Rail 851: The railways lose passengers while I lose my wallet

One can almost hear the tunes of the Peter, Paul and Mary song: ‘Where have all the passengers gone? Long time passing’.  Indeed, suddenly the reduction in passenger numbers seems to be getting serious. What started as a blip, a dent in the curve, now seems to be a trend and the implications for the rail industry, and indeed transport providers as a whole, are very serious.

To understand why the growth, which has been continuous for two decades apart from a couple of brief periods, first because of the meltdown on the railways following the Hatfield train crash and secondly following the financial crash of 2008. The growth has had numerous underlying causes, but also there are various unknown unknowns which have mystified people in the industry, notably because the growth has not followed long term trends when changes in passenger numbers mirrored GDP growth. Instead, the growth has been far greater than would be expected from past trends.

There is little doubt that the key factor behind the growth has been greater affluence, with more people able to afford to travel combined with a growing disillusion with the ‘delights’ of driving. Talking to Professor Chris Nash of Leeds University a few years ago about this, he said that modal transfer to car reached its peak by around 1990 by which he meant that everyone who transfer their journey to driving had done so. Everyone who wanted a car could get one and yet demand for travel continue to grow with the result that many of these extra journeys were undertaken by rail.

Over the early part of this period, there was too a shift in the relative costs of driving and taking trains, thanks to the fuel tax escalator, one of the best ever transport measures, which lasted from 1993 to 1999. Then there are a whole host of rather random factors such as the huge increase in university students who tend to travel between home and college, the development of many old railway sites near stations which inevitably are bought by people who are likely to commute, the ability to use devices on trains (even though the rail companies have been far too slow to ensure that mobile phone communication and internet services are constantly available on journeys) and, probably the most important of these factors, the huge growth of employment in central London which, realistically, is only accessible by rail.

As for endogenous – to use Gordon Brown’s favourite word – factors, i.e. those which are a result of developments within the industry, there is no doubt that the introduction of new trains, increased services and the much easier access to information through the internet have all contributed. It is indisputable, however, that little of the growth has actually been generated directly by the railway companies and that is begs the question of whether there is anything that the industry can do itself to try to reverse the decline.

Even at times of weak economic growth during this long period numbers have still risen inexorably, despite the predictions of Mystic Wolmar who has consistently forecast doom. Well Mystic may belatedly have got it right but the reasons for the decline are unclear. The numbers are certainly worrying. After years of growth averaging around 5 per cent, overall passenger numbers have fallen in four of the past five quarters with much of the decline being in the London commuting market. Part of that has been the ongoing dispute on Southern rail but even without those, the Department for Transport has estimated that rail use would have increased by 1 per cent in that market rather than fallen 1 per cent.

Nevertheless, the Department has recognised that a fundamental shift, particularly in the London commuter market, is taking place. It was brought home to me when a rail manager told me ‘Friday travel has been declining and that Thursday has become the new Friday in terms of peak loadings’. Several other managers have mentioned a similar phenomenon. The main driver, of course, is the machine on which I am writing this and its ability to connect with the outside world. Why go to work every day to sit in an office when everything you do can be undertaken remotely? When I first started writing this column in 1995 (Rail 262!) , I had to fax it over to Rail’s offices I had no email and when I did acquire it, there was quite a palaver about connecting up. When I went on holiday, I would have to write columns in advance or, as I did once, phone over the copy.

The implications of these changes in technology have only just begun to percolate through and, frankly, they have taken longer to have an impact on rail travel than dear old Mystic imagined. Things are changing now, though, as flexible working patterns have become attractive to companies as a way of reducing costs. Young people in particular are no longer prepared to put up with five days per week of what the French disparagingly term Métro, boulot, dodo,  –Tube, work, sleep. So many people are now self-employed or working part time. The high cost of childcare, which is a great deterrent to women working full time, is another factor cited as reducing demand for rail travel. There are genuine widespread fears within the industry that there may a long term decline or, at least, no growth which will play havoc with several franchises.

If the era of a captive market of commuters taking the same train every day and renewing their season ticket annually is over, the train operating companies and, particularly, the government need to react. The operators must push ahead with plans for more flexible arrangements, allowing part time season tickets or creating a carnet system that regular passengers can use. It is, I am told, the government that has been blocking these changes but that is probably because the operators are demanding too much compensation for any potential losses. Herein lies the weakness and inflexibility of the franchising arrangement. The companies must be prepared to take a bit of a hit if it means that in the longer term they are providing a product which passengers want.

There is no doubt, too, that the reversal of the trend of the 1990s, with rail fares now going up higher than fuel prices, is having an impact with people jumping in their cars because it is cheaper for them. The era of above inflation rises must end and, indeed, government must go further by actually encouraging modal shift, something that goes completely against the Tory grain – and to be fair, Labour, with the exception of John Prescott, has refused to do when in office (I remember Alistair Darling, not the worst transport secretary we have had, being rather exasperated when explaining to me at a press conference that he was not in the business of encouraging people to take the train rather than the plane between London and Scotland.)

Writing an article entitled ‘Government must face up to congestion’ in Passenger Transport magazine, Norman Baker, the former LibDem transport minister in the coalition government of 2010 – 15, highlighted the fact that the parallel decline in bus travel is largely down to increased congestion as, for the first time in a decade, traffic is rising steeply. While ministers wring their hands, they refuse to implement bus friendly measures and, in fact, are making cuts which reduce the number of services. Instead, they throw money at the road construction industry even though long established research shows that building more roads simply encourages more people to get in their cars. Yet, as he points out, most politicians recognise that climate change is happening and will bring about disastrous consequences.

He recommends increasing fuel duty and stopping the rail fare rises, something one wished he had pushed for harder when in office. However, Baker is right. We need politicians to understand that congestion doesn’t just happen, it is a result of a series of mistaken transport policies. The car lobby, however, still rules supreme. If only the rail industry had the wit and the leadership to highlight Baker’s arguments and ensure that politicians of both main parties get on board, then the trend might be reversed. But it will take a lot of effort.

 

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