UK Rail Fares Going Up AGAIN, Even Tories Objecting

[Zaune]

The Guardian

George Osborne is facing a mass revolt by Tory and Liberal Democrat MPs over soaring rail fares, amid warnings that above-inflation increases will destroy remaining support for the coalition among commuters in marginal seats.

The chancellor will come under intense pressure to perform yet another policy U-turn when MPs return to parliament next month, after it was announced last week that many fares would rise in January by up to 6.2% – 3% above inflation – with some rising by up to 11%.

Conservative and Lib Dem MPs said they would lobby the chancellor and the transport secretary, Justine Greening, to cap increases at 1% above inflation at most. Rises at that level are written in to franchise agreements, but all of the extra 2% above that flows directly to the Treasury – prompting MPs and commuters to complain of a tax on commuting.

Government sources say Greening is sympathetic to MPs' calls, but Osborne – under heavy pressure to keep to his deficit reduction targets and to pay for new investment in the railways – is said to be less so.

Several MPs in commuter seats said they had to act after they returned from holiday to find their postbags and inboxes inundated with complaints from furious constituents.

One Kent MP – Sir John Stanley, the member for Tonbridge and Malling – accused ministers of "exploiting commuters" and using rail fares as "a disguised form of taxation".

The Conservative MP for Harlow in Essex, Robert Halfon, said: "I have already written to Justine Greening. It is a simple cost-of-living issue. Many people in my constituency are on below-average earnings and commute into London, and they cannot afford these rises."

Tracey Crouch, the Tory MP for Chatham and Aylesford in Kent, said: "A lot of Tory MPs will be seeking meetings with ministers as soon as we return. Household living standards are already squeezed and people who have to commute are feeling very aggrieved."

The Tory party deputy chairman, Michael Fallon, has also registered his concern, telling his local paper that rail operating companies must show restraint, while Philip Davies, the Tory MP for Shipley in Yorkshire, said big rises would choke off economic revival.

"It is absolutely essential that this decision is changed. Government should be on the side of the people – not hitting them where it hurts most. It is very difficult to see how we can get out of a recession when these kinds of increases leave people with even less money to spend."

With Lib Dems also calling for Osborne and Greening to back down, the issue is a further headache for the chancellor, who has already performed several U-turns since the budget in March.

Stephen Joseph, executive director of the Campaign for Better Transport, said: "With so many Conservative MPs in marginal 'commuter' seats, it is pretty clear that if ministers do not back down, they will be hit hard in the ballot box."

While ministers are standing firm so far, the rebel MPs remain optimistic, having succeeded in getting Osborne to cap fares at inflation plus 1% in last year's autumn statement.

Meanwhile – apparently sensitive to suggestions that rail chiefs might walk away with big bonuses irrespective of performance while commuters are stung for higher fares – the Office of Rail Regulation (ORR) is seeking assurances from Network Rail that it will limit payouts in the event of missed targets.

In an extraordinary development, Richard Price, chief executive of the ORR, has felt it necessary to write to Graham Eccles, chairman of Network Rail's remuneration committee, seeking assurances that "in the event of a catastrophic accident for which Network Rail was culpable, no bonuses would be paid".

Unions and MPs have expressed concerns that it has been left to the regulator to push for such assurances as Network Rail, which receives almost £4bn a year from the taxpayer, seeks to introduce a possible £12m bonus scheme for its six top directors. As chief executive of Network Rail, Sir David Higgins already earns over £560,000 a year.

Shadow transport secretary Maria Eagle said: "It beggars belief that the rail regulator has had to explain that bonuses would be inappropriate in the event of a catastrophic accident or, as is currently the case, a failure to meet performance targets."

In June, the regulator announced that Network Rail missed many of its punctuality targets last year, especially for long-distance services.

"Passengers facing 11% annual fare rises will be staggered that Network Rail bosses have the front to haggle over yet another round of bonuses," Eagle added.

"There is something morally repugnant about executives of what is in effect a publicly funded company having to be told by a regulator to forgo their huge annual bonuses in the event of a fatal crash they bear responsibility for," said Manuel Cortes of the TSSA rail union.

Well, that's something, I suppose. A return journey of less than an hour still costs £90 at peak time (or about £50 on an electrified route, which really isn't very much better), but at least they're finally embarrassed enough to try and prevent things getting any worse.

[Simon_Jester]

Is the rail network running a profit? If not, then what's happening to their government subsidies? Will they need the rate increases to balance the books?

Would they need them without the bonuses?

[Starglider]

Is the rail network running a profit? If not, then what's happening to their government subsidies? Will they need the rate increases to balance the books?

