The responses to this year’s annual rail fares increase were all too predictable. The industry should consider some different tactics

 

Rail passengers have faced years of above inflation fare increases

 

Another January, another in the relentless sequence of fare rises on our trains. And another set of all too predictable responses.

So first the facts: fares will increase by an average of 3.1% from January 2, an increase roughly twice that of average earnings. Some people may now be paying a fifth of their salary to get to work and back.

Fares have risen by 37% over the last 10 years, significantly ahead of wage inflation. Meanwhile over the last nine years, fuel duty for motorists has been frozen and petrol prices have actually come down, reflecting the price of a barrel of oil on the world market.

Then the responses, as familiar as a wet summer’s day in Manchester. First up is the government, in the shape of re-heated transport minister Andrew Jones, who points out rail fare increases have been held at the level of inflation for the last six years.

Yes Andrew, but that is still six years of increases compared to six years of no increases in fuel duty for motorists. That is a political choice. You also glide over the fact that the increases are linked to RPI, the Retail Price Index, an index which Mark Carney, the governor of the Bank of England, described earlier this year as having “no merit”. Mr Carney seems to be making a habit of relaying inconvenient truths. Good on him.

If the alternative index, the Consumer Price Index (CPI) had been used, fares would have risen by much less

If the alternative index, the Consumer Price Index (CPI) had been used, fares would have risen by much less. Last July for example, the annual RPI rise was 3.6% and the CPI equivalent just 2.6%.

Not that the Department for Transport is against CPI, of course. Back in August, transport secretary Chris Grayling was urging the unions to switch from RPI to CPI to determine future wage increases, calling the present pay arrangements “inflation-busting” (whereas RPI fare increases are presumably merely in line with inflation).

His Conservative colleague Huw Merriman recently put it this way:

“If the unions are really serious about limiting fare rises, they should accept the same method for setting pay which their passengers are limited to, rather than threatening more strike action.”

And what of the unions? Well their enthusiasm for RPI increases does not seem to extend from wages to fare levels.

The RMT, in a cliché so tired it must have been borrowed from Rip Van Winkle, describes the looming fare increases as “another kick in the teeth for Britain’s passengers.”

For literary variation, the TSSA general secretary, Manuel Cortes, calls it the “annual kick-in-the-teeth time”.

Just how many teeth are left?

“The only solution to Britain’s fare rip-off,” says the RMT general secretary Mick Cash, “is a publicly-owned railway run solely in the public interest free from the greed of the private train companies.”

But hang on, around half the fares like season tickets and off-peak returns are determined by the publicly-owned government, and that half has actually gone up marginally more than those controlled by the private train companies. He might also ask why walk-on fares on the privately-run Hull Trains and Grand Central are significantly cheaper than the state-run operation running on the same tracks.

As for the “greed”, the rate of return for these private companies is around 2 to 3%, a much slimmer margin than almost anywhere else in the private sector.

Meanwhile Jeremy Corbyn, the man who chooses to sit on the floor of a train while seats are available, at least when photographers are present, calls the forthcoming fares increase “an insult” and pledges to “take back control” of the railways. We have heard a good deal about “taking back control” recently, and none of it very well grounded.

The Labour leader seems not to understand that Network Rail is already in public ownership and that the state controls not just half the fares, but much of the timetable, all the safety standards, and takes all the important rolling stock decisions. Is he ignorant of all this or deliberately making an argument he knows to be dodgy? And by the way, is his answer to take away responsibility from the train companies and hand it to a Tory government and a Tory secretary of state that he regularly slams as useless and not acting in the interests of passengers?

So what do all these responses have in common? They are selective with the truth and designed to advance a political aim without letting inconvenient facts get in the way.

The public, who have had to put up with above CPI-inflation rises for years now, and who have had to endure a particularly torrid 2018, with the big timetable meltdown, punctuality at its lowest level since 2006, and it seems, never-ending strike action by the RMT, are unsurprisingly and justifiably incandescent with the latest increases.

Also unsurprising, given the selective spin they are fed, is a general failure to understand the complex nature of the railways. A quick glance at the Daily Mail feedback section of their website is instructive.

