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Westminster Hall

Thursday 26 April 2007

[Mr. Martyn Jones in the Chair]

Rail Fares

[Relevant documents: Sixth Report from the Transport Committee, Session 2005-06, HC 700, and the Government’s response thereto, HC 1640.]

Motion made, and Question proposed, That the sitting be now adjourned.—[Mr. Alan Campbell.]


Mrs. Gwyneth Dunwoody (Crewe and Nantwich) (Lab): It is always a delight to see you in the Chair, Mr. Jones, particularly when we are discussing a subject such as this, which is of such great concern to everyone.

It is extraordinary that the House of Commons sometimes seems to be remarkably ambivalent, even about its own programmes. For example, I think we all agree that in the interests of the environment it would be sensible if more people travelled by train, and that we should modernise the system, some of which is 120 years old. Yet when it comes to the means by which we encourage people to take the train—the prices that we charge for that service—we get ourselves into an interesting and esoteric argument, which is, frankly, not entirely supportable, about taxpayers already paying so much for the railway system that we must ensure that the fare box is responsible for the cost.

In theory, that is right, but the reality is that people will not travel by train in large numbers if fares consistently rise beyond the rate of inflation or the sum that they believe is acceptable, not least because at a certain point they begin to think that almost any other way of getting to work is cheaper than using the railway system.

The Transport Committee decided that it should investigate train fares. We wanted to know how fair the fare system is, and whether it is acceptable that the price of train travel per mile varies enormously in this country, depending on route and train operator, whereas in many similar countries, not just in Europe, estimates are made on a totally different basis.

The travelling public are not entirely convinced by the argument that cheaper rail fares are available. It is true that in theory computer whiz kids with a lot of time available who are prepared to spend it surfing the websites of various companies may be able to find a fare that is cheaper than those that British Rail charged—not cheaper than all its fares, but cheaper than some. However, there is clear evidence that, unlike other sections of the transport industry, the railways are not too anxious that their websites clearly and simply enable people not only to know where the cheap fares are, but how to book them. The railway companies assure me that they will do something energetic about that, and that the fact that they have not done so so far is not to be taken as an estimate of the way in which they regard their customers.

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Susan Kramer (Richmond Park) (LD): I thank the hon. Lady for the important things she is saying. Does she agree that simplicity sometimes becomes a cover for increasing fares? For example, in my constituency, South West Trains has changed to a zonal system. For someone travelling to central London from Kingston, virtually every fare went up 35 per cent. in 2007, and fares to most other stations have gone up similarly, on the grounds that the new system provides simplicity.

Mrs. Dunwoody: If the hon. Lady catches your eye, Mr. Jones, I am sure that she will be able to make those points.

The reality is that as a nation we have begun, over more than 10 years, to recreate and stabilise the railway system. A great deal of money has been poured into it, and we now have modernised lines. The west coast line is not only efficient, but comfortable and speedy. However, the difference in fares that passengers are required to pay is considerable. The last time I bought a first-class British Rail ticket from London to Crewe it cost £88 return; it is now nearly £287. I realise that there has been an increase in prices since then, but even I think that such a price rise constitutes a problem for passengers.

The trouble is that the travelling public are not convinced that there are now cheaper fares or that they are good value for money. The most recent data from the national passenger survey show that more than 43 per cent. of passengers overall and 55 per cent. of passengers on long-distance routes are satisfied with those fares, but only 38 per cent. of passengers in London and the south-east are. Those figures have not changed since the original two-year assessment, and in 2005 there was hardly any change.

Those poor levels of passenger satisfaction are important because passengers will begin to avoid rail travel if they believe it is poor value. The Government’s response was that passenger satisfaction with rail travel’s value for money has been consistently lower than all other indicators. They argue that although they find that disappointing it

If passengers’ perception of rail travel’s value for money does not drive fares policy, perhaps someone would like to tell me what should.

The Committee took evidence and made it clear that rail travel is becoming significantly more expensive than coach or car travel, and in many instances even than cheap air flights. Given that many passengers are unable to buy the cheapest fares, either because only a handful are available or because they are unable to plan their trips sufficiently far ahead, is it not slightly disingenuous of Her Majesty’s Government to quote the cheapest fares in their response to our report? Are not the cheap, advance purchase fares effectively a decoy to distract attention from the fares that most people actually pay?

If someone wants to buy a cheap flight, they can obtain the information easily and rapidly, and book the ticket online. If they want to buy a cheap train ticket, they will find that, first, the web pages are not easy to navigate, secondly, very few enable people to book easily, and thirdly, there are very few cheap tickets. That is a pretty bad deal.

