Rail fares may soar by 30%

A government review into train ticket prices could see some off-peak fares soar by 30% in order to subsidise price cuts to peak tickets...

It was never going to be an easy task for Sir Roy McNulty.

“Sort out our expensive, unreliable, cramped and badly run trains” hollered the previous government, adding; “but remember, we don’t have any money; so you can’t spend any!”

Well, that was 18 months ago, and not a lot has changed since. Apart from of course rail travel is now even more expensive and the country has even less money than it did back then.

So what solutions has Sir Roy come up with?

Fare cliff edge

One of the key problems identified in the new government-backed report is the ‘fare cliff edge’ that arises at particularly busy times of the day. This is due to the drastically different levels of fares charged at peak and off-peak periods that can see ticket prices hugely inflated for services deemed to be operating at peak times. As a result, rail operators often find that these pricey services are left virtually empty, while off-peak services are jam packed.

To combat this problem the report suggests simplifying the fare system to make it more equitable. This would involve reducing fares for rail travel at peak times while increasing prices for cheap, off-peak services. This idea has been met with a wave of criticism from passenger groups and unions who have warned that, if implemented, the changes could push up cheap fares by up to 30%.

However the government have strongly defended the report, stating that the overall savings contained within the review will bring fares down in the future.

Efficiency drive

The chief conclusion reached by Sir Roy McNulty in his report is that the cost of running Britain’s rail network should be 30% lower than it currently is. This would bring the industry’s costs in line with other European railways.

And how does the ex-Civil Aviation Authority Chairman propose to do this?

Through efficiency improvements. Big efficiency improvements. Efficiency improvements that could deliver savings of between £700 million and £1 billion annually by 2019.

And we all know what ‘efficiency improvements’ is government code for. If trade union general secretaries weren’t sweating when this report was commissioned, they certainly will be now.

The review identified staffing on trains as a serious barrier to efficiency, stating that rail wages had risen twice as high as those for other industries and led to ‘inefficient working practices’. To combat this Sir Roy advised cuts to both on-train staffing and redundant ticket offices in smaller stations.

However this suggestion was met with staunch criticism from Bob Crow, general secretary of the RMT union, who blamed privatisation for the high rail operating costs.

Fragmentation

As well as criticising the complexity of fare systems, the report also highlighted the high level of fragmentation currently present within the rail industry. Fares and timetables are managed by civil servants, services are run by private companies yet the tracks are maintained by the government-created Network Rail.

Sir Roy aims to reform this through ‘devolution and decentralisation’ within Network Rail, as well as creating a ‘rail delivery group’ to lead the changes and take over some of Network Rail’s duties.

The report also suggests easing obligations on Network Rail even further by handing over responsibility to the train companies for their section of the track.

Will it work?

The lunacy present within the current rail industry in this country is obvious on almost every level, from practical to legislative. I recall booking a ticket back from Liverpool last year only to find that the first class fare on the Virgin train was cheaper than the standard fare. I enjoyed the first-class desk lamp and free cup of tea, yet surely an apparent anomaly like this is symptomatic of an industry in disarray.

A look at the legislative make-up of this country’s rail sector reveals a problem prevalent throughout many of the New Labour ‘privatisation’ policies that were initiated by the Tories and then left in the lap of Blair. That is that they are so over-complicated and fragmented that any efficiency improvements that could have been squeezed out by the introduction of private companies are quashed by middle-management and admin.

The simplification of fare structures and franchising along with the efficiency savings proposed by Sir Roy may not be a very exciting solution to our railway dilemma, but they are wholly necessary.

Yet these changes will not be pushed through without a mass of dissent from the unions who continue to claim that it was privatisation that wrecked the railways in the first place, and thus further privatisation will simply wreck it further.

But you cannot solely blame the market for the problems faced by the railway sector, as the influence of private companies is so swamped by the state, they’re almost completely marginalised.  A state-run and publicly funded company dishing out abnormally cheap contracts to a set of private firms, most of whom are making a loss on their franchise; doesn’t exactly sound like the most capitalist of set-ups, does it?

There will always be those who stubbornly call for the re-nationalisation of the entire rail network, but that is to ignore the (limited) successes achieved by the (limited) privatisation that has taken place. Trains are now undoubtedly faster and more frequent; yet still not fast or frequent enough.

Sir Roy McNulty’s report contains a set of practical, pragmatic and sensible solutions. Yes, they’re not as flashy or revolutionary as the rail reforms of yesteryear, but that could just be the reason why these ones will actually work.

What do you think?

Do you agree with the McNulty report? Should peak and off-peak fare prices be levelled?

Let us know using the comment box below.

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