Memorandum submitted by Passenger Focus[4]
INTRODUCTION
1. RPC welcomes the Transport Committee's
investigation into these areas of ticketing and fares as it shares
these concerns and has been addressing them for some time. The
Committee's activity in these areas is particularly timely from
RPC's point of view as the Council is starting to scope a programme
of research to inform its views on fares policy in advance of
the comprehensive fares review next year. Passenger attitudinal
research will look into passengers' preferences on, for example,
advance-purchase tickets and their perceptions of fares in general.
RPC will be pleased to consider suggestions for specific research
questions from the Transport Committee. The Council's assumption
of responsibility for the National Passenger Survey from SRA provides
a further information source to inform the RPC's views.
2. RPC believes that many rail fares are
too high; that the fare structure is too complex and confusing;
and that the rail industry needs to exploit fares incentives to
attract passengers to travel at times when there is greater capacity.
COMPLEXITY AND
RESTRUCTURING OF
FARES
3. The current fares structure is a mix
of demand-curbing, market pricing and historic pence-per-mile.
Some fares are regulated (eg most Savers; season tickets; Cheap
Day Returns) while others are unregulated (eg Standard Open; Apex).
Given its complexity, one temptation is to scrap the current fares
structure entirely, though the industry could probably not withstand
the disruption resulting from such a move. RPC in its response
to SRA's 2002 Future Fares Policy proposed a less disruptive move:
reduce the number of fare types and rationalise them into an immediately
recognisable and understandable family hierarchy, with common
nomenclature, validity and conditions, across all train operators.
Book-ahead fares currently sport a wide range of names, eg Apex,
SuperAdvance, 3-day Advance, Value Advance, 7-day Advance, Flexi
Return, Senior, 2-Some or 4-Sight. Most are exclusive to specific
operators; the names and conditions are often unintelligible to
passengers. So complex is the fare structure that the current
National Fares Manual (No 91) valid from September 2005, lists
over 70 fare types, governed by 760 validity conditions, on 102
A4-sized pages. RPC has issued leaflets advising passengers the
questions to ask to ensure that they get the best deal when buying
rail tickets.
4. A range of Railcards, offering discounts
as now, should also continue. As a result of the research which
it commissioned towards its response to SRA's consultation, RPC
recommended the introduction of a National Railcard, available
to all members of the public. (See para 24.)
5. Train operators argue that the current
positioning of the regulated Saver fare denies them the opportunity
of offering a wider range of scaled book-ahead fares. RPC understands
the attractiveness of book-ahead Apex-type fares both to the industry
and to those price-conscious passengers whose journey times are
flexible. However, not all passengers are able to pre-plan journeys.
It is thus vital not to lose sight of the need to retain an affordable
turn-up-and-go fare (eg Saver—and even SuperSaver), avoiding
the need to pay the full fare outside peak times.
6. The opportunity should be taken also
to end the now unnecessary policy conflict between ticket validity
in the London/South East area (where tickets are typically valid
for one day only—with the limited exception of a few return
types) compared with the rest of country, where return tickets
are valid for a month. Combatting fraud was the original for this
reduction in validity but modern automatic ticket barriers and
gates at stations have significantly reduced fraudulent travel
by collecting previously unpaid income. It is indefensible not
to extend the same validity benefits to passengers in the south-east.
Enhanced on-train revenue protection would reduce fraud even further.
BOOK-AHEAD
VERSUS TURN-UP-AND-GO
TICKETS
7. The Council recognises the good value
which Apex-style fares represent to those passengers who can book
in advance but is deeply concerned that book-ahead tickets should
not threaten affordable turn-up-and-go fares. However, passengers
have often been thwarted in their attempts to buy these cut-price
tickets due to the late release of train timings, which operators
lay at Network Rail's door. This is all the more unacceptable
as train operators' fares policies increasingly direct passengers
towards such fares and the validity of the more flexible turn-up-and-go
Saver tickets is squeezed into narrower time bands. Late release
of book-ahead tickets effectively denies many passengers the opportunity
of travelling by train.
8. Concerned at the frequent non-observance
of T-12 by train companies, RPC has consistently surveyed the
dates on which bookings for quota-controlled tickets open for
the last 12 months. In recent weeks, since this latest round of
the survey, RPC has taken the matter up direct with ORR. The two
organisations will in future work in partnership, drawing on ticket
release data from the Association of Train Operating Companies,
as RPC investigates availability for journeys at Christmas.
