on. The above inflation rises will have to end eventually and flex still gives too much opportunity for the operators to fleece passengers. The other big issue looming in the distance, which will have enormous effect on the question of ticket offices, is the introduction of smartcard technology. Given that this is seen as essential for the more flexible season ticket arrangements, and that the Oyster pay as you go system has proved so successful that is delivering continued 5 per cent annual growth on National Rail use in London, smartcard will inevitably become the norm, initially for commuters travelling short distances but quite possibly eventually across the whole network.  The introduction of smartcards should not be used as an excuse to dispense with staff who will still be needed to help many rail passengers, especially occasional users, and to make stations feel safer.

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  • David Mitchell

    Nice article but a couple of points.

    I am all for offering flexibility to people who travel regularly but maybe not 5 days a week. But it does need to properly thought through and costed. If people are paying less then (once the trial is complete) that loss will need to be made up somewhere. That’s either going to come from the taxpayer (good luck with that) or from other rail fare payers. You might make the argument that season ticket holders should lose some of their discount. I’m sure they’d say their fares are high enough already. At the very least we should go into this knowing there will be losers as well as winners.

    On your point on advance fares you are obviously right that “most people are honest” but that misses the point. It will only take a small number of belligerent offenders to have the whole system fail. While the private rail companies have a lot to answer for they are not in this instance that out of line with the rest of business in general or indeed other transport operators. Miss the outbound leg of your discounted air ticket and the airline (all of them not just the low cost ones) will help you out further by cancelling the return leg and pocketing the entire ticket cost.

  • Paul Holt

    Penultimate paragraph: “…the government is always prepared to stop fuel tax rises…”. Please provide the data for the last fifteen-plus years to support that statement, because common sense (and years watching petrol prices) find the contrary.

  • stushurlock

    There’s a simple way that one of the problems with Advance tickets can be partly resolved. If the passengers realise that they aren’t going to catch the right train, or want to catch an earlier one, then they should be able to claim refunds in the same way as they can with ‘normal’ tickets -ie by paying a £10 fee for each one. Then that passenger can buy another ticket knowing they’ll get most of their money back. Currently there is some real incentive to try to ‘wing’ it, so the system is actually encouraging cheating, not discouraging it.

    On the train is a different problem. If the passenger can produce a decent id then the revenue protection person should be able to take the paid fare into account with, say, a £15 deduction. The data could then be centralised and any ‘frequent flyers’ would be spotted.


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