Examination of Witnesses (Questions 300-319)
DEREK TWIGG
MP AND MR
MARK SMITH
30 NOVEMBER 2005
Q300 Chairman: Of course there is.
There is competition to buy a monopoly and I think that is quite
understandable. What Mr Scott was asking you was something slightly
different. Is it your intention to look at ways of introducing
a degree of competition in those areas where there is one dominant
train company?
Derek Twigg: We have no plans
to move away from the current franchising system. Clearly there
are issues in terms of the number of trains you can run on a particular
route. There is an application in on the east coast and the ORR
has got to make a decision on that.
Q301 Chairman: But you have not done
so. Do you think it is a good idea to have 70 different fare types
and 760 validity conditions?
Derek Twigg: I think it is a good
idea to give people different options on fares.
Q302 Chairman: You think 102 pages
of explanation makes it simpler for people.
Derek Twigg: In what respect?
Q303 Chairman: In that if I want
to find a particular fare I am now faced in some areas with pages
and pages of not only different fare types all governed by different
conditions but I also have over 100 pages of explanation.
Derek Twigg: Clearly we would
like to see a system which was easier for people to get round
in terms of finding fare types. I rang National Rail Enquiries
before I came to this Committee to ask them what would be the
cheapest fare I could get off-peak from Runcorn to London and
I found it was very easy. I waited about a minute. I got the information
within a matter of 30 to 50 seconds. I then asked for further
information about the alternative fares. I had all the information
I wanted within a matter of minutes.
Q304 Chairman: You did not move on
to try and buy a ticket that same way.
Derek Twigg: You made a point
about information. We have a system here which I accept there
is a complexity about, but there is an attractiveness about it
in terms of people being able to get a range of fares at very
low levels which I think is playing a significant part in attracting
more people to use the railways, particularly during the off-peak
times as well.
Q305 Chairman: Why is it simpler
in some instances and cheaper to buy two separate tickets to do
one journey?
Derek Twigg: It is not a perfect
system. Clearly if the passenger finds an anomoly, they can take
advantage of it.
Q306 Chairman: Is the Department
going to introduce an integrated system of smart ticketing?
Derek Twigg: For the whole country?
Q307 Chairman: Yes.
Derek Twigg: It is obviously doing
work in London at the moment on smart cards. Clearly there are
cost implications and a business case that need to be considered.
Q308 Chairman: And you are in the
process of producing that, are you?
Derek Twigg: Currently I am in
discussions on London.
Q309 Chairman: And you are considering,
for example, interoperability between smart card systems for National
Rail.
Derek Twigg: It is something that
clearly will need a lot of work doing on it. The interoperability
of it is very important in terms of taking any scheme forward.
Q310 Clive Efford: I want to ask
about simplifying the Ticketing and Settlement Agreement. The
train operating companies want more freedom to set fares at a
competitive level. What do you think the impacts on the travelling
public will be if they had that freedom?
Derek Twigg: Again, it is in the
interests of the train operators to attract more people onto their
trains. They are a business and clearly they want to increase
their profits as well and increase the money they take and their
yield. There may be opportunities in terms of the Saver, which
we have not made a decision on in terms of deregulating, for train
companies to be much more innovative and offer better deals for
the travelling passenger. Clearly there is a balance to be struck
around how much we regulate and how much we give freedom to train
operators to charge particular prices for particular tickets.
Q311 Clive Efford: So the Department
is sympathetic to providing freedom for train operating companies.
Derek Twigg: We are looking at
the Saver fares. Clearly we want to examine whether there could
be more benefits for the passenger and clearly there will be opportunities
for the train operating companies to provide better deals for
the passenger. It is in their interests to sell more tickets and
to attract more people onto the railways.
Q312 Clive Efford: Would it simplify
the system? We have heard that there are 70 different fare levels.
Derek Twigg: Train operating companies
have gone in in a much bigger way for advance purchase tickets.
I understand the point you are making in terms of the complexity.
There are many benefits to the passenger in terms of the deals
that are available to them.
Q313 Clive Efford: Under the current
system of regulation, an evaluation of market conditions in a
particular region determines whether commuter fares are regulated.
What is so different in Leeds and Manchester, which are regulated
markets, as compared with Birmingham, which is a non-regulated
commuter market?
Derek Twigg: With regard to London,
you have to make decisions based on whether there is more of a
monopoly situation in terms of there not being other forms of
transport that passengers can use and that helps you determine
that decision. In terms of the regulations, I think it is 45%
or 46% of the fares are regulated in that way.
Q314 Clive Efford: Have you done
any analysis of whether there is a significant difference between
regulated fares and non-regulated fares?
Derek Twigg: In what respect?
Q315 Clive Efford: In respect of
the areas where regulation applies. London is heavily regulated.
Derek Twigg: It is regulated because
of the monopoly situation. There is quite a high ridership on
trains in London whereas it is much lower out in many regions.
Q316 Clive Efford: Are there significant
differences in the fares as a result of regulation? What is the
impact of that?
Derek Twigg: I am not clear of
your question.
Q317 Clive Efford: Are commuter fares
significantly different in areas that are regulated compared with
those that are not regulated?
Derek Twigg: I cannot give you
the answer to that.
Mr Smith: The reason Birmingham
is not regulated is that the fares are set directly by the Passenger
Transport Executive and it is a public body. It is not that Birmingham
is unregulated; it is that they do not need to be regulated.
Q318 Clive Efford: In those areas
where fares are not regulated, are they significantly different
from those areas that are regulated?
Mr Smith: Most of the key urban
areas are regulated or, as in the case of Birmingham and Strathclyde,
are set directly by the PTE. Once you start getting outside those
areas they start becoming less of a commuter area.
Q319 Clive Efford: Minister, why
do franchise agreements not stipulate basic requirements with
regard to names of ticket types and restrictions on different
types of tickets?
Derek Twigg: Why do they not do
it?
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