Rail fare prices - the basis of increases (merged ongoing discussion)

[whole diary]

[ChrisB]

well, it's a story, innit.....

[JayMac]

The cost of a standard-class Anytime Single on a First Great Western (FGW^▸ (First Great Western)) train for the 77-mile journey from Swindon to Paddington is ^54.50, which rises to ^89.50 in first class. At more than 70p a mile, this is the most expensive fare in the EU^» (European Union - about).

Er... not the most expensive fare in the EU, nor the UK^▸ (United Kingdom), nor England. In fact not the most expensive fare from the County of Wiltshire.

Westbury to Paddington STD Anytime Single ^77.00 for a 95^ mile journey. That's 80.6p per mile.

[JayMac]

From the Evening Standard:

Rail commuters face major fare increases next year, transport sources warned today.

Typical prices will rise by six per cent, but passengers at Southeastern, the busiest commuter company, face increases of eight per cent. The rises will hit up to 500,000 passengers in the South.

It comes before an official announcement on the Retail Price index for July, on which the January increases are based.

RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context)) is understood to be five per cent. Rail companies are allowed to increase peak-time fares by one per cent above inflation ^ meaning average rises of six per cent. An annual season between Brighton and Victoria would rise by ^213.

A senior industry source said: ^While the Government may order higher fares than planned it now looks unlikely. Ten per cent fare increases are now thought excessive.

^The industry view is the usual rise will now take place in January and any extra could follow in the spring.^

[ChrisB]

Yup - Industry talk I've heard also mentioned rises in the May fares round as well.

Although sources are saying that if the Government insists on leaving any decision until the results on the Comprehensive Spending Review are announced on 20 October, there won't be enough time to get the fares calculated and loaded in time to beat the deadline of 4 weeks before January 1 implementation date....and that the whole rise may be postponed to May.

If that happens, the TOCs^▸ (Train Operating Company) won't be best pleased, as the majority of annual renewals that place at / around January fares round - hence they will get a further year without an increase imposed....and TOC income would be less than expected / budgeted for.

[Tim]

If that happens, the TOCs^▸ (Train Operating Company) won't be best pleased, as the majority of annual renewals that place at / around January fares round - hence they will get a further year without an increase imposed....and TOC income would be less than expected / budgeted for.

Not sure I understand.  Surely the rises that are being talking about are to help the GOVERNMENT balance their books rather than help the TOCs balance sheets.  Fare rises only make sense if the extra cash taken from passengers are recouped by the Governemnt via the subsidy/premium profile, something that would require a franchsie renegotiation if the TOC is half way through the franchise. 

I'd be more enclined to accept a fare rise if it was to tackle the enormous public debt (and as an alternative to service cuts) than if the money just went to the TOCs.  If the TOCs are loosing money on franchsies they willingly signed up to what right has teh government to use our money to bale them out?

[devon_metro]

How many peoples pay packets will be going up by RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context)) +1 I wonder 

[ChrisB]

Not sure I understand.  Surely the rises that are being talking about are to help the GOVERNMENT balance their books rather than help the TOCs^▸ (Train Operating Company) balance sheets. 

They are.

TOCs will have budgeted for around 4-6% this year - it has been obvious for a few months that RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context)) was going to be approx 3-5% this year. The Transport Minister has said that the formula may have to be higher this year, anything over RPI+1 will effectively go to the Government via lower funding to the TOCs (as they charge even higher fares)

However, if fares are unable to rise at all owing to late notification of the decision over a higher formula, then the TOCs won't even get their expectedRPI+1 in January - by the time this is implemented in May, over 50% of annual seasons will have been renewed at current rates, thus denying them the budgeted increase.

How many peoples pay packets will be going up by RPI +1 I wonder 

That question is valid every year that the formula exists. You know the answer - customers are being expected to pay more for their railway, with less coming from general taxation.
There are multiple arguments (both for & against), which we've gone through on a regular basis.

