Examination of Witnesses (Questions 380-399)
MR STEPHEN
JOSEPH, MR
ANTHONY SMITH,
MR RUFUS
BARNES AND
MR GORDON
EDWARDS
12 DECEMBER 2007
Q380 Mrs Ellman: Mr Smith, can I
ask you from Passenger Focus, do you think enough work is done
on looking at the needs of people who want simply to be able to
go to a station and buy a ticket on the day? Is there not a drive
to everything being through Smartcards and other technologies
to the exclusion of passengers—I do not know how many—who
want to be able to buy tickets and travel?
Mr Smith: I think it is a fact
that the move on the railways is very much towards pre-purchase
for all types of travel whether it is through Smartcard or through
booking ahead. As we have seen in the current fare rises the relentless
pressure on walk up and go fares continues and we are moving towards
a very different type of railway which, in some ways, on longer
distance travel, is becoming more of an EasyJet type booking system.
This is happening without any public debate and really at the
behest of the operators largely to suit their convenience.
Q381 Mrs Ellman: Passenger Focus
is there looking at the needs of passengers, have you done any
research on the views of passengers and particularly those who
do not want to have to go down this route?
Mr Smith: It is quite clear that
many passengers value the ability to be able to turn up at the
railway station and purchase a ticket on the day of travel either
because they want to be sufficiently flexible about their plans
or they want to talk to a member of staff which is very important.
I do not think the rail industry is ever going to be able to get
rid of ticket windows because people want to talk to staff. Some
of the products are complicated; they need to have a discussion
with a human being about them. People like the railway because
it has that turn up and go ability. I think it is one of the railway's
great attractions and selling points that you can do that, you
can turn up and go.
Q382 Mrs Ellman: Has Passenger Focus
made representations to the operators and to government to pursue
the views of those people?
Mr Smith: Yes, we have. We have
made strong representation both to government and to the operators
and to the Association of Train Operating Companies but I think
some of the realities of the pressure on space on the railways
is pushing the operators towards trying to get people to book
in advance. A lot of people are very comfortable doing that and
we should not decry it because you can travel very, very cheaply
if you book in advance. The great benefit of the railway is that
you can turn up to go. It is a social service, it is a public
service and it should be available when you want to use it within
reason.
Mr Joseph: We have recently been
focussing on the closure of travel centres at various railway
stations. South West Trains are leading the way on this and we
think other operators will follow it. We are concerned about this
for a number of reasons, firstly because, as Mr Smith said, some
of the railway products are complicated and people like to be
able to have the leisure to explore the options for them in relation
to travel which travel centres provide. Secondly, we are concerned—from
the aspect of one of the other things the Committee is interested
in—with penalty fares. If you have no travel centre and
relatively few staff at ticket offices people will simply be caught
by penalty fares regimes because they have not had time to actually
buy the ticket in advance. We have certainly raised these issues
with South West Trains; we have, as usual I am afraid, come across
a split between whether this is required by the franchise or a
decision made by the operator. Responsibility, as often with the
railway, seems to be divided or passed between the two.
Q383 Mr Scott: How effective do you
think Transport Direct is?
Mr Barnes: Transport Direct is
an organisation that is providing information rather than ticketing.
It is one of the organisations that fulfils this role, but it
is just one of those organisations, the National Rail Enquiry
Line is another. It is one organisation ...
Q384 Chairman: Is it effective?
Mr Barnes: I cannot really comment
on whether it is better or worse than any of the others?
Mr Joseph: In principle what Transport
Direct is trying to do is admirable and certainly some of the
new features that it has added to allow, for example, carbon calculations
of journeys and so on are admirable too. Nobody else is providing
car and public transport comparisons. The problem seems to be
when you get down to the very local level of journeys in that
it seems to fail to notice the opportunities for walking any distance
or for cycling and therefore does not include those as options
and some of the first and last legs of the journey are still very
odd. It is also reliant on the local public transport information,
for example the location of bus stops, provided by Traveline and
from that the local authorities. We have evidence from some of
our local groups that some of those basics are not very well done.
