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Railways: Fare Structures

Volume 807: debated on Tuesday 17 November 2020


Asked by

To ask Her Majesty’s Government what plans they have to amend their policies on rail fare structures.

My Lords, the Government are considering how we can modernise our fares and ticketing offer to develop more convenient and better-value options for everyone. However, our immediate focus must be on ensuring that we keep the railway available and safe for those who rely on it.

The rail industry has made many proposals to the Government on the reform of fares structures to better reflect current market conditions. When will the Government make some of these decisions?

The noble Lord is quite right. Indeed, the Government proactively approached the train-operating companies for proposals on how we can make our fares and ticketing system better for consumers. We have received a number of proposals over the summer and are considering them.

My Lords, it is apparent that the Treasury will insist on an inflation-plus increase in rail fares next year. Does the Minister feel that such a policy will attract passengers back to the rail system following the pandemic? Is it not more likely that, given the continuation of the 11-year freeze on fuel duty, more motorists will take to the roads, causing even more congestion and pollution in future?

The Government are considering plans for any increase in regulated rail fares. The taxpayer has provided huge support to train services during the pandemic; passengers must also contribute to maintaining and improving the service, and any fare rises will fund crucial investment.

My Lords, will the Minister tell us whether the rumours are true that next year’s fare increase will not just be RPI, at 1.6%, but RPI plus 1%, so a 2.6% increase? Is that being considered by the Government, and does the Minister accept that rail passengers in Britain already pay fares that are very much higher than in the rest of Europe and really should not be expected, at this difficult time, to carry an extra burden?

I am sure that the noble Baroness will understand that I could not possibly comment on rumours, but I refer her to the answer that I just gave to the noble Lord, Lord Snape, about the Government’s plans for any increase in regulated rail fares.

My Lords, public transport must provide sufficient capacity to meet demand in peak periods and so has excess capacity at other times of the day. If public transport is to maximise its own fares revenue and avoid dependency on the taxpayer, does my noble friend the Minister agree that operators should be allowed to offer a broad and flexible range of non-regulated fares so as to recognise variations in demand, and that a move to a rigid and simple fares regime is likely to force unnecessary increases in many fares?

My Lords, fares revenue remains a core component of funding for the railways, and I agree that it is important that train operators manage their businesses in line with taxpayers’ interests. Any proposals for changes to fare structures will, of course, be discussed with train-operating companies to ensure that they deliver for both passengers and taxpayers.

My Lords, now is the opportunity to reset the balance and give rail passengers better value for money. Can the Minister tell us whether the Government will look into the pricing of unregulated short journey tickets that increase yearly at a higher rate than longer journeys, leaving passengers paying more over time than they should?

I refer the noble Lord, Lord Loomba, to my previous response to my noble friend Lord Moylan. However, the Government are very clear that we want punctual and reliable train services, and at a price that is fair to the taxpayer and to the passenger.

In August, the Government provided the money to enable people to have cut-price meals, to help restaurants and similar establishments recover from the loss of business as a result of Covid-19 by getting people to eat out again. Do the Government have any similar plans for enabling people to travel at half price, or a significant discount, on our railways for a period of time, as a means of encouraging people to travel by train again after the end of the current lockdown?

The noble Lord must be reading our minds. Of course, there will be man things that we might want to consider doing once the course of the pandemic is clear and we have come out the other side, and once there are no restrictions on people’s travel. It may be that we introduce certain incentives, because we all know that the best way to travel is on public transport.

My Lords, the Minister is being uncharacteristically coy in her answer to all these questions and saying nothing at all. She did say that the railways at the moment must be available and safe. They are available and are extremely safe, but the danger is that when the Covid emergency comes to an end, people will not go back to them. Can she tell us what the Government’s plans are and what they are thinking about in order to get people back on trains once it is possible for everyone to go on them?

I am not sure I have been called “uncharacteristically coy” before. However, the noble Lord is absolutely right: we are in a situation at the moment where people’s habits may change, which means they may form the habit of not using public transport. This is the same for trains, light rail and buses, across our public transport system. Of course, the Government are thinking very clearly and hard about the sorts of mechanisms that we can use, whether that be marketing campaigns or incentives, as I outlined to the noble Lord, Lord Rosser. We will consider all of these things. However, now is not the right time for that; now is the time to follow the November restrictions to make sure that we keep the virus under control.

This is an area where I can help the Government. At the moment, rail fares have been going up, year on year, often above normal increases, but at the same time, since 2011, people driving have paid less and less. So the cost of driving on our roads falls because there is no more fuel duty, yet the cost of rail travel keeps rising. One way to make the railways competitive with driving again would be to reinstate fuel duty at a realistic level.

I thank the noble Baroness for her advice; I am sure the Treasury is listening. As I said to the noble Lord, Lord Snape, earlier, we are considering plans for rail fares in the future, but we are working very hard on how to modernise our ticketing offer such that rail travel is as affordable as we can possibly make it.

My Lords, one of the challenges facing the railways is to spread the morning peak; reduced fares kick in after about 9 am. Would my noble friend consider reductions for journeys that begin before, say, 7 am, to spread the peak earlier as well as later?

I thank my noble friend for that suggestion and I will make sure that the department looks at it. However, one thing that I discovered in my work with TfL is that the morning peak is now shockingly early and seems to start at about 5.30 am.

My Lords, commuters on the west coast main line have been jammed in like sardines for years—never an appealing prospect, and even less so in the time of Covid. As well as flexibility on pricing, do we not also need to look at increasing capacity on our railways if we are to tempt people back to rail use?

The noble Lord is of course completely right. That is why the Government are investing £48 billion over control period 6, not only to maintain our railways but to enhance them and to increase capacity.

We have a few minutes, so we will try the noble Lord, Lord Berkeley, again. No, he is not there. In that case, the time allowed for this Question has elapsed. We now come to the fourth Oral Question.