5 Fares and ticketing |
66. The McNulty report identified numerous problems
with rail fares and ticketing:
- the fare structure is outdated,
complex and illogical: "hard for the uninitiated (or even
the initiated) to understand";
- "the current structure does not do some
of the important things that a pricing structure should do - it
does not send efficient pricing signals to the market, it does
not help operators sufficiently to manage peak demand or match
capacity to demand efficiently and, although fares overall are
high relative to other countries, it appears that some fares are
set below the level which passengers would be prepared to pay";
- the industry is lagging behind with the implementation
of smartcards and other modern methods of selling tickets.
67. Alongside the rail Command Paper the Government
published a consultation paper on fares and ticketing which picked
up on McNulty's criticisms. It also drew on research by Passenger
Focus into consumer views on ticketing.
68. Witnesses offered widespread support for reform
of fares and ticketing. There was particular enthusiasm for the
more widespread introduction of smartcards, building on the experience
with Oystercards in London, or other ticketing innovations.
It was suggested that simpler fares could increase passenger confidence
and be linked to the promotion of integrated public transport.
69. Network Rail argued that fares and ticketing
could offer "some assistance" in managing demand for
rail services, helping to reduce peak demand. For example, "people
may be encouraged to work one or two days a week from home if
they could receive money back on their season ticket".
However, the Campaign for Better Transport cautioned against using
demand management to increase fares on peak-time trains as "most
commuters have no choice but to travel at the busiest times".
These comments were echoed by the rail trades unions.
The unions also cautioned against over-reliance on technology
for buying rail tickets, arguing that most passengers valued face-to-face
70. The ideas proposed in the Government's consultation
paper on rail fares and ticketing have merit and we look forward
to firm proposals being brought forward. However, we have concerns
in three areas which the Government must address.
71. Firstly, the Government's policy on the pricing
of regulated fares is unclear.
In 2010 the Chancellor of the Exchequer announced that for three
years from 2012 regulated rail fares would rise by RPI+3%, in
order to help reduce the rail subsidy and contribute to deficit
reduction. However, the Government has been unable to implement
this increase because of the outcry from rail users, increasing
fares by RPI+1% instead. We welcome the decision not to proceed
with RPI+3% increases but are concerned about where that leaves
the Government's fares policy, especially at a time when it is
attempting to reduce the cost of rail to the taxpayer. We recommend
that the DfT set out a long-term policy on regulated fares.
72. Secondly, although there are opportunities to
use flexible ticketing to manage the demand for rail travel more
effectively - for example by selling season tickets which provide
discounts to part-time workers - there are clear limits to what
demand management can achieve. Many lower-paid workers have no
choice but to travel at peak times.
Higher prices at peak times might make a difference to demand
at the margin but would for the most part be a tax on commuters
who have no effective choice over how or when they travel. We
recommend that the Government rule out forms of demand management
which would lead to even higher fares for commuters on peak time
73. Finally, nine years after Oyster cards were first
introduced in London, it is surprising that smartcard technology
has not been implemented across the rail network.
Steve Howes of ATOC conceded that implementation of smartcards
had been slow but effectively blamed the Government for requiring
the railway to use ITSO technology rather than the Oyster system.
He said that train companies had concentrated on other developments,
such as print-at-home tickets.
In our view, there is likely to be considerable demand for smartcards
or other ticketing innovations on the railway, incorporating the
various forms of railcard, and enabling greater interoperability
with other forms of public transport.
The Rail Delivery Group has an opportunity to step up to the
plate and show its effectiveness by spearheading the swift implementation
of innovative ticketing technology throughout the rail system
- certainly by 2020, preferably by 2015. We call on the RDG to
respond to this recommendation by explaining its plans in this
area and providing a clear timescale for implementation.
99 McNulty summary p38 Back
Ticket retailing website usability, Passenger Focus, Jul
For example ROR 10 (pteg) paragraph 2.21 Back
ROR 13 (Susan van de Ven), 16 (South Yorkshire Passenger Transport
Executive) and 18 (TravelWatch NorthWest). Back
ROR 12 paragraph 4.2. Back
ROR 22 (Campaign for Better Transport) paragraph 4.4. Back
ROR 24 (trades unions) paragraphs 54-57. Back
Ibid, paragraphs 58-60. Back
For more information about which fares are regulated see Fares
and Ticketing, Annex A. Back
For example see Passenger Transport, issue 46, 30 Nov 12,
p13 for recent examples of the piloting of new technology in this
See Q264 on recent migration from paper tickets towards other