Above inflation fare rises

[whole diary]

[TaplowGreen]

.....will no doubt be the source of great debate!!!

http://news.sky.com/story/1321154/rail-passenger-fares-to-rise-by-3-5-percent-in-2015

[ChrisB]

Plus 2% flex, potentially, some up by 5.5%.

But 4 months before the election?....nah!

Expect an announcement in the Autumn statement, and thus late to load into systems as that Statement isn't due until early December, I understand. (Although the Chancellor might tip the TOCs^▸ (Train Operating Company) off sooner, so they don't have to re-calculate like they did this year)

At which point, those campaigning will claim victory. A false one, as without the election, chances are that they wouldn't of won. Cynic, moi? :-)

[Fourbee]

Are train fares in the RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context)) basket? i.e. do the above inflation rises feed into the RPI figure for the following year, leading to above inflation, above inflation rises?

The compound effect of price rises "feels" quite noticiable over the past few years IMO^▸ (in my opinion).

[grahame]

Are train fares in the RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context)) basket?

What an interesting question ... see
http://www.ons.gov.uk/ons/rel/cpi/cpi-rpi-basket/2013/index.html

Motoring expenditure Fares and other travel costs make up some 12% to 14%  of the basket

[stuving]

Motoring expenditure Fares and other travel costs make up some 12% to 14%  of the basket

Item CJXU 07.3.1 "Passenger transport by railway" had a weighting in CPI of 1.1% in 2014 It was 0.8% in 1989, and 0.9% in 2013 before jumping to over 1%. So the positive feedback effect will be very small.

Of course there are a number of other things that are also indexed to CPI or RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context)) that also appear in the indices themselves. Not enough in total to make it unstable - though that is a real risk; if you try to index everything then inflation does tend to take of exponentially.

Data corrected and updated.

[Super Guard]

.....will no doubt be the source of great debate!!!

http://news.sky.com/story/1321154/rail-passenger-fares-to-rise-by-3-5-percent-in-2015

Fares are RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context))+1%, so yes the headline will always be "above inflation rise".

But 4 months before the election?....nah!

Exactly.  Sorry Chris, you'd make a rubbish Daily Mail journalist 

[Andrew1939 from West Oxon]

It is a heads you win, tails you lose.
Since the two inflation price indices have been in operation (RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context)) & CPI) I think the RPI has always been higher than the CPI. So the government uses the higher RPI figure for price increases but for pensions and benefits it uses the lower CPI figure.

[TaplowGreen]

I noted that there was also much talk of reducing the bewildering number of ticket options available to just a few which would certainly be a good idea, and put the onus on the TOC^▸ (Train Operating Company) to sell the customer the most economical option every time - long overdue.

[SDS]

It is a heads you win, tails you lose.
Since the two inflation price indices have been in operation (RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context)) & CPI) I think the RPI has always been higher than the CPI. So the government uses the higher RPI figure for price increases but for pensions and benefits it uses the lower CPI figure.

Have a look at http://swanlowpark.co.uk/cpirpimonthly.jsp around 2009 and further into the past. RPI was negative and CPI was high. But yes generally CPI tends to be lower then RPI hence why the gov wants everything to be based on CPI. Even the gold plated railway pension increases used to be based on RPI figures.

[JayMac]

Archive news item from the Daily Mash, but worth digging up:

Train companies praised for punctuality of fare increases

RAIL fare increases are to arrive bang on time yet again.

The price increases will be unaffected by technical failure, leaves or something that happened two days ago near Swindon with some kids and a breeze block.

43-year-old commuter Tom Logan said: ^You^ve got to hand it to these people, although they can^t run a transport network for s**t they deliver price increases with smooth, machine-like regularity.

^Ever since I^ve been commuting I don^t think there^s ever been a delay in the price going up. Nor has the promised price increase ever been replaced by a bus. The effortless, almost robotic efficiency with which the cost of my ticket goes up would impress even Kraftwerk. They^d probably write an album about it called Expensive Trains or The Empty Wallet Man-Machine.^

Office worker Emma Bradford said: ^It^s quite a logistical feat, printing all those tickets with the higher prices on, making sure the desk staff are briefed to charge us more and ensuring that large fines are in place for anyone with the wrong type of ticket. It^s just great work.^

However commuter Tom Booker said: ^These fare increases are a p***-take, these fat cats just mutter ^infrastructure^ then go and buy a load of expensive GQ magazine-style watches.^

^They should re-nationalise the trains so at least they could be s**t in a fair way.^

As I got this item via Facebook I think I should enter into the spirit of their experimental tagging system for such 'news' items and mark it [satire]. Just in case anyone isn't sure. 

[patch38]

And a more recent one from the Mash yesterday:

RAIL fares will increase by inflation times two, plus the pathetic little pay rise you are probably not going to get anyway.
 
Britain^s ^train companies^ announced an increase of 3.5 percent, while the consumer price index is currently 1.6 percent and wage increases are being paid in coupons for poor quality digestive biscuits.
 
