Posted 11th January 2012 | 5 Comments

Fares row ignites after Miliband criticises increases

TRAIN OPERATORS have defended the 5.9 per cent rise in average rail fares at the start of this month, after Labour leader Ed Miliband said he would 'take on' train companies and insist that caps on rises were equally applied to all fares, under a future Labour government.

Regulated fares rose by an average of 6 per cent, although operators were allowed to use the 'flex', which had been suspended in 2010 by former transport secretary Andrew Adonis. The flex arrangement means that some fares can be increased by up to another 5 per cent, so long as others are restrained to yield no more than the capped increase, on average, across a 'basket' of fares for each operator.

The rise could have been higher. Originally, the government had said that this month's increase of regulated fares should be based on RPI + 3 per cent, but this was reduced to RPI + 1 per cent by the Chancellor in his Autumn Spending Statement, in which he provided a special cash injection of £290 million to keep the rises down.

As things stand fares are still set to rise by RPI + 3 per cent in 2013 and 2014, before the next scheduled general election, but Mr Miliband promised that a Labour government would change the rules about fares.

He said: "Some are going up by as much as 11 per cent. Next year and the year after, some are going to go up by as much as 13 per cent.

"Some train companies have jacked up prices so much that some season tickets are now a fifth of the average salary in this country. And what are the Government doing about it? Nothing.

"They are afraid to take on the train companies. In fact they are making it worse. Just ask a commuter coming into London from Basildon or Basingstoke. The Government are giving the train companies more freedom to rig the system of fares, so that the busiest routes get the biggest fare increases. That’s got to change."

But the Association of Train Operating Companies responded by pointing out that a 'booming rail industry' was good news.

ATOC said: "The average rise in season tickets is set by the government under a policy introduced by Labour in 2004 to reduce taxpayer subsidy to the railways. Train companies are subject to rules that were created and rigorously implemented by successive Labour transport secretaries. Within this highly regulated system, operators can vary the price of individual season tickets but it is misleading for Ed Miliband to suggest that they can put all the highest rises on the busiest routes.

"For more than a decade, train companies and the Government have worked together successfully to attract record numbers of passengers to the railways. There is always more that can be done, but a booming rail industry is good news for the economy at a time when the country needs the private sector to boost growth."

Reader Comments:

Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.

  • Jack99, Oxford, UK

    Yes its true that Network rail still suffers from union restrictive practises ( remember the BR strikes concerning flexible rostering / deletion of secondman ( ex fireman) the 3rd Guard sitting in the back of the diesel loco on an airbraked goods train ) but this is a drop in the ocean compared to the hugely complex contracts and hence Contract Management staff that are employed to administer them in todays railway. The 91 Million GBP compensation that Network Rail has had to pay out to train operators would reinstate the Oxford to Witney railway in one fell swoop. True BR's standards were mixed - I commuted on the SER lines into Charing Cross in the 1980's and there were always cancelled trains due to lack of guards however the WR service from Didcot to London in the early 1990's was far superior than the cattletruck Worst Great Western service now offerred. BR ran the network up to 1994 on about 1 Billion subsidy per annum whereas now the figure is about 5 Billion.GBP Bearing in mind there only has been limited investment in new infrastructure and trains where has all the money gone ?? Fat cat Lawyers , TOC profits , excess administration costs, everywhere but the actual railway

  • John from Rye, Rye, UK

    "BR was dreadful. It's management, and the standards of service were abysmal. Throwing more money at BR would have only made matters worse" says Lutz. There are still quite a few former BR managers in today's industry - thank heavens as a lot of valuable experience was ditched in the early days. And "BR Management" actually managed get BR in the position of the most efficient and productive railway in Europe - whether you regard that as good or bad is up to you, but what is certain that a great deal of money that could have been invested in Britain's railways was wasted in the costs of a needlessly over complex method of privatisation which has since cost the industry dear. A number of jack99's points are valid - whether or not you feel that rose tinted spectacles are being used. Britain still has a good railway, which is as well given the current economic and environmental demands. But the cost of running it in private hands is needlessly higher than it should be, and the quality (in terms of capacity at the very least) is less than it would have been had the system been privatised in a simpler manner, or - dare I say - actually left in the hands of those that knew best how to make it work efficiently.

  • Lutz, London

    I full agree with James Pritchard:- many keep claiming that BR management could do better, but they are coming to this view through rose-tinted spectacles. BR was dreadful. It's management, and the standards of service were abysmal. Throwing more money at BR would have only made matters worse.
    Mr Milliband can politic while in opposition, but it will be a different matter if had to engage with reality.

  • James Pritchard, Southampton

    I wonder if jack99 has missed the fact that privatization has been with us for nearly two decades, in which time much has changed in society. If BR still existed today, it too would be subject to a myriad of health and safety, disability, planning and employment regulations which did not exist in the 1980s.

    I also wonder if he thinks that Bob Crow and the RMT were right to throw a tantrum and organise a Tube strike when they didn't get triple pay on Boxing Day. This might seem at first like an irrelevant point, but it is often the demands of the unions, and inefficient, archaic working practices which escalate the costs of running the railways. Some of Network Rail's inefficiencies, for example, are well documented and until the system is overhauled to eliminate that (which won't happen without a fight from Bob Crow and his cronies) someone has to pay - be that the tax payer or the passenger directly.

  • jack99, Oxford, UK

    The only good thing about John Major's byzantine absurdly complex rail privatisation was that the late Robert Adley MP managed to get season tickets capped at RPI -1 %
    Result ( despite Railtrack and dubious bus / rail operators ) = Booming traffic
    Alistair Darling ( another Anti - Rail Marples / Fraser type Transport Secretary changed this to RPI+1 % which the Hawk Hammond increased furthur to RPI+3% claiming the rail network is a rich mans toy ( Are MP's above ordinary people that need trains to get to work ? )
    If British Rail had got the funding that the privatised rail network has had unleashed on it since 1994 then the network would be twice as big as it is now and certainly more cost effective. Profits from train operations would be as the RMT always point out be reinvested in the rail network and not in shareholder or fat cat MD's pockets.
    BR could reopen a station for next to nothing whilst now its at least 2 Million Pounds a go - why does the East West rail link ( with the track in situ ) need 240 Million to get reopened ? ( and that does not include the missing Bedford Cambridge section ) The costs associated with privatised railways beggar belief and are a gravy train ( as ATOC are always willing to defend )
    Bob Crowe and the RMT are right - renationalise and you will get a far cheaper railway to run rather than the complex managerial labyrinthene maze that currently exists