9. RPC continues to seek greater clarity
in the size of the quotas available for each type of ticket and
the services upon which they are valid. Certainly this information
should be shared within the industry. RPC cannot have a properly
informed view without this vital additional information. Likewise,
enquiring passengers should be able to find out whether allocations
are still available on specific trains to enable them to plan
their options in a more informed way. One school of thought contends
that airline-style booking practice is incompatible with a traditional
turn-up-and-go mode, such as the railway. It is indefensible for
a train operator to employ airline-style booking policies and
then fail to keep its side of the bargain by failing to provide
allocations within the advertised timescales.
10. For many long-distance leisure passengers,
"the fare" and the price of the (regulated) Saver are
synonymous. Recent years, however, have seen a constant constriction
of the times when Savers are valid for many journeys on weekdays.
A further refinement is the imposition of restrictions on the
return leg of the journey with the result that the value of a
Saver fare for a leisure journey travelling out and back the same
day is severely undermined. For example:
— Preston to London: in 1995
not only Savers (first train to London 8.20; return any time)
but also SuperSavers (first southbound train 9.20; return any
time) were available. In 2000 both fare types and the first outward
train times still applied, but the SuperSaver was further barred
on three late-afternoon southbound trains; both tickets also had
restrictions imposed on early-morning and mid-afternoon to early-evening
return departures from London. By 2005 the SuperSaver fare had
been withdrawn; the earliest Saver departure southbound is 8.46,
with northbound restricted to after 9.15 and not between 15.15
and 18.11; ie the earliest arrival in London is 11.25, with return
services at 9.45 and hourly to 15.45, then 18.45, 19.45 and 20.45.
As a result, a turn-up-and-go return to London,
on a weekday leaving after 9.00 and returning at 15.45, cost £36
in 1995; £52.70 in 2000; and £195 in 2005.
— Edinburgh to London: in 1995
no restrictions in either direction applied to the Saver; the
full return fare served only as a basis on which to calculate
other reduced fares. The SuperSaver was valid on the 8.00 southbound
and all later trains; no restrictions on the return. By 2000 no
restrictions in either direction still applied to Savers. Southbound
SuperSaver restrictions had been lifted but new northbound restrictions
were applied between 15.30 and 19.00. By 2005, the first two morning
trains from Edinburgh were barred to Savers, as were return journeys
before 9.29 or between 14.59 and 18.59; thus the last Saver train
to Edinburgh now departs at 14.00 Monday-Thursday, 19.00 on Friday.
SuperSavers had been withdrawn.
As a result, a turn-up-and-go return to London
leaving on a weekday before 7.00 returning around 16.00 in 1995
cost £59; in 2000, £71; in 2005, £194.
[Note: SuperSavers not valid on Fridays or "peak"
Saturdays: eg Easter, summer months. Both Savers and SuperSavers
are available for break of journey without formality on the return
leg.]
11. Many passengers may need to pay much
more for the flexibility once taken for granted, or are obliged
to conform to the "strings-attached" nature of the Apex—(or
perhaps they no longer travel) simply by the repositioning of
time restrictions or the withdrawal of a non-regulated fare type.
The extent to which unregulated fares have risen is perhaps most
starkly illustrated when the Standard Open Return is viewed against
the cost of a weekly season ticket and the Saver fare (both regulated)
for the same journey. (Page 6 lists these and other sample fares.)
THE EFFECT
OF TIMETABLE
CHANGES AND
THE WITHDRAWAL
OF TICKET
TYPES ON
FARES
12. Usage of several ticket types is governed
by departure or arrival times. An apparently minor change to timetables,
without a corresponding amendment to the conditions of use of
some tickets, denies passengers the opportunity to travel by trains
previously available to them. While fares have not risen, passengers
can find themselves paying more.
13. The withdrawal of a ticket category
between two points can increase fares dramatically. We would cite
as a recent example Central Trains" withdrawal of longer-distance
Day Return fares. RPC ran a successful campaign to advise passengers
to buy tickets for two adjoining segments of the journey (Peterborough—Melton
Mowbray + Melton Mowbray—Birmingham) allowing passengers
thereby to undercut the through fare by 59% in the peak and by
32% off-peak.
14. The early demise of the non-regulated
SuperSaver had been predicted by the RPC's predecessor whose calls
for the fare to be safeguarded were met with counterclaims at
ministerial level that no commercially-minded operator would withdraw
such a popular fare. Most train companies have since replaced
this time-restricted, but still fairly flexible, turn-up-and-go
fare with an Apex-type; thus passengers who cannot book in advance
have seen either their options reduced or their fares increased.
