Fare rises for 2022

[whole diary]

[TaplowGreen]

Perhaps excise duties on road fuel and fares on the railway should be linked.

If rail fares are to be increased by say 4% then fuel duty should increase similarly.
Or put another way, if fuel duty is frozen, then rail fares should be.

If the price of apples rises by 4%, why don't we raise the price of pears by a similar amount?

Not comparable at all. Apples and pears are crops the prices of which vary due to fluctuations in harvests, and varying consumer demand. Prices are not set by the government but by supply versus demand.

Petrol prices are largely controlled by the government as they can adjust the rate of duty which is a significant proportion of the retail price.
Train fares are largely under government control.

I'd be interested to understand what you think that would achieve, other than disproportionately affecting poorer people and increasing the price of other goods, because you can be assure that the additional cost would be passed on. It would have virtually no impact on demand.

You might want to consider the price of crude oil, international exchange rates and other market forces and global events when it comes to the price of fuel, but apologies for the overhead shot.

[broadgage]

I would foresee two different possible outcomes from my suggested policy.

If road fuel duties were frozen, then rail fares would also be frozen and use encouraged.

If rail fares were increased then the duty on road fuel would be similarly increased, and consumption thereby decreased. I do not believe that demand for road fuel is inelastic. Higher prices do moderate demand. Despite the moaning about fuel prices, many drivers use fuel very wastefully, examples include.

Driving fast up to a red light and then braking hard, rather than coasting.
Exceeding the speed limit.
Making needless very short journeys rather than walking to the local shop.
Driving children to schools that are within walking distance.
Not thinking ahead and combining journeys.

In the case of replacement vehicles, then fuel consumption would be considered when looking for a new vehicle. Possibly even an electric vehicle.

In the case of delivery vehicles more attention would be given to full loads rather than several partly loaded vehicles. And of course more costly road fuel might reduce demand for freight, no more trucking vegetables hundreds of miles for packing, and then back again.

[ChrisB]

Generally speaking the Government uses RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context)) when it comes to taking, and CPI when it comes to giving.

Until it comes to staff pay rises, which also are STILL based on RPI (usually +x%) - and staff costs are a big component of railway costs. It is no surprise that the Government still uses RPI%.

The recent Rail Improvement Plan document aims to sort this sort of anaomaly out & is likely to cause some friction amongst the unions. We'll see. but until the Government breaks the RPI% link on staff costs, there's no way they'll move away from RPI% on fare rises. IMHO^▸ (in my humble opinion)

[Rhydgaled]

I'd be interested to understand what you think that would achieve, other than disproportionately affecting poorer people and increasing the price of other goods, because you can be assure that the additional cost would be passed on. It would have virtually no impact on demand.

Increasing the cost of road fuel might have no impact on demand for travel, but if the additional fuel duty revenue was used to increase subsidies for bus services (running more frequent services and/or reducing bus fares (I forget whether bus operators have to pay fuel duty)) a larger portion of that demand could be satisfied by bus rather than car travel? I suggest increasing bus subsidy rather than rail because the rail network doesn't reach everywhere so, while cheaper rail fares would lesson the impact on poorer people in some areas, in areas without a rail service poorer people would be disadvantaged if the additional subsidy was targeted at rail.

[mjones]

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Demand for fuel is virtually inelastic and price has very little effect on it.

In the longer term the price of fuel makes a big difference to the types of cars people buy, which is why cars in the USA have historically been much less efficient than those in Europe. And fuel price does affect demand- DfT^» (Department for Transport - about)'s traffic growth forecasts take the cost of driving into account and are higher than they would have been had fuel duty not been frozen.

[grahame]

Campaign for Better Transport call for a fares freeze ...

Fair fares?

The effects of climate change are being felt around the world. Earlier this month, the UN chief warned of a "code red for humanity". And with the UK^▸ (United Kingdom) hosting the UN Climate Change Conference this year, it's even more important that our country reduce its carbon emissions.

So it makes no sense that people travelling by green public transport must pay increasing fares while fuel duty for drivers has been frozen for a decade and the Government is considering cutting air passenger duty.

Last week the Government deferred a decision on whether rail fares should increase. We think fares should be frozen for next year, followed by a full review: we need to rebalance pricing in favour of greener modes.

Over the past week, we've been making this case on the BBC^» (British Broadcasting Corporation - home page), in the Daily Express, the Guardian, the Telegraph and The Times, and supporters of public transport have helped us to spread the message on social media. If you use Twitter or Facebook please follow us, join the conversation and share our posts with your friends.

