The railways: Yet another broken market in the UK

The price of train travel is being pushed up by government trying to wean the industry off subsidies - an outdared policy from the boom times.

We’ve got to get people off our trains and into their cars. Nobody’s exact words, but they may as well be. The rail industry, firmly backed by successive governments, seem hell bent on seeing how far they can put up fares and get away with it.

This week commuters were met with the wearingly familiar news that rail tickets will rise by an average of 8% from next January. On top of the increases from last year, and the year before, and all the years before that.

With a 60% rise in passenger numbers since privatisation, rail travel has never been more popular. This has resulted in state subsidies ballooning from a pre-privatisation high of £1.5 billion, to just over £4 billion a year since 2006, but with an assumed acceptance that it should now be the passenger who foots a greater proportion of the bill, rather than the taxpayer.

Hence, since 2007 ministers decided on a reduction in train subsidies with the passenger being asked to eventually shoulder 75% of the costs, moving away from the 50-50 split with the taxpayer, as has previously been the case.

But, according to Passenger Focus, an independent transport watchdog, ministers would be wise to avoid such an intended shift, proposed at the height of the economic boom, and coming just before the credit crunch and then recession:

“This policy was born in very different economic times. Passengers cannot be expected to continue paying above-inflation fare increases year on year.”

The same argument to justify the trebling of tuition fees can also be heard when talking about increasing rail fares: those who use the service are affluent (students are expected to earn more in their lifetime than non graduates), and in the minority (however significant a minority they may be).

Yet this view is flawed and ignores the fact a huge proportion of rail journeys are done by people commuting from the suburbs and home counties into London, partly because living in the capital has become so unaffordable. Using the car means endless traffic jams, the congestion charge, and the daily struggle to find a parking spot.

Some commuters have little choice but to take the train. So, while the rest of Europe gets on with expanding their high speed rail lines, reducing the need for domestic flights, and generally making peoples’ lives a lot easier, our train companies do their best to discourage travel at rush hour and make that last minute trip as expensive as possible.

All wonderfully helped by their convoluted, and quite frankly baffling, price structure, with huge peak versus off peak variations.

Beyond this, further explanations for the cost of rail travel come with the allegation a couple of years ago that the previous government put pressure on train companies hoping to secure rail franchises, to increase fares, with those who offered to lower prices losing out. While in opposition, the Tories accused Labour of using:

“The rail franchising process to squeeze the train operators to pay the Government higher and higher franchise payments, when ministers were fully aware that this would push fares up.”

Thus, the huge cost paid to the government to run a franchise has meant that companies have had to recoup their costs somehow, the easiest way being in the form of charging passengers more to use their service.

Passenger Focus has also found that the confusing nature of purchase tickets online has also played a part in inflated prices being paid.

In 2009, Passenger Focus, released its findings from a government commissioned report into fares and ticketing (see page 15 in particular). To nobody’s surprise, Britons paid the most of all the countries surveyed, four times more in some cases, and in particular its ‘walk up’ fares, the ones you buy at the time of travel.

Yet according to the Association of Train Operating Companies (ATOC):

“Fares have risen at a significantly lower rate since privatisation than during the last 15 years of British Rail.”

Indeed, ATOC notes that because of the numerous types of tickets that are now available, the last 10 years has seen the average fare “consistently fallen below the headline increases in fares, as passengers have increasingly switched to buying cheaper fares, such as Advance tickets.”

This of course will resonate most with that ultra-organised traveller, who has little need for flexibility, and a desire to travel sometime between 10am-3.30pm, ideally avoiding London. Needless to say, this is not how many of us lead our lives. 

If you compare this to a country like Belgium for example, this level of planning is unnecessary. The peak and off peak ticket is unheard of. You pay the same whether you book your ticket weeks in advance, or on the day.

In fact, when you buy your ticket, you are able to travel on any train you like, and sit wherever you like. If you work for the public sector, season tickets are heavily subsidised.

One of the problems is that the railways can be firmly placed in the ‘unsexy’ box when we think of all things political. Discussions about fare increases and over-crowding tend to be fleeting, provoking outrage and newspaper columns one day, but then almost as quickly forgotten about the next.

They just don’t generate the level of debate that issues such as crime or immigration do. In fact, they don’t really create much debate at all, being an issue that meets with broad support from all the main political parties, and an area where the public’s views are routinely ignored.

I can’t remember an election campaign where public transport has ever been mentioned.

Our fragmented, over-priced railways, where the interests of private shareholders come before passengers, will ensure that we revisit these same arguments again soon.

Meanwhile, passengers are now paying even more for their season ticket, so that they can stand in an overcrowded train, where the windows don’t open, but where they can still get some work done, if only they manage to balance their laptop on the head of the passenger sitting below them.