15. Each train company is "lead operator"
and responsible for setting fares on a series of journey flows,
often into areas where it operates no trains at all. Its own fare
policy can thus affect the price paid by passengers over a much
wider area than its own sphere of operation. The decision of erstwhile
operator Anglia to withdraw SuperSavers on its flows also affected
long-distance through fares, eg Norwich—Southampton. Flow
sponsorship transfer from Virgin to Central Trains for a number
of journeys in the north-west affected passengers' fares as Virgin's
more relaxed attitude to Railcard use at peak times was not reflected
by the new operator. Some passengers" fares increased as
a result.
COMPARATIVE COSTS
OF RAIL
TRAVEL
16. SRA's policy change of 2004 required
passengers to bear a higher proportion of the costs of the new
railway. The regulated fares regime switched from RPI¸1%
to RPI+1%. According to SRA figures[5]
at the time this meant that passengers who bought season tickets
faced a rise of £45 per annum in real terms by January 2006.
These increases are in addition to an already high base in RPC's
view.
17. International comparisons routinely
show British mainstream fares as some of the highest, if not the
highest, in Europe. RMT's research earlier this year compared
commuter fares for journeys in Britain with those for major cities
on the continent: London-area annual Travelcards at £1,580
for a 15-mile radius compare unfavourably with Paris (£950:
20-mile radius), Berlin (£829: 40-mile radius) and Madrid
(£510: 40-mile radius).
18. Union Bank of Switzerland's survey suggested
that a standard-class ticket for a 120-mile journey in Britain
cost almost three times the world average for a comparable journey.
With Standard Open Return fares from London to Manchester at £187,
to York at £144 and to Cardiff at £110, it is no surprise
that ratings recorded by the National Passenger Survey show poor
satisfaction over value for money.
PASSENGERS' PERCEPTION
OF VALUE
FOR MONEY
19. Real-term average increases in ticket
price have been published by SRA until recently.[6]
Between January 1995 and 2005 the price of all ticket types has
risen by 6.3%. Particular ticket types' real-term price have risen
much more than this: standard-class unregulated fares have risen
by 10.9% nationally and by 18.2% in the long-distance sector.
First-class long-distance fares have risen by 41.5%. However,
overall figures belie the fact that certain (popular) routes have
seen their prices increase by more than average, eg London Manchester.
20. The National Passenger Survey[7]
indicates that nationally only 41% of passengers are satisfied
with the value for money for the price of their ticket. This low
figure is driven by the large passenger volume in London and the
South East where only 36% are satisfied. Regional passengers are
the most satisfied, at 58%. Just under half of long-distance passengers
are satisfied (49%). Stated preference research carried out in
May 2005[8]
invited rail passengers to prioritise the service aspects that
most need to be improved. The "value for money for the price
of your ticket" was rated as the second most important improvement
required from 30 possible service attributes; only punctuality/reliability
was rated as a bigger priority for improvement. This was the case
amongst all passenger groups (business, commuter and leisure)
who rated this as the second largest priority to improve.
GETTING COSTS
IN ORDER
21. Government investment in the railways
has increased from £1.8 billion in 1997-08 (Future of Rail
White Paper) to £3.8 billion in 2004. It is proper for the
state to invest in a public service which delivers government
objectives such as promoting social inclusion, economic regeneration
and reducing greenhouse-gas emissions. That funding, however,
is not limitless and the industry must find ways of keeping its
costs down.
22. By 2002-03 Network Rail's costs for
replacing a section of straight level track had risen some 25%
since 1999 according to the company's own analysis.[9]
Network Rail is driving down its cost base but clearly more must
be done. Neither passenger nor taxpayer must bear the cost of
industry inefficiency.
23. Train leasing charges in the "second-hand"
market are inexplicably high. SRA's 2003 Rolling Stock Strategy
recognised inter-ROSCO competition having driven down the price
of new stock but was less sure about the effect on existing rolling
stock charges. RPC shares this concern. While the Council has
no evidence of ROSCOs abusing their market position we highlight
the figures cited by the BBC[10]
and question the logic and fairness of, for instance,
— a 20-year-old two-car Pacer unit,
costing £350,000 to build, leased for £144,000 pa; and
— a two-car diesel Sprinter costing
£216,000 pa to lease.