We have some concerns about the detail although we think in principle
the case for Transport Direct is very strong but needs to be developed.
Mr Edwards: The key barrier to
the use of public transport is the availability of information.
At the moment we have both Transport Direct which gives live travel
news but also provides a journey planning system which people
find quite difficult to use initially but once you get used to
it it is fine. Then we have all these regional travel line organisations
which do not have a standard format and do not cross regional
boundaries. Really we want to see the Government take some lead
in joined-up thinking to ensure that there is just one source
of accurate public transport information which is easily accessible.
Rail fares are available on the National Rail Enquiry site, they
are also available on the Transport Direct site, but on Transport
Direct you cannot get bus fares. On Traveline South West from
2 January you will be able to get the bus fares but no train fares.
All these bodies are publicly funded so can we please have some
joined-up thinking.
Mr Smith: I think Transport Direct
is a big step in the right direction. Information is key prior
to ticketing and I think what they are trying to do is interesting
because in a sense they are competing with the satellite navigation
technology you are seeing in use in cars increasingly, that sort
of pinpoint accuracy of journey information. Public transport
has to keep up so it is a step in the right direction, but clearly
there is more work to do.
Q385 Clive Efford: Has the ticket
fares on trains coming into line with the zones improved the understanding
of the prices and the link between the different modes of transport
in London?
Mr Barnes: I think when you start
from the position that prior to the introduction of zonalisation
you had vastly more fares options, anything that brings about
a simplification of that helps people's understanding of the fares
they are likely to have to pay for the journey they make. That
must be a good thing. Zonalisation is also a vital prerequisite
to the acceptance of Oyster on the national railways in the London
area—Oyster pay as you go—otherwise you would not
have been able to introduce Oyster pay as you go on the national
railways because the system could not cope with such a large number
of individual fares. Yes, it was a good thing; yes, it goes towards
simplification and it is a prerequisite before we see Oyster pay
as you go extended to the national railways.
Mr Smith: I agree with my colleague's
comments that overall it is a good thing but it has been painful
in its implementation because some of the fare rises which have
been implemented following the introduction of the zones have
been quite significant. Individual passengers I think got quite
a nasty shock in terms of what might happen. We saw I think rises
in the order of 30% which were relatively small monetary amounts
but still quite a big jump and what we have yet to see is what
the overall impact will be of turning London into a complete zoned
area on travel from outside of London. There are many forces at
play here, including the government regulation of certain types
of rail fare which apply to the whole of a train company's activities.
Now you get a sort of ring in London which sets certain things
happening in terms of price which we thing has a potential consequence
of reducing the train company's room for manoeuvre with prices
outside of that area so what could be good news for London might
not be quite such good news for Kent.
Q386 Clive Efford: It is not good
news for south east London. How satisfactory is the Oyster card
from the passengers' perspective.
Mr Barnes: Oyster has been a massively
beneficial product for London but there are some uncertainties
about the future. I think everybody needs to be very clear about
those uncertainties. One of the reasons that Oyster has been so
beneficial with the pay as you element of Oyster has been the
fact that on Transport for London services you get a discount
in the fare that you would pay compared with the fare that you
pay if you pay by cash. I think that there has been an expectation
that when Oyster pay as you go is extended to the national railways
that discount will automatically be applied to national rail fares
where pay as you go is accepted. There is no guarantee of that
at all. In fact, some train operating companies have said that
they do not intend to give that discount. Whereas we have seen
some companies in the recent pass actually accepting them, others
have said they positively will not. This will cause confusion
and cause massive disappointment I suspect potentially to your
constituents if South Eastern were to decide not to give the discount
that currently applies to travel on TfL services.
Q387 Clive Efford: How will that
work? If you have a smartcard and you are travelling around the
system, you could go from one section of the network that offers
the discount and one that does not. How will you know?
Mr Barnes: Because you have to
click in and click out of each section.
Q388 Clive Efford: Does it tell you?
Until you have clicked in or out, supposing there is a display
screen there to tell you what has just been taken off your smartcard,
how do you know?