A spokesman for Great Western said: ^We^ve painted some of the trains so that^ll be fifty quid.^
 
Commuter Tom Logan said: ^It^s fine because apparently they^re going to invest in some new trains that are all pointy and shiny. I heard a rumour that one of them has a toilet.^
 
The Great Western spokesman added: ^You can^t afford toilets.^

http://www.thedailymash.co.uk/news/society/rail-fares-to-increase-by-two-inflations-and-a-pay-rise-2014081989693

[JayMac]

Editorial piece from the guardian:

The Guardian view on rail fares: unfair

Travelling by train produces benefits for everyone ^ less air pollution, lower greenhouse gas emissions, fewer traffic jams. Passengers should not have to pay two-thirds of the cost

This government is keen on trains. Investment in rail over the next five years is projected to be around ^12bn, and that is before spending on HS2^▸ (The next High Speed line(s)) really gets going. In June, the chancellor, George Osborne, described rail as essential capacity that would change the economic geography of the north of England. He is right. But in the years since 2010, he has cut funding by 9% across Britain, and last year, in England, it accounted for barely a quarter of rail spending. As a result, fares are going up fast, faster than earnings. Next year ^ unless Mr Osborne intervenes ^ they will rise by between 3.5% and 5.5%. Fares will have risen by 25% over the course of the parliament. Some season tickets will cost nearly a quarter of the average wage. Two-thirds of the current cost of running the railways is now met by passengers. Building railways can only be good for the country in the long term if people can afford to travel on them.

Passenger travel has doubled since the mid-1990s in an explosive revival of rail driven by prosperity, convenience and, in the south-east, the cost of London housing. For a good many rail users the experience of travelling by rail has improved too ^ more trains and a more comfortable and reliable service. The question of how to pay for it has been more complicated. Part of the problem is that improvements are piecemeal. An attempt to make all rail users in Kent pay a premium to cover the availability of the high-speed Javelin service for some of them was finally abandoned a year ago. Travellers on the west coast mainline out of London have mainly new Pendolinos, while travellers going east of London have rolling stock that is nearly 30 years old. Withdrawing subsidy and shifting more cost on to rail users further complicated it. It was a Labour transport secretary who introduced the formula of retail price inflation plus 1% for regulated fares, with an extra increase ^ cut from 5% to 3% last year ^ for unregulated fares such as intercity and advance tickets. It was the coalition that left rail fare increases pegged to RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context)) while changing to the lower consumer price index for benefit upratings.

It is an indication of just how politically sensitive rail fares have become that Mr Osborne has been forced not only to reduce the train operating companies^ scope to raise prices ^ the so-called flex ^ but last year also held the price increase to the level of the RPI. When earnings have lagged behind the cost of living for a whole parliament, every government-controlled price rise ^ from fuel duties to energy bills ^ becomes a political issue, all the more so in an election year. This is not about who owns the railways. British Rail fare hikes were legendary. It is about making a proper estimate of the real value to society of travelling by train.

And a response to that editorial by the Libertarian think-tank The Adam Smith Institute:

This train fare question isn^t difficult you know

The Guardian rather jumps the shark here:

"The Guardian view on rail fares: unfair
Travelling by train produces benefits for everyone ^ less air pollution, lower greenhouse gas emissions, fewer traffic jams. Passengers should not have to pay two-thirds of the cost"

Actually, a small engined car with four people in it has lower emissions, lower pollution, than four people traveling by train. So it simply isn^t true that everyone benefits from more train travel.

There are indeed some truths there though. It simply would not be possible to fill and empty London each day purely by private transport: some amount of commuting public transport is going to be necessary. And there^s no reason why those who benefit from that should not pay for it: as they largely do through the subsidy of London Transport paid for by Londoners.

But on the larger question of who should pay for the railways of course it should be those who use the railways that pay for it. Some City fund manager who commutes in from 50 miles outside London should not have his lifestyle choice subsidised by the rest of us. We should not be taxing the man who cycles to work at minimum wage in order to pay for wealthier people top travel longer distances.

The Guardian is, once again, forgetting that there is no magic money tree. If rail users do not pay for the railways then there is no unowned cash that can be diverted to doing so. Either the rest of us put our hands in our pockets or we don^t. And why should the poor pay taxes so the middles classes can live in the greenbelt?

[TaplowGreen]

.....I think this gives it some perspective;

http://www.telegraph.co.uk/news/uknews/road-and-rail-transport/11043893/Rail-fare-hike-Britain-vs-rest-of-Europe.html

[IndustryInsider]

Gosh, Poland is cheap isn't it.  Wonder what the average wage is for people commuting in Warsaw? 

And I wonder how advance fares, which many people get very cheaply, compare on the London to Bristol and Marseille to Nice route (which, funnily enough is a coastal route between two large places nowhere near the capital city, so you'd expect cheaper prices).  I assume they've used walk-up fares for their comparison?

Oh, and what about journey times and frequency of train which should affect the price?  Marseille to Nice looks like it takes over two-and-a-half hours (around an hour longer than London to Bristol) with direct trains that run far less frequently. 

In short, comparisons like that are always terribly misleading and put very little into real perspective if you ask me.

[TaplowGreen]

Gosh, Poland is cheap isn't it.  Wonder what the average wage is for people commuting in Warsaw? 

And I wonder how advance fares, which many people get very cheaply, compare on the London to Bristol and Marseille to Nice route (which, funnily enough is a coastal route between two large places nowhere near the capital city, so you'd expect cheaper prices).  I assume they've used walk-up fares for their comparison?

Oh, and what about journey times and frequency of train which should affect the price?  Marseille to Nice looks like it takes over two-and-a-half hours (around an hour longer than London to Bristol) with direct trains that run far less frequently. 

In short, comparisons like that are always terribly misleading and put very little into real perspective if you ask me.

Perhaps you'd like to add the evidence to go with the assumptions/speculation/rhetoric/sarcasm you've already supplied to allow us all to decide whether its a fair comparison?