One Christine Swan writes: “They are all private companies and do exactly what they want and aren’t governed by performance targets.” No they can’t, and yes they are.

Another, Kieran Taylor, writes: “The rail services are still not improving, so where is our money going?”

Yet the government is engaged in the biggest investment programme since the 19th century. I know – I helped start it. Network Rail will be tackling 330 projects over this Christmas period alone.

Under the circumstances, you would have expected the rail industry to have initiated a robust and effective campaign to spell out the facts to passengers. After all, the Rail Delivery Group, which brings together the train companies, the freight operators and Network Rail, and which is supposed to be the PR voice for the industry, has been in existence since 2011.

Now the creation of the RDG was a sensible step and it has been more useful at getting across generic messages than came out of the vacuum that preceded it.

But the RDG has created a glass ceiling for itself which muffles the message. It will not ever criticise the government, which it perceives to be biting the hand that feeds it. Honesty, the RDG seems to believe, may have unwelcome consequences.

This is most noticeable with Southern, who are subject to a management contract let by the DfT, and who have to operate on the tightest of leashes, but who have to take the blame for anything that goes wrong, whether it is their fault or not. Readers will recall how Chris Grayling was fast out of the traps to blame Southern management (and Network Rail) for the timetable chaos earlier this year, a criticism met with a mute response from Southern. Yet as facts tumbled out, the culpability and shortcomings of Mr Grayling and his department in this matter became all too clear.

In terms of the fare rises, we do not hear from the industry that half the fares are set by government, that the choice of RPI rests with politicians, and that the government has a policy of shifting the balance of cost from the taxpayer to the train passenger. Nor does rhw industry point out that the operation of the railways is largely controlled by the state, so the idea that “renationalisation” will make life a whole lot better for the passenger is not one that stands up to close scrutiny.

So what do we hear from the industry? Well there are the usual sympathetic noises and standard apologies, and the argument that the fare increases are to help pay for the investment programme, which may be the truth but is not, as explained above, the whole truth.

Robert Nisbet, speaking from London Bridge for the RDG, this year blamed the rising cost of fuel. Sorry? There must have been some pretty bad forward buying on future fuel deliveries.

The RDG needs to start telling it as it is, and stop meekly accepting the role of whipping boy for the government of the day. If it does not set out the facts, nobody else will.

The RDG needs to start telling it as it is, and stop meekly accepting the role of whipping boy for the government of the day. If it does not set out the facts, nobody else will.

It needs to be less defensive about the fare structure generally. Yes, anytime returns are very expensive and compare unfavourably with other European countries. But in other regards, prices compare well. The i newspaper recently considered four comparable routes in England, Germany, France and Italy. The price of an off-peak advance ticket here was half the price of the French and Italian equivalents, and 40% cheaper than the German. The RDG needs to make this sort of comparison better known, and also explain the basics better – why peak travel is more expensive than off-peak travel.

Back in the spring, the RDG announced it was consulting on significant changes to ticketing arrangements, on a cost neutral basis. It has apparently received around 20,000 representations, but we have heard no more publicly about this since. This is a pity. It is a good initiative and it would have been a positive aspect to the response on the latest fare increases to have given an update and get the RDG on the front foot a bit more.

In the meantime, the industry should note the changes introduced by Virgin to fares charged on Fridays (PT196). Removing afternoon peak ticketing restrictions has not only eased overcrowding considerably, but attracted a whole lot more passengers and broken even financially.

A while back, I persuaded Southern to reduce some fares from Eastbourne and Seaford into Lewes by a third so as to attract drivers off the parallel A roads. They finally gave in, largely to shut me up I think, but then afterwards told me somewhat sheepishly that they have seen an upsurge in passenger numbers and that too had broken even.

The train companies could usefully look for more instances where this approach might work and get some brownie points from customers too. They need them.

 

About the author:

Norman Baker served as transport minister from May 2010 until October 2013. He was Lib Dem MP for Lewes between 1997 and 2015.

 

This article appears inside the latest issue of Passenger Transport.

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