32 Responses to “The railways: Yet another broken market in the UK”

  1. Ben Mitchell

    RT @leftfootfwd: The railways: Yet another broken market in the UK http://t.co/FXmr4gV

  2. Linda Rothstein

    RT @leftfootfwd: The railways: Yet another broken market in the UK http://t.co/FXmr4gV

  3. Mr. Sensible

    I think that failing to deal with this issue properly and reducing the taxpayer subsidy was one of the previous government’s biggest mistakes.

  4. Mr. Sensible

    After all, a good yet affordable railway is in everyone’s interest, and particularly the interest of the environment. I seriously think we need to revisit road pricing.

  5. Dr. Matt Lodder

    ★ " The railways: Yet another broken market in the UK http://t.co/2kioiuq "

  6. Hens4Freedom

    RT @leftfootfwd: The railways: Yet another broken market in the UK: http://t.co/6tJLcC3 : writes Ben Mitchell #NewsClub

  7. JC

    Difficult to understand why I should pay increased taxes to allow someone to commute into London. I earn £17k and live in Devon and am paid the local going rate for the job. I also have to commute 14 miles each way. Surely the best way would be to raise taxes on London businesses as they realise the benefits of cheap train travel.

  8. DrKMJ

    RT @leftfootfwd: The railways: Yet another broken market in the UK: http://t.co/DGkjlLE : writes Ben Mitchell #NewsClub

  9. nordin pumbaya

    RT @leftfootfwd: The railways: Yet another broken market in the UK: http://t.co/DGkjlLE : writes Ben Mitchell #NewsClub

  10. Hitchin England

    RT @leftfootfwd: The railways: Yet another broken market in the UK: http://t.co/mKW0ht7 : writes Ben Mitchell #NewsClub

  11. Extradition Game

    RT @leftfootfwd: The railways: Yet another broken market in the UK: http://t.co/OITh0y4 : writes Ben Mitchell #NewsClub

  12. 45apl

    RT @leftfootfwd: The railways: Yet another broken market in the UK: http://t.co/tR5O69E : writes Ben Mitchell #NewsClub

  13. Trakgalvis

    RT @leftfootfwd: The railways: Yet another broken market in the UK: http://t.co/KuM19dh : writes Ben Mitchell #NewsClub

  14. Watching You

    RT @leftfootfwd: The railways: Yet another broken market in the UK: http://t.co/KuM19dh : writes Ben Mitchell #NewsClub

  15. Hitchin England

    RT @leftfootfwd: The railways: Yet another broken market in the UK: http://t.co/mKW0ht7 : writes Ben Mitchell #NewsClub

  16. Mr. Sensible

    Cheap train travel? Not sure about that one.

  17. 45apl

    RT @leftfootfwd: The railways: Yet another broken market in the UK: http://t.co/tR5O69E : writes Ben Mitchell #NewsClub

  18. DrKMJ

    RT @leftfootfwd: The railways: Yet another broken market in the UK: http://t.co/DGkjlLE : writes Ben Mitchell #NewsClub

  19. Political Planet

    The railways: Yet another broken market in the UK: The price of train travel is being pushed up by government tr… http://t.co/G0OYHZD

  20. Dave Citizen

    One thing I can’t get my head around is why tax payers contribute funds to a system which has private operators taking a profit out. I realise that the private investors want to make money on their investment but what’s the incentive to the rest of us? Where’s our profit? Or is it like with the banks where we put in the milk so a few big cats can take the cream off the top?

  21. Richard Barnett

    The railways: Yet another broken market in the UK: http://t.co/Xk1jEjE : writes Ben Mitchell

  22. Ben

    RT @leftfootfwd: The railways: Yet another broken market in the UK http://t.co/3tfE4i7

  23. John Popham

    RT @Benjionthetrain: RT @leftfootfwd: The railways: Yet another broken market in the UK http://t.co/HiNaOoI

  24. Elrik Merlin

    RT @leftfootfwd: The railways: Yet another broken market in the UK: http://t.co/juLgOIW | Why's it a "market" at all? Nationalise 'em!

  25. Chris Bowden-Smith

    RT @leftfootfwd: The railways: Yet another broken market in the UK: http://t.co/juLgOIW | Why's it a "market" at all? Nationalise 'em!

  26. FutureLeft

    RT @leftfootfwd: The railways: Yet another broken market in the UK http://t.co/sIVYezE

  27. Gareth Jones

    http://t.co/umEP2nl The railways: Yet another broken market in the #UK #transport #publictransport

  28. Wheels still on despite HS2 delay | Left Foot Forward

    […] also: • The railways: Yet another broken market in the UK – Ben Mitchell, August 19th […]

  29. cheap train tickets

    Thanks For posting . Its Really nice . Keep update a more article.Thanks for sharing the knowledge.

Leave a Reply