Certain rail fares are regulated by the Government. Those include season tickets and full-fare singles and returns in and around London and other major cities. Regulated fares are monitored to ensure that train operators comply with the limits set for those fares. Other fares are a matter for train operators.
Following that answer and the exchange between my hon. Friend the Member for Orkney and Shetland (Mr. Carmichael) and the Secretary of State, will the Minister tell us whether the Government are resisting pressures from rail operators to reduce the times when saver tickets are available?
The Government, along with the rail industry, are looking into a new structure to make fares on the railways much more sensible and easy to understand. However, the hon. Gentleman will understand that regulated fares—the fares that most people travel on—are actually 2 per cent. cheaper today in real terms than they were 10 years ago.
Does my hon. Friend realise that fares on the rail system from Tamworth to London have gone up remarkably in the past three years? Does he believe that it is due to the near monopoly of Virgin Trains on that line and does he believe that having more operators on it would provide more competition and reduce fares? How can we make that possible?
I am not aware of the details of my hon. Friend’s question, but I would be happy to look into them. However, I repeat my earlier point that regulated fares—most commuters and rail passengers travel on either discounted or regulated fares—are actually 2 per cent. cheaper in real terms than they were 10 years ago. My hon. Friend will understand that if we were to extend the regulation of rail fares, it would mean an increase in subsidy from the public purse. That would mean a consequent reduction in the amount of public money available for other services.
Well, I think that we have just heard the death knell of the saver ticket. When the Department signed the latest round of franchise agreements, were Ministers aware that commitments to increase premium payments to the Government were based on an assumption of sharp increases in unregulated train fares?
The amount of premiums that any rail company wishes to pay to the Department for Transport is a matter for that company at the bidding stage of any new franchise. The fares increased by South West Trains in the past few weeks are not regulated fares. The Government have no plans to extend their regulation and I am not aware that the hon. Gentleman has a policy to do so either.
Do not Ministers check the financial assumptions in the agreements that they sign? The Secretary of State is always telling us that there are only two sources of funds for the rail industry—the taxpayer and the passenger. Is the Minister honestly telling the House that Ministers did not realise that when they signed up to the increased premiums, they were also signing up to deals that would mean big fare increases? If he is saying that, I think that people will not believe him.
Franchises are let on a competitive basis and each train operating company is entitled to put forward its own proposals for the franchise over whatever period it will cover. Regulated fares are limited to a 1 per cent. increase over inflation in any one year, but unregulated fares are not subject to that kind of limit. If the hon. Gentleman is suggesting that the Government should regulate those fares, I would be very interested to hear the details of that proposal.
Has my hon. Friend made careful comparisons between fare levels on continental state-owned railways and those on our privatised railways? If so, has he drawn any obvious conclusions?
My hon. Friend makes an interesting point, but I have to say that the difference between British and European fares is very often exaggerated. He will be aware that the level of general taxation in this country is significantly less than that on the continent. The prices that passengers pay per kilometre in most European countries are very comparable to those in this country.