As train fares across Britain look set to rise 6.2% by January, the government faces the growing wrath of the thousands of commuters increasingly being priced out of public transport. But what might an alternative look like? And how might this bequeathing of the rails to ‘train toffs’ bite back in the next election?
Every August for the last ten years, rail passengers have found out how much their fares are likely to go up the following January. And every August for the past ten years, Ministers in charge have done their best to either hide away on holiday or face down the protests with some defence of why a system designed originally to protect passengers from higher fares has ended up being used by governments to extract more money from them.
The system that delivers this pain for passengers (and as a result, pain for the politicians involved) is a formula that sets the January fare rise at a fixed percentage related to the previous July’s inflation figure. After privatisation, fares were pegged to inflation (and then to 1% below inflation under John Prescott) but from 2004 fares have risen at RPI+1% each year.
In 2010, the new Coalition Government switched the formula to be 3% above inflation. They backed down on this for 2012 but despite helping motorists by postponing the rise in fuel duty, the Treasury seem very reluctant to do so again for 2013. This means that with July’s RPI rate jumping to 3.2%, fares are planned to go up by an average of 6.2% from January.
The response has, not surprisingly, been particularly vociferous. Better Transport’s Fair Fares Now campaign made sure that, as in previous years, there were protests - this time focused on the danger that only "train toffs" will be able to afford the train.
At a time when the economy is flatlining and wages are barely increasing, this level of increase will really bite. Many commuters are already paying 15% of their wages just to get to and from work. If the Government sticks to its policy of fares increases, by 2015 popular commuter journeys to London from places such as Cambridge, Brighton and Canterbury will have risen by £1000 a year over just four years. Train companies can also “flex” the average rise on individual routes so some passengers could face a rise of up to 11% on their route.
Media reporting of the rises has been almost universally hostile. ‘Soaring rail fares will do nothing for recovery’ and ‘Great Train Robbery’, to quote the Telegraph and the Mail respectively. And herein is the political rub. Many of the constituencies with large quantities of London commuters are Conservative marginals, leaving a number of MPs fearing for their seats. Some Tories have even gone public with their criticism. The Guardian reported one Kent MP as accusing ministers of using rail fares as "a disguised form of taxation". A number of others have called the rises unaffordable, and many more have presumably been seeking private discussions with the Transport Secretary and the Treasury. Our research shows how vulnerable some seats are to a commuter backlash.
It’s not surprising that the Labour party is looking to score political capital out of this by claiming that they would switch to the old formula and forbid train companies from flexing fares as well. Lib Dem MPs like Julian Huppert have also been keen to distance themselves from the policy.
The Government's reasoning is based on two points. First, the increases are needed to pay for the £9.4bn of planned investment in the network. The government rightly cites investment as necessary to produce more reliable services and better stations and to make up for decades of stop-start funding. But there is no reason to hike fares to pay for this, particularly given the fall in share of government spending on rail compared to income from other sources.
Second, the Government states a commitment to ending above inflation increases at some point in the future. This needs to happen now – for a wide range of reasons. On the economy, Network Rail estimates that one billion work-related journeys are undertaken on the railways every year. Pricing people off the trains and onto the roads – or out of work altogether – would be economically counterproductive.
Rail is often more sustainable than other transport options, too. If public transport is too expensive – ‘a rich man’s toy’ as former transport Secretary Philip Hammond dubbed the railways – then poorer households are either less able to travel or completely reliant on the car, with all the attendant impacts on congestion and social isolation. Railways make for good land-use planning, too. In our towns and cities, development around railways tends to be higher density and less car-dependent. This uses less land and supports existing communities.
We also need a competent rail network if we are to get anywhere near our environmental responsibilities. Because it’s more efficient, a well-used train network produces significantly less carbon emissions than transport based only around roads. As such, rail is part of any serious emissions reduction strategy.
In Better Transport’s ‘Fair Fares Now’ campaign, we have been highlighting the steps the Government needs to take to get out of the hole successive administrations have dug. First, before the fare rises kick in at the beginning of January, the Government needs to match the support it showed to road users in postponing the planned rise in road fuel duty. It should call a halt to RPI plus 3% - just as it did last year.
Second, there needs to be a firm timetable for ending above inflation increases. The Government is committed to this “in the long-term” but without a target date.
There is of course a third factor. If the Government continues with its palpably unfair policy of hiking up the cost of train travel, they will have to answer at the ballot box in the General Election. Many commuters will be keen to have their say. In the Autumn we will find out exactly how much individual fares will go up by and then on the first day back in January, passengers will start paying the higher fares. Not surprisingly, this system is pretty much guaranteed to maintain passengers' anger at the Government.