24. Maximising revenue has to be a priority:
— Collect fares already due: give passengers
more and better opportunities to buy tickets and increase revenue
protection to ensure that they do so. The introduction of ticket
gates has seen revenue increase by up to 20% in places.
— Increase passenger numbers: the industry
has had great success in this regard, but further and unrelenting
effort is necessary. In the late 1990s Crime Concern and Transport
& Travel Research showed that off-peak journeys, where there
is spare capacity, could be boosted by up to 10% by the introduction
of safety and security measures at stations.
— Partnership funding: rail needs to
ensure that it taps into other sources of funding. The Comprehensive
Spending Review has outlined a link between transport and housing
budgets and established a new Community Infrastructure Fund of
£150 million for local infrastructure needs. The SRA's erstwhile
Rail Passenger Partnership fund was effective in bringing parties
together; RPC has long argued for the creation of a similar scheme
as a catalyst for partnership working.
— National Railcard: RPC undertook
research[11]
into the potential market for a National Railcard available to
anyone. The results forecast that a product, priced £30 for
50% reduction on off-peak fares, could encourage additional off-peak
travel and generate some £70 million incremental profit.
It could also:
— be an effective tool for smoothing
demand over different times of day and reduce crowding in the
peak;
— reduce fuel consumption, noise
pollution, road congestion and accidents;
— promote social inclusion as train
fares would be more affordable;
— substitute a series of competing
off-peak tickets, simplifying the current complexities of rail
travel discounts.
SRA expressed interest in developing such
a product and committed to explore options. We are disappointed
not to have had sight of developments in this area.
RPC'S NEXT
STEPS
25. RPC has identified Fares as one of its
priority work streams for its current operational plan. Starting
with a consolidation of existing research and known factors affecting
fares policy and passengers' attitudes, RPC will conduct a gap
analysis to identify areas which would benefit from further research
to ensure that RPC policy authoritatively represents the consumer
perspective. Further research will be scoped and commissioned
to be conducted in the New Year. RPC will happily take forward
issues raised in the course of the Committee's inquiry as part
of that research programme.
Fares Comparison 1995-2005
Source: National Fares manuals.
| Location/Mileage to London
| Fare to London | Jan 1995
| Jan 2000 | Jan 2005
| Change *
1995-2005
(for 2000-05)
| Change *
1995-2005
(for 2000-05)
| Cost
per mile
1995 | Cost
per mile
2005
|
| | £
| £ | £
| £ | % |
£ | £ |
| Norwich | | |
| | |
| | |
115
| Standard open return
| 55.00 | 61.00 | 64.00
| 9.00 | 16.36 | 0.48
| 0.56 |
| Saver | 27.00
| 30.20 | 35.00 | 8.00
| 29.63 | 0.23 | 0.30
|
| Super Advance | 21.00
| 23.00 | 20.00 | ¸1.00
| ¸4.76 | 0.18 | 0.17
|
| Weekly | 110.00
| 110.00 | 130.00 | 20.00
| 18.18 | 0.96 | 1.13
|
| Derby | | |
| | |
| | |
128
| Standard open return
| 59.00 | 68.00 | 94.00
| 35.00 | 59.32 | 0.46
| 0.73 |
| Saver | 36.00
| 41.00 | 44.00 | 8.00
| 22.22 | 0.28 | 0.34
|
| SuperSaver | 27.00
| 33.00 | withdrawn | n/a
| n/a | 0.21 | n/a
|
| Apex | 19.50
| 23.00 | 28.00 | 8.50
| 43.59 | 0.15 | 0.22
|
| Weekly | —
| 180.60 | 192.30 | 11.70
| 6.48 | n/a | 1.50