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The Committee talked about the number of unregulated fares, because we believe that the reason why so many passengers are dissatisfied is that they do not believe the increase in unregulated fares to be just. It is greater than they believe is acceptable. Virgin’s west coast and Midland Mainline’s fares went up by 6.6 per cent. and 5.9 per cent. respectively, although the average increase in unregulated fares on 1 January 2007 was 4.7 per cent. Average price increases are masking significant variations between different types of ticket. The price of some fares, particularly open fares, has increased significantly more than others. Year on year, new year’s day brings an above-inflation rise in most rail fares. We do not believe that that trend should be allowed to continue, and if it does would someone please tell me where it will end?

The Committee concluded that open, flexible and walk-on fares are crucial because many travellers need flexibility in their travel arrangements, as Members of Parliament know only too well. Anyone seeking to book group fares for a visit from the House of Commons is frequently confronted with that problem. Members do not arrive together, do not leave together and go to different places at the same time.

We said that it was important to look at the train operators’ attitude. Some seem to think that they can try it on to see how much they can get away with. That does not apply to all of them, but some make little effort to ensure that people receive value for money. The coverage that operators receive when, for example, the London to Manchester open fare passes the £200 mark, is indicative of public indignation about the prices that are charged for walk-on rail fares. The Committee said that the Government ought to cap those fares, but in response, we were told that they did not believe the fares to be disproportionately expensive. I must ask the Minister whether there is any price rise in open rail fares that would lead the Government to consider capping them, because it would be helpful to know.

The saver fare traditionally offered a good, value-for-money walk-on option for anyone who could travel outside popular hours. Saver fares are regulated, but train operators are gradually eroding their value by tightening terms and conditions and limiting the time when the tickets can be used. The Government hinted that they might change the regulatory regime for saver fares or even abolish regulation, but we need a guarantee from the Minister that he has no such intention. If the Government follow that path, would they like to put in place measures to prevent any further erosion of saver fares?

In the Minister’s view, have train operating companies made adequate improvements in the transparency of information about the availability and quotas of advance purchase fares? Passengers have the right to such information before they purchase, and they have the right to be supported by adequate information systems.

Mr. David Drew (Stroud) (Lab/Co-op): I have looked again at chapter 5 of the Committee’s excellent report, and my hon. Friend may be able to help me with the definition of peak travel. I am genuinely confused,
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given that First Great Western Trains’ current definition of peak travel is different from the definition it used before it acquired its most recent franchise. I am often asked when peak times are, whether they correspond to when one leaves or when one arrives, and in particular, whether certain train times fall inside or slightly outside peak time. It makes a great deal of difference, especially when people want to use a saver fare but suddenly find that they must travel during peak time.

Mrs. Dunwoody: I sympathise with my hon. Friend, because some train guards—I insist on calling them train guards even though they are now called train managers—begin every journey with a list of qualifications: “If you have this ticket, you’re on the wrong train; if you have that ticket, you’re on the wrong train; if you have this ticket, you’re probably going to have to pay five times when I come round.” Although I very much sympathise with the staff who have to go through that liturgy, it demonstrates that train companies do not tell people the location of the cheap tickets or the times to which they apply, and that they print information in many different ways that are not easily accessible. It is very easy to be misled, which is a real problem.

The Committee was concerned that as more and more commuters travel further as house prices rise in city centres, they are forced out of the conurbations. We said that if train fares were to rise exponentially, it would have a direct effect on the availability of workers, not least because if the upward trend of house prices in large cities continues, large numbers of people will begin to say that they can no longer accept employment in which train fares represent a large percentage of their overheads.

We ought to be told about capacity and fares. The Committee was told that the Government accepted that there were capacity problems, but that they thought that they were mainly on commuter lines where fares were regulated. We said that train operators on unregulated lines were using above-inflation price rises to price their way out of capacity problems.

I do not know of any other industry that, faced with a highly successful product, in effect tries to price its customers out of the business. However, it could be rather fun: large numbers of the members of the Association of Train Operating Companies could stand at the entrances to main stations, refusing entrance to anyone who did not look as if they were capable of paying the train fare. Just as bizarre, however, is that the train companies feel that the way to deal with their capacity is not to plan ahead and talk to the Government about changes to rail gauge or the provision of extra rolling stock, but to say, “Well, goodness me, there are so many of these people, we will have to charge them a great deal of money, because with any luck, they will go away.” One train operator increased its unregulated fares by twice the rate of inflation. What effect will that have on overcrowding on the line?

Susan Kramer: Is the hon. Lady aware that having priced people out of peak hours with high fares, about which I have a good example in South West Trains, locally, there are now special charges for the shoulders
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to peak hours, extending them almost to midday? At every opportunity, the pattern is an increase in price rather than capacity.

Mrs. Dunwoody: At a certain point, commuters will become so irritated by the provision of insufficient accommodation—travelling on crowded trains, in unacceptable discomfort—and by having to pay enormous amounts of money that we will see the equivalent of the national fares strike that is suggested every time fares increase.

The Government must take action to ensure that there is a simple framework of three ticket types. The situation really is unacceptable. Under British Rail, people had a clear idea about the type and class of ticket that was available; under the current regime, they have no idea. The so-called flexibility increases neither capacity, comfort nor even utility. All it does is increase the amount of money that is paid to various large banks, which do not seem to be doing too badly anyway.

