Fares: 2 for 1 deal now?

24 January 2013

The media interest in the annual New Year fare rise story showed no sign of abating this year. Above-inflation fare rises still caused a storm of comment. This is despite the fact the actual rises were affected by two things. Firstly, it was blunted by the Government’s decision to drop the planned RP1+3 rises. Secondly, it was smoothed by the train companies spreading the pain and not hiking season ticket prices on individual routes. The fact we have now had 10 years of above-inflation rises also added an anniversary element which further fanned the flames.

So, where does all this leave the debate? Well, RPI+3% must be dead now. The Government has announced a sunset on RPI+1%, although we don’t yet know when the sun is actually setting. The green fields of inflation-only rises beckon – although don’t forget there was a mystic era of inflation minus 1% rises! There is talk from the Opposition about cracking down on the so-called flexibility around the basket of regulated fare rises.

The rise in passenger numbers has swelled industry coffers. For every pound the taxpayer now invests in the industry passengers are putting in two. Not far from the 25% taxpayer/75% fare payer contribution that brought about the above-inflation rises in the first place. Rather like a normal business, rail is attracting more customers and it maybe does not need to exploit a somewhat captive audience any more. Ironically the above-inflation fares didn’t even bring in that much extra revenue – perhaps more of a message to the Treasury that users are bearing the pain as well?

This brings the focus back to where it probably should have been in the first place: quality of service and cost reduction.

It is too early to claim victory on fares, but it seems pretty clear passengers have simple had enough. Revolt? No, not very British, but weary resignation has turned pretty sour.