|
| Leicester | |
| | | |
| | |
99
| Standard open return
| 47.00 | 56.00 | 76.00
| 29.00 | 61.70 | 0.47
| 0.77 |
| Saver | 30.00
| 34.50 | 38.50 | 8.50
| 28.33 | 0.30 | 0.39
|
| SuperSaver | 22.00
| 29.00 | withdrawn | n/a
| n/a | 0.22 | n/a
|
| Apex | 16.50
| 20.00 | 25.00 | 8.50
| 51.52 | 0.17 | 0.25
|
| Weekly | —
| 155.00 | 167.00 | 12.00
| 7.74 | n/a | 1.69
|
| Peterborough | |
| | |
| | |
76
| Standard open return
| 38.00 | 44.00 | 54.00
| 16.00 | 42.11 | 0.50
| 0.71 |
| Saver | 24.00
| 27.00 | 31.00 | 7.00
| 29.17 | 0.32 | 0.41
|
| SuperSaver | 20.00
| withdrawn | withdrawn | n/a
| n/a | 0.26 | n/a
|
| Weekly | 97.40
| 109.40 | 122.50 | 25.12
| 5.77 | 1.28 | 1.61
|
| Edinburgh | |
| | | |
| | |
393
| Standard open return
| 126.00 | 172.00 | 194.00
| 68.00 | 53.97 | 0.32
| 0.49 |
| Saver | 69.00
| 79.00 | 90.60 | 21.60
| 31.30 | 0.18 | 0.23
|
| SuperSaver | 59.00
| 71.00 | withdrawn | n/a
| n/a | 0.15 | n/a
|
| Apex | 44.00
| 49.00 | 57.00 | 13.00
| 29.55 | 0.11 | 0.15
|
| Cardiff | | |
| | |
| | |
145
| Standard open return
| 70.00 | 87.00 | 110.00
| 40.00 | 57.14 | 0.48
| 0.76 |
| Saver | 40.00
| 45.60 | 50.80 | 10.80
| 27.00 | 0.28 | 0.35
|
| SuperSaver | 31.00
| 37.00 | 43.00 | 12.00
| 38.71 | 0.21 | 0.30
|
| Apex | 24.00
| 23.00 | 24.00 | —
| 0.00 | 0.17 | 0.17
|
| Weekly | —
| 182.4 | 205.3 | 22.9
| 12.55 | n/a | 1.42
|
| Plymouth | |
| | | |
| | |
226
| Standard open return
| 96.00 | 120.00 | 164.00
| 68.00 | 70.83 | 0.42
| 0.73 |
| Saver | 50.00
| 56.90 | 63.60 | 13.60
| 27.20 | 0.22 | 0.28
|
| SuperSaver | 39.00
| 45.00 | 52.00 | 13.00
| 33.33 | 0.17 | 0.23
|
| Apex | 28.00
| 27.50 | 30.50 | 2.50
| 8.93 | 0.12 | 0.13
|
| Weekly | —
| 277.80 | 311.00 | 33.20
| 11.95 | n/a | 1.38
|
| Birmingham | |
| | |
| | |
115
| Standard open return
| 52.60 | 80.00 | 100.00
| 47.40 | 90.11 | 0.46
| 0.87 |
| Saver | 37.10
| 29.70 | 34.90 | -2.20
| ¸5.93 | 0.32 | 0.30
|
| SuperSaver | 27.80
| withdrawn | withdrawn | n/a
| n/a | 0.24 | n/a
|
| Preston | | |
| | |
| | |
209
| Standard open return
| 96.00 | 155.00 | 195.00
| 99.00 | 103.13 | 0.46
| 0.93 |
| Saver | 47.00
| 52.70 | 58.00 | 11.00
| 23.40 | 0.22 | 0.28
|
| SuperSaver | 36.00
| 47.00 | withdrawn | n/a
| n/a | 0.17 | n/a
|
| Southampton | |
| | |
| | |
79
| Standard Day return
| 37.10 | 41.40 | 46.50
| 9.40 | 25.34 | 0.47
| 0.59 |
| Cheap Day return | 16.90
| 20.40 | 24.60 | 7.70
| 45.56 | 0.21 | 0.31
|
| Weekly | 76.60
| 82.40 | 90.20 | 13.60
| 17.75 | 0.97 | 1.14
|
* If 1995 data not available, comparisons have been made using 2000 and 2005 data)
| | | |
| | | |
|
| | |
| | | |
| |
4
Passenger Focus were formerly known as the Rail Passengers' Council
(RPC) Back
5
SRA Fares Review Conclusions 2003: Table 4. Back
6
National Rail Trends Yearbook 2004-2005, SRA, June 2005. Back
7
Commissioned by RPC and carried out by Continental Research in
Spring and Autumn. 25,000 self-completion questionnaires returned
each wave. Back
8
Passenger Expectations and Priorities for Improvement, commissioned
by SRA and carried out by Continental Research. It comprised short
interviews at stations on expectations of the journey followed
by self-completion of a questionnaire after the journey, sent
to Continental Research. In total 2,208 questionnaires were returned. Back
9
SRA Strategic Plan 2003 (figure 2), and repeated in the Future
of Rail White Paper. Back
10
File on Four: Rail Scandal (27.01.2004). Back
11
Future Fares Policy-RPC Response to SRA Consultation, October
2002. Back
| 