We asked the Government to look closely at regulatory complexity and weakness. The rail fares system is complex, and complaints about unregulated fares are difficult to deal with when the Office of the Rail Regulator and the Office of Fair Trading share powers to make judgments and enforce decisions. The framework does not work, and it is time that somebody analysed the system, simplified and improved it and made it possible for people to complain easily and effectively. The Government should be prepared to look again at the system’s structure, but we have not received any explanation or indication that they believe that the complexity of the system makes complaining difficult for passengers.

Although the Government did not accept our recommendations, they must know that the Committee feels that it is an important subject. It is clear that more and more people are using the railways, and that is in everyone’s interest as long as they arrive safely, comfortably and for a reasonable fare. It is exactly the way in which people ought to be encouraged to travel throughout the United Kingdom. A burgeoning economy, which ours has been over the past 10 years, inevitably means that more people want to travel, and it certainly means that more people will want to go by rail. The need for extra capacity therefore ought to be of comfort to the Government, and they ought to be able to say plainly and as a matter of policy, “We are looking at the relationship between the cost of rail fares and the environmental and commercial benefits of carrying people easily.”

I can provide the Chamber with a simple example. I shall be travelling to west Wales to support in the Assembly elections a candidate who is also called Dunwoody. After a great deal of work, and with the assistance of some very talented people in the House, it has become clear that travelling from Crewe to west Wales is cheaper by chauffeur-driven car than by public transport. I do not think that I am alone in thinking that that is probably not a very sensible way of behaving.

Although I fully understand the difficulties that the railway systems face, the Government will have to take some tough policy decisions and look clearly at what we pay for our railway journeys. They are going to have
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to grasp the nettle. It is really no longer acceptable for them to say to the House of Commons, “Well, the money comes either from the fare box or from the taxpayer, and we therefore can’t do anything about it—the fare box is going to be allowed to rise.” The reality, however, is that the whole system is supported by the taxpayer. It does not matter which way we look at the issue, taxpayers pay because they need a good railway system that can carry large numbers of people who could not be carried efficiently and safely in any other way. Taxpayers pay because they understand the relationship between railways and the economy, if nothing else.

At some point, the Government will have to come clean and say, “This is an extraordinarily difficult situation”. However, we cannot continue with the outlook that says that more and more train operating companies will be operating on the basis of management contracts, for which they are handsomely paid, while taking no responsibility for the track, the rolling stock, the stations or anything else, and the individual passenger is going to be told, “You must pay an economic price”. By all means, let us have an economic railway, if that is what the people of Britain want, but let us ensure that the cost is equally divided.

2.51 pm

Mr. Lee Scott (Ilford, North) (Con): I shall keep my remarks fairly short and not repeat anything that the Chairman of the Committee has said.

If we want to encourage people to travel by rail rather than by car, we cannot expect them to need a BA honours degree to know what fare they are booking at any given time. During the Committee’s questioning, we were told that the system had been simplified throughout the country and that anyone could, without question, phone up and be given the cheapest price straight away. So I decided to try that out. In three separate phone calls, I was quoted three separate prices for the same journey, none of which was the cheapest price advertised on the website. If the journey had been booked over the web, the price would indeed have been cheaper. What that journey was is irrelevant, but such incidents lead one to believe that passengers are not being given the best deal possible.

If we are to get people out of cars and on to public transport, we cannot expect them to travel in conditions in which it would be illegal to transport animals, nor can we expect them to pay an exorbitant amount of money for the privilege of doing so. The only way is to provide a clean system, on which people wish to travel. Then they will leave their cars and start to travel by public transport. I am an ideal example of that. Before entering the House, I used to travel up to Yorkshire quite frequently. I preferred to go by train, which was far better than sitting in a car for hours on the A1, stuck in jams. However, when it gets to the stage where one has to stand for the entire journey back down, one ends up deciding that it would indeed be better to travel by car. Instead of people being encouraged, they are being discouraged.

Passenger satisfaction for mainline travel through or near my constituency is quite low. I am sure that the Minister will tell me later that official statistics show the opposite, but I assure him that my mailbag does
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not. People complain not only about the length and price of their journeys, but about the conditions in which they travel, particularly in rush hour. Members of my staff who travel in from Essex continually experience tremendous problems, and have to phone in to say that they will be late because the train is delayed. That happens to journeys to this place, so I am sure that it happens to many thousands of people travelling into London on a daily basis.

To conclude these brief remarks, I reiterate that, as set out in our report, customers want a quality system, with a simplified pricing structure that they can understand and conditions that make them want to travel by train. If that is achieved, not only will numbers increase, but we shall see an end to the situation that we heard about from the Chairman of the Committee, on which I am honoured to serve, whereby people are discouraged—it is slightly unusual that any business would want to discourage people—by the prices that they are being charged.

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