Bill Totten's Weblog

Thursday, February 08, 2007

The Big Question

Why are rail fares rising so fast, and can these higher prices be justified?

by Ian Herbert

The Independent & The Independent on Sunday Online Edition (January 03 2007)

Why are we asking this question now?

Because another round of inflation-busting increases in rail fares has just been announced which, for those returning to work yesterday, will have provided some alarming experiences at the ticket desk.

For those who chose to travel from Glasgow to London, for instance, there was an eye-watering 8.1 per cent increase on last year's fare, which now stands at GBP 240 for a standard and open return. London to Plymouth was an equally miserable experience: it now costs GBP 214 for a standard open return - an increase of 12.6 per cent.

London Tube travellers were also hit, particularly those still paying cash for their journeys rather than using Oyster travelcards. The minimum single fare on the London Underground for a customer paying cash is now GBP 4. The travellers' watchdog body Passenger Focus describes the rises as "very disappointing".

Who is affected?

The fares are a disaster for those who make regular peak-time long-distance business trips - from Manchester or Newcastle to London, for example - especially if they don't book well in advance. But the increases will be barely felt by those who do not travel at peak times and who can book weeks ahead.

The current overcrowding is largely confined to cities such as London, Manchester, Leeds and Newcastle, where more people than ever are using trains at peak-commuting periods and there are now simply too many passengers and not enough seats.

Across the entire railway system, overcrowding in 2005 was only just below the Government's limit of three per cent more passengers than rated capacity, and on the busiest commuter lines the limit is regularly flouted.

The rail industry argues that higher prices are one way of encouraging commuters to travel at less popular times of the day. The two worlds of travel are demonstrated by the London Euston to Manchester trip: a 9 am standard single ticket today will cost GBP 109. Book it a month in advance, travel at midday and you will pay GBP 12.50.

What happens if the high fares don't deter rail travellers?

The environmental risks are profound because business travellers will turn in increasing numbers to low-cost airlines instead, to get them around Britain. Yesterday alone, there were thirteen flights from Manchester Airport to London. Even a last-minute flight costs less than GBP 100 (GBP 97, in bmi's case) which is much cheaper than the rail equivalent. That flight will generate 0.09 tonnes of carbon dioxide. A train's emissions are one-tenth of the figure.

Environmentalists say the continual above inflation increases in rail fares fly in the face of government pledges on carbon emissions. They want the pricing regime for public transport to be at least the same as for air and road travel.

How have the railways fared under this government?

As opposition spokeswoman on transport, Clare Short pledged in 1996 to renationalise the railways. But for several years after Labour came to power in 1997, there was little action, and what progress had been made was delayed by the Hatfield disaster in 2000, which prompted a huge investment in safety. There have been improvements. In 2000, the passenger rolling stock was, on average, 21 years old. Investment by train-operating companies has now pushed that down to fifteen. The Public Performance Measure, which follows punctuality and reliability, has also been rising every year since 2001. With 83.6 per cent of trains running on time last year, Britain can compare itself to Germany and Switzerland. Greater reliability brings greater demand, however. UK rail use has grown at a higher rate than most EU countries, with a two per cent climb since 2003.

Will the Government spend more to increase capacity?

It seems unlikely. Since the end of the First World War, when the railways were in serious financial trouble, governments have tried to avoid increasing the amount of subsidy which goes into the railways: that was what inspired the rail privatisation of 1993. The problem is that rail improvements swallow up vast amounts of money. Network Rail, which owns the rail infrastructure, suggested last year that the Government might spend GBP 8 billion to upgrade stations and lay new track. That horrified ministers, for whom the network already costs considerably more than they want to pay.

Partly because of stricter safety requirements introduced after the Hatfield crash, which killed four people in 2000, railways account for forty per cent of the total transport budget - but only eight per cent of journeys made.

One option put forward by some analysts is to reduce the amount of money spent on the relatively little-used rural services. The investment per passenger mile for these lines is huge, with many of the trains maintained to the same standard as 90 mph mainline services.

Cutting rural lines would prompt accusations that the Government is repeating the act of Dr Beecham, who axed nearly one quarter of the system forty years ago. But the Government should at least raise the issue by demonstrating to the taxpayer what some of these lines are costing them, according to Professor Stephen Glaister of Imperial College. Last year's Eddington committee, which examined the future of public transport, made the same observation.

Are things better in continental Europe?

Generally speaking, yes. In France, Spain, Germany and Switzerland, there is a deeply ingrained culture of public investment in railways, which in most of those countries are considered a public service that should not be subject to the vagaries of private-sector operators. Ticket prices reflect this. There are none of the big differentials between peak and off-peak times.

The cost of travelling from Paris to Metz, in Lorraine, eastern France (at 206 miles, roughly the equivalent of the London Euston to Manchester trip) is GBP 32, whatever time of the day you travel. None of the standard prices would budge if you booked them two weeks in advance or ten minutes before your train departed. British rail fares are three times higher than the rest of Europe, according to figures collected by the rail union TSSA. But the cost of major public investment in the railways is hurting some cash-strapped continental governments.

Is there any prospect that the situation will get better?

This year presents a big opportunity. In the summer, a railways White Paper is expected to be published, setting out the next thirty years of rail travel in Britain. Environmentalists and rail passenger groups see this as a key time to examine how capacity in the railways might be increased, with the incentive of tackling climate change in the process.

Are the higher prices fair to rail travellers?

Yes ...

* Over the past decade, trains have become more reliable and safer. A better standard of service comes at a price

* Uproar over rail prices does not reflect the railways' usage: only six per cent of the population - most of them affluent - travel by train

* Businesses, who can afford it, are worst hit by price increases - not the poor or elderly, who tend not to travel at peak times

No ...

* If we do not persuade more people to travel by train, there will be further increases in environmentally damaging car and air travel

* Train operators receive large government handouts and are profitable. They should not be allowed to use demand to inflate prices

* Gazprom would make the UK far too reliant on Russian gas at a time when government policy is to diversify energy supplies

Copyright (c) 2006 Independent News and Media Limited

Bill Totten


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