Labour must pledge to end inflation-busting train fare hikes

13th August, 2013 7:00 am

With Ed Milliband back from his hols and looking for some definitive policies, here’s a nice easy one: promise to stop the above inflation fares rises that are deterring people from using trains and causing increasing anger.

The spotlight will again be on rail travel this week as next year’s fare increases are announced. For the past decade, successive governments have used a formula of imposing increases of 1 per cent above inflation on season tickets and standard off peak fares. This has resulted in today’s announcement of a 4.1% rise, following a similar 4.2% rise last year. Worse still, the Government allows a level of ‘flex’ which means that some fares can go up by up to RPI + 5% – in other words over 9% – provided that the overall average of fares is kept to the RPI + 1% figure. Andrew Adonis, when he was Transport Secretary, actually stopped the flex arrangement but it has been reinstated.

The formula’s rationale is that farepayers should bear most of the burden of paying for the railways. Under Labour, the cost of the railways was split fairly equally between taxpayers and farepayers. Now the ratio is around two thirds farepayer, one third taxpayer. This is a misguided policy since the railways provide all kinds of broader social and economic benefits which are not captured through the fare box. A certain level of subsidy is therefore justified.

The current Government’s policy focuses too heavily on financial factors. It runs counter to several aspirations that a Labour government should be pursuing such as reducing CO2 emissions, cutting congestion on the roads and giving those without cars the opportunity to travel cheaply around the country.

It is, also, patently unfair. Ironically, the idea of giving government the power to regulate fares was designed to protect those with no other choice than using the train, such as commuters and people needing to travel long distances that did not have a car. Initially, after rail privatisation, fares were increased by 1% below inflation in order to achieve this. Above inflation increases of up to 9% turn this logic on its head, penalising those without cars.

Doing away with above inflation fares rises would cost little, if anything. First, lower fares attract more people on to the railways. This is best reflected in the low fares policy of Merseyrail where rises have been kept to inflation. There, passenger numbers have boomed, despite it being a deprived area with high unemployment. Satisfaction rates are a remarkable 95%.

Secondly, part of the extra income goes to the train operators. For each fare rise, there is a complicated negotiation with the train operators who are not supposed to profit from the rises but inevitably end up getting some of the extra money.

Continuous rail fare rises have had negative knock on effects to other areas of the public transport system. In London, the mayor has followed national policy, imposing similarly calculated rises on the Underground network, forcing up prices. A central zone cash fare is a ridiculous £4.50. Even with Oyster it is £2.10 – far more than on European metro systems – adding up to a huge chunk out of peoples’ monthly pay checks. Moreover, while Oyster can be used for suburban train services, the fares on National Rail trips are even higher. This is ridiculous and needs sorting out so that the zonal system applies across the board. At present, those relying on National Rail services (mostly the millions of Londoners who live south of the river) are penalised by this disintegrated system.

Labour must be bold on rail. It is right that Maria Eagle has put affordability at the top of the Party’s transport agenda and announcing a definitive end to above inflation rises is the next step. Such a move would be popular, cheap and help encourage train travel. The Party should grasp this policy with both hands.

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  • JC

    What’s wrong with users paying for what they consume? If it’s too expensive, perhaps it’s the wrong solution to the problem. It might even be possible that we’re trying to solve the wrong problem.

    I would add a personal interest here. I live 5 miles from my nearest station and I couldn’t get to work or anywhere else I wanted to go from there anyway. I am also low paid but still paying income tax and NI and am not delighted about the idea that I should subsidise those considerably better off than myself. It may seem selfish, but then so is the suggestion that someone else should always pay!

  • thewash

    I think the country – and me – would be grateful for signs of any policies.

  • Daniel Speight

    Labour must be bold on rail.

    Yes Christian, but your article isn’t bold at all is it?

    • Lewis Coyne

      It’s both tragic and a farce that pledging to end above inflation fare rises is now seen as a ‘bold policy’ for the Labour party – something Mr. Wolmar recognises in this more honest (and much better) article:

      As I’ve said on here before, renationalisation is clearly the best solution, if only the PLP had the guts to advocate public ownership. That they probably do not, even in the near-universally popular area of the railways, speaks volumes.

      • Daniel Speight

        Lewis thank you for the link. Christian that is a far better article than the one above.

        • Lewis Coyne

          No probs.

  • thewash

    It seems no matter how often I try to get a message on any thread here it is ignored. it would appear that anything that is even slightly critical of the Labour Party is not included but disregarded.

    I am a member of the Party I am listed here to receive emails from this Blog but not it seems alllowed to leave any messages.


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