UK rail was given approx 5,200,000,000 pounds of taxpayer money last year. This was slightly under 5 GBP per passenger-journey. It is of course a significant transfer of wealth from people who don't use trains (e.g. most poorer people who rely on buses or old second-hand cars) to commuters, particularly London commuters, who use them the most. OTOH London and to a lesser extent other cities pay proportionally much more tax than the rest of the UK so arguably this is only fair.

Train company profits are present but nothing special for their market cap. The primary reason for UK trains being ridiculously overcrowded and overpriced is the same reason that house prices are ludicrously high; demand has increased faster than supply, mostly due to artificial government restrictions (planning permission to build anything anywhere is utterly tortuous), moving the equilibrium price up the supply/demand curve. The secondary but still significant reason is rail unions enforcing extremely inefficient working practices (I would say excessive salaries, but frankly the salaries would be fine if the staff were actually productive).

[Teebs]

UK rail was given approx 5,200,000,000 pounds of taxpayer money last year. This was slightly under 5 GBP per passenger-journey. It is of course a significant transfer of wealth from people who don't use trains (e.g. most poorer people who rely on buses or old second-hand cars) to commuters, particularly London commuters, who use them the most. OTOH London and to a lesser extent other cities pay proportionally much more tax than the rest of the UK so arguably this is only fair.

Actually I think that London commuters pay their way. If I remember correctly Network South East - the part of British Rail covering the London commuter lines managed to just about break even despite the need to cross-subsidise branch lines.

[Zaune]

Train company profits are present but nothing special for their market cap. The primary reason for UK trains being ridiculously overcrowded and overpriced is the same reason that house prices are ludicrously high; demand has increased faster than supply, mostly due to artificial government restrictions (planning permission to build anything anywhere is utterly tortuous), moving the equilibrium price up the supply/demand curve.

The Train Operating Companies can still do a number of things to increase capacity on their own initiative though; a couple of extra carriages added to the train at peak times, for example, or maybe run a more frequent service during those hours instead of one train every n minutes regardless of how many passengers are actually looking to travel at those times. That probably requires Network Rail to spend some money on lengthening platforms and modifying the configuration of points and signals, but why do we never hear of TOCs lobbying them to do so? Pissed off customers vote with their wallets and their feet, right? That's how capitalism's supposed to work...

Except there's a snag, isn't there? Rail networks are what economists call a natural monopoly; two trains can't occupy the same stretch of track at the same time, and there's not much scope for overtaking so they can't compete on speed. A particularly determined rail entrepeneur could lay their own track, but the up-front expenditure of effort and capital would be extremely hefty. The rail franchises are effectively a fixed-term monopoly license, during which the licensee doesn't have to give a tinker's damn whether or not they're providing a good service to their paying customers until it's time to renew the license.

Seems to me we might as well cut out the middleman and give the job of running the franchises back to Parliament, because at least that way we'd get to pick the monopoly licensee ourselves rather than having some remote committee do it.

[Vendetta]

The Train Operating Companies can still do a number of things to increase capacity on their own initiative though; a couple of extra carriages added to the train at peak times, for example, or maybe run a more frequent service during those hours instead of one train every n minutes regardless of how many passengers are actually looking to travel at those times.

There are reasons why they don't do those things.

Mostly it's due to the headway required between trains. Network safety requires a certain minimum length of clear track between trains, and on several parts of the network that limit is already reached, so you simply can't run extra services, there isn't enough track to do so.

This is also why you can't simply add carriages (or use US style double decker carriages), but this is more complex. Many train stations in England have short platforms, which can only allow passengers to disembark from two or four carriages at once. If you add more carriages or use double deckers then your stop length increases, which means that in order to maintain safe headway you can have less services on each piece of track. Ironically, then, adding more carriages per train would actually reduce network capacity not increase it in many areas.

And whilst you could lengthen platforms that would reduce the capacity of that station (or eliminate it entirely) meaning longer stops either there whilst people filter off less carriages or at alternate stations as double the normal number of people try to disembark, meaning, once more, reduced network capacity whilst you carry out the work.

[madd0ct0r]

Double deckers are under consideration (at least for freight) - the problem comes that ALL bridges over the railway, ALL railway tunnels and quite a few bridges under the railway would need rebuilding.

The section I looked at (Felixstowe to Nuneaton) is about 150miles. it had 660 separate bridges that required assessment, approx half of which would have needed rebuilding.

Railway infrastructure is not a trivial problem. Given the number of people using it is higher then EVER before (including troop mobilizations in WWII) we don't just need more trains, we really need an entire extra rail network.

[Dartzap]

They have been preparing to rebuild and reopen some of the old Beeching routes down here in Devon, and I'm sure I have heard of an old route being reopened up in Scotland recently.

Wish they'd rebuild the route to my town, but alas, my old school was built on top of it!