What should we make of the rail fare rises? It’s complicated

We are in the midst of one of the all too frequent bouts of outrage about rail fares—with all the usual oversimplification of a complex issue. This happens in a cycle, first with the announcement in August of the rate of inflation on which the formula for rises is based, then the December confirmation of the precise nature of the increases and finally the introduction of the new fares in the first week in January.

We have just entered phase three, as today a hike comes into effect. Chris Grayling, the transport secretary, has come under heavy fire from his political opponents, not helped by the fact he is currently out of the country—and so stands accused of “running scared.”

Each step in the three-part cycle receives a disproportionate amount of the annual media coverage of the railways—and helps prevent a more considered and thorough appreciation of what is going on in an industry hated and loved in equal measure.

Just to be contrary, let’s look at the good news in Britain’s rail industry first and then fulminate about what is going wrong. Investment levels are at an all-time high and passenger numbers have more than doubled, to record levels historically, though there has been a slight decrease in the past few months. This year will see the opening of the Crossrail tunnels under London, a £15bn project to relieve pressure on the London Underground, and the expansion of Thameslink services to a range of new destinations, also the result of multi-billion pound investment.

And it’s not just London. The line between Glasgow and Edinburgh is being electrified, the opening of the Ordsall Chord in Manchester will greatly improve local services and new Hitachi trains are being introduced on the Great Western line, and soon on the East Coast. Overall, some £48bn will be invested on the railways in the period between 2019 and 2024, most of which is being provided by government cash.

Given all this, say the industry PR people, what is there not to like? Well, quite a lot actually. While the outcry over Britain’s railways comes in fits and starts, and criticisms are often levelled at the wrong things, there are indeed problems which need calling out.

These latest fares rises are a result of a long-term government strategy of placing more of the burden of running the railways on passengers rather than taxpayers. This is short sighted and bad economics. Encouraging people to use their cars by always scrapping fuel tax rises in the Budget, while imposing big annual train fares hikes, is leading to increased congestion and all the problems that go with it. Moreover, the fares increases are becoming counterproductive as they are acting as a deterrent for rail travellers, putting them off taking jobs in the centre of cities or encouraging them to work at home part of the time as witnessed by the recent reduction in season ticket sales.

While the government is mostly to blame, the train operators are colluding in the hikes by increasing unregulated fares—over which they have total control such as peak and advance fares—by almost the same amount as those which are regulated—the season tickets and the off peak returns. That’s because they have, for the most part, bid for the franchises on the basis that fares would go up and they fear making a loss if they do not impose the rises.

The Labour Party, of course, argues that renationalisation would help keep fares rises lower. This may be true to a limited extent. Renationalisation and reintegration of the railways could result in lower costs. Moreover, the relationship between government policy and fares levels would be clearer. However, with money in short supply, and lots of other spending commitments, it is doubtful whether passengers would avoid rises full stop.

The worst aspect of this tri-annual outpouring of outrage is that it masks a much bigger failing, the fact that none of this is part of a coherent or rational transport policy. We have a Chancellor bleating on about driverless cars being on the roads by 2021 (dream on) and yet failing to recognise that the more fares go up, the more traditional cars will pour onto the streets, causing disruption, delay—and pollution. It is astonishing that in an age of extreme weather and a widespread view that it is caused by climate change, policy on public transport remains an area where short-termism and incoherence prevails.

Meanwhile with far less public scrutiny, bus fares continue to rise and subsidies decline, the combined effect being to severely limit people’s ability to travel to work or for leisure purposes—and yet the issue barely ever reaches the media.