Great Western Coffee Shop

.....perhaps not the best way to attract people back onto the trains when the World returns to something like normal?

https://www.cityam.com/commuters-face-hike-in-rail-fares-in-new-year/

I thought that the annual increase had been above the rate of inflation or RPI for many years now.

So did I.

As the quote is from CityAM, perhaps this is specifically referring to fares into London?

CPI is the official measure of inflation.

RPI is preferred for these purposes because as it's generally higher, it allows fares to be increased at a higher rate.

As a rule of thumb, the Government use CPI/RPI interchangeably to its advantage depending on whether it's paying out or collecting.

From Full Fact (https://fullfact.org/economy/rail-fares-inflation/)


Early in the last decade, government policy was to increase rail fares each year by a small percentage (I recall 1% or 2%) above [their] inflations rate in order to step up over time the percentage of railway income from fares to that the passengers were more paying for themselves and less being subsidised by the taxpayer, but this policy caused significant complaint and (as I recall) the extra bit often got pulled back to show that the government looked after commuters while perhaps using the faster rising indicator of costs to still have prices rise in reality. 

The matter has been further complicated by the fact that only around half the fares come under these regulations (regulated fares) with TOCs free to set others.  Because regulated and deregulated fares are available for the same journey (e.g. off peak and season ticket regulated, any time, super off peak and advance unregulated, Chippenham to London example) the flexibility on unregulated tends to be fenced in by the regulated fares - for example, no point  in offering a "super off peak" more expensive than an off peak, and a limit to how expensive you can make an "any time" return as it approaches the cost of a season ticket even for just a single peak round trip.  So in practise unregulated fares rise by a similar amount - also a good opportunity for TOCs to raise there fares and have the government take the rap, rather than raising them in the May or September windows.

This coming round it rather appears that the "inflation + 1%" may actually happen ... the rail minister Chris Heaton Harris told us 10 days ago (SWR Stakeholder conference) and previously about a month ago (GWR Stakeholder conference) that fare income for the future and ideas that need signing off ((different to the normal annual cycle)) are currently held by the Treasury's annual spending review, a process which stops decisions on a lot of work done with regard to changes to the future fare regime, and those decisions will be stopped until late November.   The theory is that the rail industry needs 8 weeks to implement changes in fare systems, so that there is little chance of anything except "inflation"+1% in January.  In practise the rail industry has shown (e.g. timetables) that it can change at much shorter notice if it needs/wants to badly enough.

The rail minister indicated an element of frustration that so much hard work done (carnet tickets, 3 day seasons, etc) in preparation for a changing metric was parked up just at the moment.  Conspiracy theorists might suggest that this is a very convenient thing for the government, who's long term political objectives have been to increase the proportion of rail income from the passenger, and this year with so much else going on and so many fewer people travelling can step fares in what they consider the right direction without the usual screams from people actually commuting each day - just a muted cry of pain this time as people are furloughed or working from home.

Adding a wider comment too.  The current fare system was overcomplex and in may ways outdated prior to the pandemic, and a great deal of work by the RDG and others was done in recent years to look for ways to make it fitter for future purpose (and that needs a definition of "purpose") with a requirement that a new system was to (overall) generate the same level of income.   Pressing the people doing the work, they were actually looking for th same average income per journey and not the same total income - in other words, a new system which brought a 25% growth in rail passenger numbers each of whom paid 25% less was NOT an acceptable outcome within their mandate.

Current talk in the micro is of bringing in fares which plug gaps (carnet, part time season) and complicate the system further, but in the macro is about simplifying the system.  No-one has yet explained to me how these two elements are compatible.   There is also a fear that "simplifying" the system is a sound-bite under which all manner of policies could be taken forward and miss the headlines.   For example,  if you have "Any time", "Off peak" and "Super off Peak" tickets and scrap one or two levels, which do you scrap?  Do you simply leave "Any Time" tickets as the only option, with the justification that changing metrics mean the peak has largely been flattened, or do you say that everything is now "Off Peak". 

Some footnotes:
1. TOCs cannot under EMA/ERMA set even unregulated fares at present - Govt approval of changes needed
2. Other measures such as the number of Advance tickets available can influence the average fare but I have seen no data on changes to availability bands and levels.  Some very odd effects from this method of selling advanced seats - e.g. where a service is seriously degraded due to engineering and partial bus replacement, the capacity and number of advance fares is likely be lower and so the average fare for a poorer service will rise.
3. "Annual fare rise of x%" refers to a basket of fares averaged out - individual fares may go up to a greater or lesser extent, both to even out the new fares to the nearest 10p and also to allow fare setters within a region / basket to make adjustments to even out anomalies or to load increases where they feel the market can best stand them.
4. Other terms change around tickets, quietly, too which can have a dramatic effect on the prices individual pay - the movement of the time at which "peak" ends for example, the removal of an old concession (Pewsey a couple of years back) or the moving of a train from 19:03 back to 18:56 off Paddington ... 

I think the point is that the Government/railways now have to confront a phenomenon that they have never anticipated or modelled - a significant, rapid and sustained reduction in demand.

They have largely always taken their market, and their customers for granted.

I'm not entirely convinced that an above inflation rise in prices is the most effective way to address that and get people back on board, although to be fair, with the changes in working patterns and practices which are emerging and becoming embedded, that ship may already have sailed.