Mr Barnes: The current situation
with Oyster on Transport for London services is that there is
a daily cap; it cannot take more than the daily cap off the service.
The detail of how it is going to work on the national railways
has not yet been worked out, but I can foresee some very real
problems. Southern recently decided to accept Oyster pay as you
go on their service from Clapham Junction up to Watford Junction;
that parallels the service operated by the London Overground.
That is good news for passengers. However, as I say, South West
Trains have made it clear to us that they believe in their franchise
bid there was no provision at all in the financial bid that they
put together for them to give a discount.
Q389 Clive Efford: This is disastrous,
is it not? If, for instance, South Eastern were to say that they
are not going to offer the discount on pay as you go Oyster cards
that means that the Oyster is irrelevant for commuters in a quarter
of London, is it not?
Mr Barnes: It is not necessarily
irrelevant because it does speed up the passage, for example,
through the ticket gates and it does enable people to travel more
easily if not more cheaply. However, I would agree with you that
the confusion that could result from different train operating
companies in the London area applying a different policy could
be very unacceptable, confusing and in many respects it could
result in passengers believing that Oyster pay as you go is going
to deliver one thing and it delivers something else.
Mr Smith: From our research the
Oyster card has been a tremendous success. The only downside that
we can pick up from our research is the inability of passengers
to be able to see what they have got on it or what they have got
left. It is a relatively dumb piece of plastic in that respect
unless you actually have some sort of contact with the system.
I think Oyster's success has been built on the fact that we have
had one organisation specifying the introduction of it—Transport
for London—and one contractor delivering it and they meet
exactly together. Once you get 23 train companies or however many
trying to do this there has got to be a common agreement otherwise
the chaos that you are predicting will come about.
Mr Joseph: Going back to Mrs Ellman's
earlier question about whether there is a strategy, there is no
strategy. The Department for Transport needs to specify and be
an intelligent client that creates an Oyster style product across
the country.
Q390 Clive Efford: What is your understanding
of the conflict between the technology involved behind ITSO and
Oyster?
Mr Barnes: Oyster has been developed
by a company, as Mr Smith has said, and is basically a monopoly
product, monopoly supply, monopoly cost, et cetera. The interface
of the ITSO product I am told is extremely difficult in respect
of the pay as you go element of the stored value ticket. As you
know Oyster is a double product, on the one hand it can be a period
ticket, on the other hand it can be a stored value ticket. It
is the stored value element where there is a problem on the interface
and I believe, although I am not a technical expert, that the
problem is having the information stored on the ITSO product that
can be read by the Oyster machinery in respect of pay as you go.
I believe that is where the problem lies.
Q391 Clive Efford: Are you aware
of an internet ticket sales line that claims it can provide an
ITSO type smartcard that will work on the current Oyster systems
without requiring any new gates or readers?
Mr Barnes: I am not personally
aware of the detail of that; I have heard of the company that
is making that claim but I do not know the details.
Q392 Clive Efford: Are you aware
of the current rail legislation that allows train operators to
stop sales of certain promotional tickets and that this is likely
to increase under smartcards?
Mr Barnes: Certainly the rail
companies can sell promotional tickets as much as they wish to.
They have to sell a particular core range of tickets but above
that they can sell any tickets that they believe are in their
commercial interests.
Q393 Clive Efford: This question
is about something more than that, it is actually blocking the
sale of other sorts of tickets that might be in a passenger's
interest but not in the train operator's commercial interest.
Mr Smith: I am aware of this because
I would have thought it would still have been in the train operator's
interest to sell products which are specific to perhaps just that
train company, whether it is Virgin or South West Trains or whatever.
You are quite correct in your analysis that that benefits consumers
because you have a degree of choice.
Mr Barnes: What I suspect it may
not be feasible to do is to sell it through the Oyster product
or through the ITSO product because the benefit that the companies
have from their promotional tickets is that they are usually only
sold by that company and they get all the money for it. When you
go down the route of an Oyster product or an ITSO product it is
a shared value and they have to share the money that they get
in. I suspect what you are alluding to is that if a company wished
to sell a promotional product it would still have to be outside
the ITSO/Oyster product.
