Passenger Focus response to Government’s Red Tape Challenge

15 December 2011

General comments: Passenger Focus recognises the drive towards increasing efficiency. Inefficiency adds to costs and costs are invariably passed back to passengers either in the form of fare increases or in terms of lost investment opportunities. Time and money spent on ‘red-tape’ means less spent on what passengers want. However, it is dangerous to view all regulation as being unnecessary simply because it imposes a duty on the industry to do something. Much of rail operates in a monopoly situation – there is little in the way of direct competition between train companies and, when it comes to commuting into central London, little in the way of viable alternative modes of transport. This situation ends in many rail passengers being ‘captive consumers’ who are not in a position to ‘vote with their feet’ if they do not like the service being offered. If a market cannot regulate itself then it is right that consumer protection is applied (and enforced) through regulation. This does not have to be legislative, it can come through a licensing regime or via contract (i.e. a franchise agreement) – but the important point is that it is present. Regulation establishing passenger rights and protections will clearly establish some duties on the rail industry – it would be particularly ineffective if it didn’t. It is crucial that this isn’t just seen as a cost but that the benefits to passengers, are also assessed. In short, we believe that alongside the regulatory impact assessment should be a passenger impact assessment with the key question being: what will be the effect on passengers of removing the regulation.