The article could be referring to TfL fares which the Government has insisted are increased above the rate of inflation as part of the bail out package

TG's posts (and the reason I keep "liking" them!) deal with an important issue. Simply increasing fares by the "usual" amount this time around just because it is what always happens may not be good for future railway passenger numbers and revenue.

As we have seen from news reports, when lockdowns ease and/ot other countries start to allow UK residents back in, there tends to be a surge in airline bookings. This is what happens when reduced customer figures are caused by suppressed demand. I suspect the railway has very little suppressed demand by comparison, and a lot more reduced demand.

When demand is suppressed, all a transport operator has to do is say "Were open for business again" and their customers will come flocking back. Where demand is reduced that is not good enough, and steps need to ne taken to woo passengers back to the service. Charging them higher fares is unlikely to help with that quest.

I can understand the Treasurys rationale that they are seeking to recoup some of the subsidy they have been shovelling out to keep the railways running at all in the pandemic, but in the longer term they could find that  any action that results in a failure to increase passenger numbers may result in additional subsidy requirements in future years.

That's mostly not true. CPI is ideed the preferred official measure, but ONS have been working on alternatives (CPIH) to include owners' housing costs. As NSO put it, "the RPI is a legacy measure of UK inflation that continues to be published because of its use in long-term contracts and index-linked gilts." Among those contracts are a lot of company pensions (it's written into the trust deed for mine)  and rail franchises.

Until about ten years ago, RPI was simply cited in franchise agreements. Newer ones include a provision to replace by by something else, not specified, but only by mutual agreement. One big problem here is that rail pricing in national, so changing franchises one at a time isn't feasible. And in any case whatever happens will be put off until it all gets Williamsed.

As to the various claims about average fares, how do you average fares - and are we (or they) talking about the increase in average fares or the average of increases? There are a lot of possibilities, as you can look at fares paid or prices quoted, weighting by numbers bought or something else, dividing by distance or some other factor, and if no-one's looking (and you've been told what the headline has to be) you can sneak in a more imaginative method. Of course, no statistic given without its basis of calculation being known is worth much anyway.

Totally agree ... but no-ones going to loose their job for doing the usual thing, no-ones going to dies because of doing the usual thing, so why would anyone want to stick their neck out and authorise something different? "No one ever got fired for specifying IBM" after all.  Mind you, IBM station (yes, there was one!) has been mothballed.

No-one going to loose their own job for doing the usual thing. 

That might depend on how ypu define it.

I can think of a situation where an industry full of people were happily doing their own jobs, with both management and unions resistant to change, taking the attitude " we run things this way because we've always run things this way"

And then Ernie Marples and Richard Beeching came along...

.......indeed, I can think of a (not too dissimilar) situation where an industry full of people were happily doing their own jobs, with both management and unions resistant to change, taking the attitude " we run things this way because we've always run things this way"

..........and then COVID came along and an awful lot of people realised they didn't need to commute/travel for work or business any more.

Things are very different now though.

In the middle of the 20th century, most people agreed that private motoring was the future. But since the 1990's cities have been slowly squeezing cars out, and this process is likely to accelerate as the infrastructure that accommodated them crumbles and is not replaced. Urban motorways are a thing of the past.

New roads are still being built between cities though (astonishingly these schemes are almost universally and uncritically referred to as 'improvements'). But where do these roads lead? More and more, motorists will end up parking on the edge of town in a park-and-ride, completing their journey by public transport. More and more people will start to wonder if it is a good idea to invest a huge sum of money in 12 square metres of rapidly-depreciating bent tinwork that can't even take them where they want to go.

COVID-19 and the climate emergency will change lots of things. But people will still move around for business and pleasure, and in the medium to long term rail can play an increasingly important role in allowing them to do this. It will need to evolve, and it will need to re-learn what 'flexibility' is.

Just as energy is becoming more complex and localised, so is transport. Cars are not going to go away, but just as oil has lost its crown among energy sources so the motor car is losing its primacy as a form of transport as personal e-mobility, cycling and walking gain priority. COVID-19 is a setback for public transport, but one that it can largely recover from.

I doubt that many of us would seek to argue with what Red Squirrel has to say, but I?m not sure what the relevance of it is to the thread which is entitled: Big rise in rail fares the New Year

No matter what the general trend might be over the next 5 years or 10 years or 20 years, the average motorist will see at the moment marginally less traffic on the roads, and a lot more inner city parking space available as all-day parking requirements for commuters are minimal.

So right now, this minute, how do you think an above inflation increase in rail fares will go down with the motoring public, and what will they do to attract those people back to the railways?

I was responding to the suggestion that COVID-19 might lead to a re-emergence of the philosophy of Marples and Beeching. I don't think it will.

Of course above-inflation rises in rail fares are not going to help. The idea that passengers need to somehow repay the cost of keeping trains running during the pandemic is absurd; it's like doubling the price of a pint of beer next year to pay for furloughing bar staff.

How do we get people back on trains? Firstly we stop telling them not to catch trains. Once this crisis is over - and we could allow ourselves to hope that things might start to get better as soon as next spring - the railway will need to have a long hard think about how it can adjust to better reflect new travel patterns as these emerge. My biggest worry is that for decades the railway seems to have almost gone out of its way to make itself inflexible, with specific fixed-formation trains race-tuned for specific routes and flows. That may be the hardest nut to crack.