Q394 Clive Efford: What is the future
for the travelling public? At the moment if you start your journey
on a bus you cannot buy your train ticket, what would solve this
through-ticketing problem for the public? What do you envisage?
Mr Barnes: We would definitely
advocate wider sales opportunities for multi-model tickets and
perhaps this is the right point to draw your attention to a further
potential problem with the ITSO/Oyster product because it has
to do with ticket sales. Again South West Trains, under its agreement
with the Department for Transport, will, we understand, be accepting
the Oyster pay as you go product but it does not intend to sell
the Oyster pay as you go product; it only intends to sell the
ITSO product. Other train operating companies in the London area
have said that they will both sell and accept it so in the South
West Trains area—and maybe elsewhere, I do not know—passengers
who wish to top up their Oyster pay as you go product will not
be able to do it at their local South West Trains station, they
will have to go to another ticket sales outlet. We think this
confusion is absolutely awful and perhaps a further indication
of lack of integration and ticketing policy.
Q395 Clive Efford: Can I just clarify
that they are actually saying they will not allow TfL to put their
machines on their station forecourts so that Oyster card users
can top up their cards?
Mr Barnes: I think the problem
is that South West Trains would have to invest in the cost of
that product.
Q396 Clive Efford: What if TfL suggested
that they put the machines there themselves?
Mr Barnes: They would be very
happy to accept anything free.
Mr Edwards: Could I just make
the point that from the first of April next year all concessionary
pass holders in England are going to be issued with an ITSO smartcard
for their concessionary fare travel. This is a major investment
by the Government but they will be of no use getting on a bus
in London because they will not be able to operate the Oyster
machines there so they will be taken as paper tickets. There really
needs to be something joined-up here.
Mr Smith: I think trying to guess
the future is always a bit dangerous but we did ask passengers
what they thought the future as being and funnily enough it does
not look that different from where we are now, which is quite
reassuring. People see the smartcard as being the key where you
can use a smartcard in different parts of the country, in different
urban areas, a smartcard which has this element of both stored
value and pay as you go, but that is not a replacement for that
ability to have staff to talk to, to have other methods of buying
a ticket. I think the future is smartcards.
Q397 Graham Stringer: Will you tell
us what progress you think there is being made on the conflict
between composition and cooperation on ticketing?
Mr Joseph: The short answer is
some, but not enough. The opinion that we commissioned said that
the way in which the Office of Fair Trading had interpreted the
competition law with respect to bus services was too narrow and
in fact not in the passengers' interest. It proposed in summary
that the Office of Fair Trading would be able to allow agreements
between operators subject to the public interest test that is
being proposed to apply to quality partnerships. In other words,
that all agreements between operators that met the public interest
test should be allowed. The result has been some progress in the
sense that the bill now removes some of the rather extreme penalties
that were threatened through the Competition Act against the bus
operators who happen to catch each other's eye in the street and
obviously deemed to be a cartel arrangement. First group and Stagecoach,
are at least not now threatened with dawn raids and 15% fines
on their entire turnover. Some of the penalties have been removed
but we are a long way from seeing an approach by the competition
authorities that actually facilitates the integrated ticketing
that this Committee is seeking in this inquiry. We understand
that draft guidance has recently been produced as part of the
Local Transport Bill proceedings. The lawyers who have been commissioned
on this have said they will scrutinise that for us and we are
due to go back to the Office of Fair Trading and the Department
of Transport and suggest ways in which that guidance can be changed.
We have also said to the Department that subject to what the lawyers
say we will suggest amendments to the bill either in the other
place or when it comes to this House in order to give effect to
what passengers actually want, which is the ability to be able
to get a ticket which is valid on all the services on a particular
route. The discussion we have had has been about London where
there is at least some product that allows people to get on different
buses run by different companies because they are part of the
network. Outside London we are a very, very long way from that.
