Rail 873: A small step towards sorting out the fares

It is one of the great ironies of rail privatisation that it was supposed to free up the private sector to be innovative and groundbreaking and yet the train operators have often proved to be more conservative than British Rail. This is not in fact always their fault but is a result of creating a fragmented structure that is also highly regulated and their need to satisfy the short term interests of their shareholders.

Nowhere is this more apparent than in fares policy. Apart from offering the odd cheap advance fares, the train operators have done little to change the system they inherited from British Rail more than 20 years ago. It took them until 2018 to offer to add to the range of railcards, with the ‘Two Together’ and more recently an extension of the young people’s railcard to cover 26-30 year olds. Constrained by regulation on season tickets and off peak returns, they have shown little imagination on the fares over which they do have control. Some train operators, notably Virgin West Coast, have pursued a self-destructive policy of hiking up anytime fares so that they have reached quite ridiculous heights resulting in the absurd situation of peak trains being half empty while those just after are bursting at the seams. Does a £350 walk up return fare in standard class between London and Manchester make any sense at all, apart from attracting bad publicity for the industry and deterring people from taking the train because occasional users might not realise that these fares are only for certain times of the day?

The government, too, has been guilty of contributing to this paralysis. Any attempt by the operators to try to change the system has, in the past, been rebuffed by ministers worried that any reform might create losers who will then bang on their surgery doors or write angry letters to the local papers. Perversely, though, they have pursued a policy of angering all rail passengers by insisting on inflation (in fact often inflation plus) annual rises since, it seems, dinosaurs roamed the earth. Therefore an incomprehensible system has been allowed to fester largely unchanged. To be fair to today’s rail managers, this is not a new problem.  There were numerous complaints In the 1930s about incomprehensible ticketing systems and railway companies were accused of dodgy practices. I am indebted to Michael Horne, the historian of the Underground, who told me in a tweet that there was evidence to the Royal Commission on Transport in 1929 which complained: ‘It was often the case that passengers on the same train, travelling between the same places, were booked at half a dozen or more different fares.’ Admitedly, this system was made more complex by British Rail in an effort to be more commercial and then tinkered with further since privatisation which has created a system which only Barry Doe fully understands.

Hopefully no longer. It is enormously welcome that at last the Rail Delivery Group, that sadly misnamed organisation, has finally ventured where previously it did not dare to tread, by putting forward a possible basic structure for a new system – well not entirely new but at least one that would offer rather more transparency to passengers and more predictable pricing. Called optimistically, Easier fares for all, the report is the most honest assessment of the failings of the fare system to come out of the industry since privatisation.

The two key changes would be the introduction of single leg pricing, which would guarantee, for example, that someone buying a ticket to travel outward at a peak time but planning to return off peak would get two single fares that reflected this. The current situation by which a return for off peak fares is £1 more expensive than a single would disappear. The RDG envisages that the new system would mean more people would travel on the shoulders of the peak, making better use of capacity and reducing overcrowding because it would allow ‘customers to better match actual departure times to preferred departure times’.

The other main innovation would be the introduction of pay as you go fares – in other words some sort of Oyster type system – across the country for commuter journeys. This is partly in response to the changing market which has seen season ticket sale go down as work patterns change. Many workers now only travel three or four times to their office each week, rather than five and a weekly season ticket is generally only worthwhile purchasing for more than three return journeys. Under the new arrangements, people would no longer have to make this choice in advance but, rather, have the fares they pay capped automatically at the weekly season ticket rate.

More controversially, the RDG is suggesting, too, that the current blunt instrument of regulation whereby off peak fares are controlled would be abandoned in favour of ‘some overall regulation of the overall level of revenue that can be raised’. One would have more trust in the RDG if its members had not over the years pushed up to the unregulated fares, as mentioned above, to stratospheric levels.

One problem is that the suggestions in the report had to be framed within a framework of revenue neutrality and this requirement, imposed by government, is clearly a mistake if real reform is being sought. There are bound to be more losers as a result of this constraint and that will ensure that the change, if it ever comes about, will be portrayed negatively by the media. The lesson of introducing changes to welfare benefits should have been learnt – they must be introduced in such a way as to limit the number of losers even if, later on, the new system is used to reduce their cost.  The RDG argues, rightly, that a more coherent and transparent system would attract greater numbers of people on to the railway, and therefore this extra revenue would enable the system to be introduced in a way that limited the number of users. But that would, sigh, take imagination from ministers!

Nevertheless, this is a good initial effort, the first time the industry has come together post-privatisation to attempt a very necessary reform. In a way, it has been forced on the RDG. The way that the rail system is being used has changed, given fall in season ticket sales and the higher number of off peak journeys, something that actually is highly profitable for the rail companies. Interestingly, the consultation which resulted in this report started before the Williams Review was initiated but the RDG has cleverly produced it as a submission to the enquiry. The chances of radical reform emerging depend entirely on the nature of the secretary of state when the eventual Williams report is published, assuming, of course, that he takes on board the ideas within it.

The ball will then be in the government’s court and ministers would have to act very differently than they have in the past when previous, behind the scenes, attempts by the RDG to change the system have been rebuffed precisely because there would be losers. Even with a fair wind behind these plans, the need to introduce the technology will lead to a delay of at least three to five years. There is then the added problem that the reform would need to be introduced system wide which inevitably would mean that some franchises would have to be amended part way through the contract, not an easy – or maybe not even a feasible – task. At least the debate has started but passengers should not hold their breath and nor, unfortunately, can they expect across the board reductions in the fares they pay. Nevertheless a more rational system would be widely welcomed.


Snow no problem


Waiting at St Anton station in southern Austria for a train to take me and my wife to Innsbruck a couple of weeks ago, I could not see the tracks as a good four inches of snow had fallen overnight. As we were taking a plane, I was a bit nervous and kept referring to the OBB website for any sign of delays but there were none. The announcement, which of course is repeated in English, was not entirely reassuring as it was clearly automatic but the destination board suggested there was no delay.

So bang on time, in the dark, at 7am, the RailJet service arrived pushing aside the snow with all the disdain of a lion pouncing on a baby deer. What’s more, on board there was a buffet providing reasonably coffee along with croissants and pastries and for those too lazy to move there was a trolley service too. The seats were comfortable, the announcements confined to station arrivals – no equivalent of ‘see it, say it, sorted’ – and the ticket inspector was jolly.  The train had started in Zurich and was essentially crossing much of the country being due to terminate at Vienna and arrived in Innsbruck one minute late as shown by the hugely informative display panel in each carriage. OBB is of course state owned. Just saying.

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