Raising fares would hinder vital efforts to bring down transport's carbon emissions, and worsen air pollution and traffic-clogged streets. Together let's call for a #FaresFreeze.

[broadgage]

It is reported that petrol and diesel prices are approaching the prices that prevailed about 10 years ago, with much complaining from the motoring lobby.
I would say, lucky motorists who despite 10 years of inflation are still paying about the same price as 10 years ago, and have indeed benefitted greatly from much reduced prices in the intervening years.

And by how much have train fares increased in the same 10 years ? Very substantially indeed in most cases, and often for services considered to be getting worse.

Cheaper road fuel and ever increasing rail fares are not going to encourage greener transport choices.

[Mark A]

Rail fare rise announcement postponed:

https://www.theguardian.com/politics/2021/dec/01/ministers-postponed-announcement-of-rail-fares-increase-leak-confirms

[grahame]

BBC^» (British Broadcasting Corporation - home page) TV (breaking news, 12:39)

"Rail fares will rise by 3.8% in March 2022"

But if you're lucky enough to be delayed by 15 minutes or more, you may get some back

12:17 Westbury to Swindon due 12:59
13:15 Swindon to Westbury due 13:56

13:15 Swindon to Westbury due 13:56 will be cancelled.
This is due to a shortage of train crew.

If you hold a valid single, return, or weekly ticket, you will be able to claim compensation for delays of 15 minutes or more. Please keep your ticket and visit GWR^▸ (Great Western Railway).com/DelayRepay

[grahame]

Quotes are from BBC^» (British Broadcasting Corporation - home page) News channel

"Regulated fares"

- but who sets the others under management contracts not franchises?

Usually 6 month RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context)) ... this time based on JULY 2021 (however, it has gone up since then!)

Govt says "look - taxpayer had put in £14bn so a balance between recouping costs and not putting people off" (paraphrasing BBC).  Noting 100k flexiseasons sold

[ChrisB]

Usually 6 month RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context)) ... this time based on JULY 2021 (however, it has gone up since then!)

It has been based on the July RPI every year in recent times, even last year when the increase was first delayed to March from January. This time we *gain* as the September RPI (two months later following the delay in increase date) was higher.

[ChrisB]

Not for long it wasn't

[TaplowGreen]

Well, now we know Oooooooooooooooo's gonna pay for it at least! 

[stuving]

Quotes are from BBC^» (British Broadcasting Corporation - home page) News channel

"Regulated fares"

- but who sets the others under management contracts not franchises?

Usually 6 month RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context)) ... this time based on JULY 2021 (however, it has gone up since then!)

Govt says "look - taxpayer had put in £14bn so a balance between recouping costs and not putting people off" (paraphrasing BBC).  Noting 100k flexiseasons sold

The DfT^» (Department for Transport - about)'s own news story does not actually mention "regulated" at all:

Rail fares capped to prevent high increases for passengers

Government caps rail fare increases in 2022 and delays the rise in prices until March to allow passengers more time to buy cheaper flexible and season tickets at the existing rate.

• government caps annual fare increase at 3.8%   
• Book with Confidence scheme extended to 31 March 2022, supporting passengers as they return to the railway   
• changes to rail fares will come into force in March next year, giving passengers more time to purchase cheaper flexible and season tickets at the existing rate

Next year’s rail fare rise will be 3.8%, below the current retail price inflation of 7.1%. The government will not increase fares by the retail price index (RPI) rate plus 1%, as it did in 2021.

Until the pandemic, fares were raised in January each year by a formula based on the RPI rate of the previous July, 6 months beforehand. In 2022, the increase will take place in March, giving passengers more time to purchase cheaper flexible and season tickets at the existing rate.

Presumably there will be a more formal announcement, perhaps as a minister's statement to Parliament.

Now I think that use - repeated - of "capped" can only mean no fares will rise by more than 3.8%. But as reported by the BBC and others, that isn't what they mean at all. I guess what they have put a cap on is the range of numbers they were thinking about before this one emerged - so it was an internal matter inside DfT.

So beware: this government's massed battalions of weasels have chewed up a new word, as they did "invest" which now just means "spend".

[Electric train]

This fare rise could be the final part to what is already setting it self up as a perfect storm -

Lower peak travel demand the industry are already looking on where it can save costs (ie reduce services and train capacity) the fare rise could lead to an even lower number of peak passengers which could add fuel to this.

The industry has often not put all unregulated fares up in line with the the regulated fares, this is likely to change.   The ToC's may want to push the start of the morning off peak to later in the morning to catch the time shifted commuters