We did actually get examples from passengers, not just in rural
areas but in places like Sheffield, where there are strong examples
of where, if you want to use the tram, you have to buy a Stagecoach
Dayrider but if the Stagecoach buses do not run you also have
to buy a day ticket for First Buses. We are a very, very long
way from the vision that we were discussing about London a few
minutes ago, in which you can get a single product that will take
you door to door.
Q398 Graham Stringer: That is very
interesting. I have to say, I am rather in favour of dawn raids
on First Group and Stagecoach, there have not been enough. What
I would like your views and advice on, Mr Joseph, we all want,
with a guiding public mind, sensible integrated ticketing. Is
that going to open the door for more anti-competitive monopoly
behaviour that is not in the interests of the passengers between
the big five bus companies, of which there has been some evidence
in the past, there have been some prosecutions but not nearly
enough when you look at the overall evidence.
Mr Joseph: The lawyers we commissioned,
who do know the competition law very well, were clear about the
public interest test that needs to be applied to such agreements.
Where it is in the public interest for operators to agree to accept
each other's tickets or indeed where an area-wide ticketing system
can be set up, then there is not a problem that is against the
public interest. That does not give a blank cheque to operators
to shut out other operators to agree deals that are against the
public interest, but overwhelmingly, in situations outside the
areas envisaged by the Local Transport Bill where you have quality
contracts, where you have multiple operators, the evidence is
that people want to be able to get a single ticket that is valid
on each other's services. The operators want to provide that and
the interpretation of the competition law by the Office of Fair
Trading is impeding that.
Q399 Graham Stringer: Just staying
with our friends from Stagecoach and First Group and the other
members of the big five, they survive by and large by tendering
their services through public subsidy. Have you analysed that
there may be, or have been where concessionary fares have been,
unintended consequences for people who are not concessionary fare
payers in the passenger services provided? I hope that question
is clear. When you bring in the concessionary fare scheme it changes
the level of demand, the kind of demand. It enables the bus companies
to target their services more on public subsidy. Are you aware
that that has changed the services in any sense?
Mr Joseph: We are starting to
get anecdotal evidence of that happening. We have not done a full
survey and it is probably premature to do so until after the first
of April. We have, for example, seen in Sussex a situation where
there have been serious cutbacks in services around Worthing,
for instance. We have had press coverage turn up other evidence
on that. We have started to get ordinary people writing to us
saying—it looks as if the concessionary fares have an inadequate
compensation for operators in this—that this is resulting
in worse services in certain areas and it also has an impact on
the other fares charged, particularly off-peak fares charged by
operators as well. I think the previous evidence the Committee
has had does not, in this case, lead to a debate between the local
authorities and the bus operators. I think all the evidence we
have had has tended to put the blame for this at the door of the
Government in terms of the formula they have used to compensate
operators and in particular routing it through district councils
rather than the passenger transport executives or county councils
and the level of payments that the Government has given. As my
colleague from TravelWatch South West said, we will have to see
how the extra £212 million that the Government has made available
for the scheme after the first of April works out, but I think
there are still concerns that particularly in tourist areas and
in places of high demand there will be problems if there is not
full compensation given through the local authorities to operators.
I think, to put it brutally, there is a danger that pensioners
will get free travel concessions and not have any buses that they
can use them on.
Mr Edwards: Since the first of
April 2006 there have been a large number of commercial services
in south west England withdrawn and on many occasions the bus
company—a subsidiary of the major groups—stated that
the revenue from the routes has fallen due to inadequate concessionary
fare reimbursement. We obviously do not have access to any financial
information to state whether that is true or not true. What we
do see, therefore, is that the local authority then has to go
out and put out a contract for a service which usually, because
of financial constraints, is less good than the service that was
previously provided at substantial cost to public funds.
Mr Smith: Again some anecdotal
evidence, but the introduction of concessionary fares on the buses
of course has had an impact on the railways in some parts of the
country. Previously there was the bizarre situation where the
bus fare was more than the rail fare in many rural areas. The
introduction of free bus travel has, to a degree, diverted quite
a few passengers onto the buses and away from the trains where
similar concessions are not available at the present time.
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