All I'll say is that it doesn't matter which major party you might vote for, they all want to reduce central subsidy, one way or another.

[Tim]

The Transport Minister has said that the formula may have to be higher this year, anything over RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context))+1 will effectively go to the Government via lower funding to the TOCs^▸ (Train Operating Company) (as they charge even higher fares)

But that assumes that Higher fares= more income to TOCs=more payemnst to Government.  That isn't necessarily the case (otherwise unregulated fares would be much higher).  There is a limit to what TOCs can charge and if fares go up too much, people will not travel. 

[ChrisB]

Hmmm - not sure that's true about season tickets....

[Super Guard]

Surely TOCs^▸ (Train Operating Company) know that anyone with an ounce of common sense will be renewing their annual season ticket as close to 31st December as possible to avoid the increase, so they won't be getting any real benefit from a 6% increase until December 2011.

[ChrisB]

That will probably be a direct result of a large increase, yes - renewing a week or so in advance. You have a point there.

[Chris from Nailsea]

From the BBC^» (British Broadcasting Corporation - home page):

Spending cuts spark fears of 8% rise in rail fares

Rail fares may rise by up to 8% next year if the Department for Transport (DfT^» (Department for Transport - about)) is hit hard in the government's spending review, sources have said.

While many rail fare rises are currently capped at inflation plus 1%, the department could change that to inflation plus 2% or 3% in the autumn.

Increases are based on July's RPI^▸ (Revenue Protection Inspector (or Retail Price Index, depending on the context)) measure, expected to be 5%, which could mean increases of up to 8%.

Consumer watchdog Passenger Focus urged train operators to show restraint.

Transport Secretary Philip Hammond said: "It would normally be the case that next year's regulated train fares are calculated using July's inflation figure, plus 1%. But this is not a normal year. The scale of the financial crisis that we have inherited means that we will have to make some tough decisions in the spending review which concludes this autumn. I am therefore not yet in a position to determine next year's fare increase. It would be irresponsible, at a time when investment in the railway is under pressure, to rule anything out until the spending review is concluded."

A spokesman for the Association of Train Operating Companies said predictions of rail fare rises were "just speculation".

Gerry Doherty, leader of the TSSA^» (Transport Salaried Staffs' Association - about) transport union, said the Liberal Democrats must stick to a manifesto commitment to change the annual fare price rise formula to RPI minus 1%. Mr Doherty said that "to do anything else would be to betray rail users" who voted for the party.

Bob Crow, general secretary of the RMT^▸ (National Union of Rail, Maritime & Transport Workers), said the government was protecting rail companies from the cuts by allowing fares to "shoot through the roof".

"Private rail profits will be ring-fenced while the travelling public are forced to pay through the nose to travel on overcrowded cattle trucks on dangerously under-maintained tracks," he said.

Alexandra Woodsworth of the Campaign for Better Transport said: "Particularly now, with high fuel prices, we need to make sure the train gives people a real alternative to driving".

[JayMac]

Chris, you just know it'll press my buttons, but it's that man again: Bob Crow.

I see that 'cattle trucks' seems to be a stock quote of his at the moment.  

[inspector_blakey]

From the BBC^» (British Broadcasting Corporation - home page):

Bob Crow, general secretary of the RMT^▸ (National Union of Rail, Maritime & Transport Workers), said the government was protecting rail companies from the cuts by allowing fares to "shoot through the roof".

"Private rail profits will be ring-fenced while the travelling public are forced to pay through the nose to travel on overcrowded cattle trucks on dangerously under-maintained tracks," he said.

I'm trying to imagine the boss of a manufacturing union, let's say, denigrating his workers' product as cr*p and unsafe, but I'm having trouble...

[Super Guard]

Chris, you just know it'll press my buttons, but it's that man again: Bob Crow.

I see that 'cattle trucks' seems to be a stock quote of his at the moment.  

You'd think with a 12% pay rise he might think of something more original !