To ask Her Majesty’s Government what assessment they have made of the report by Transport Focus Fairer fares: the future of rail commuting, published on 18 August 2020, in particular the recommendation to trial flexi-season tickets and other marketing initiatives to encourage rail travel as Covid-19 restrictions are lifted; and what discussions they have had with railway operators about conducting such trials.
My Lords, the Government welcome the Transport Focus report on the future of rail commuting post Covid. We are working closely with the industry on a range of initiatives to benefit the passenger, including looking at solutions that offer better value and convenience for those who commute flexibly.
My Lords, I am grateful to the Minister for that response, but to press her a little further, has the Department for Transport actually received proposals from the train operating companies to promote flexible fares to encourage passengers, including less frequent commuters, to return? Will the department allow any of the train operators which want to implement trials of such options to do so?
The Government proactively asked the train operating companies to come up with ideas for fares and other innovative passenger-led solutions as we come out of Covid. At the moment, we are building the evidence base to support the proposals—for example, on flexible season tickets—and assessing the potential commercial impact of these new products. How they are to be implemented will be published in due course.
My Lords, does the Minister agree that even before the pandemic, we were seeing big changes in working patterns? A growing proportion of the working population no longer expect to go to the workplace five days a week. Does she accept that the Government need to show more leadership here so that we can move on from ticketing systems that reflect the work patterns of the 1950s?
My Lords, I believe the Government are showing leadership on this issue, which is precisely why we proactively approached the train operating companies and made it absolutely clear to them that, going forward, we are going to see a very different type of train system—one that is really focused on the passenger and that provides punctual and reliable train services, but at a price that is fair to the taxpayer and the passenger.
My Lords, the Minister referred to the Government looking at a number of solutions. Will she indicate whether those solutions include enhanced ventilation systems and particle filtration—and, ideally, air disinfection protection measures—as part of the means to encourage people to use the trains in a safe manner?
The noble Baroness is quite right; the one thing we are going to have to do to get people back on to the railways—indeed, the public transport system as a whole—is to improve passenger confidence in the system. One way to do that is to be at the forefront of being able to provide the most up-to-date air filtration systems and secure the best enhanced cleaning contracts.
My Lords, noble Lords may have wonderful, imaginative ideas for playing around with fares, and there may indeed be a commercial case for flexible season tickets, but does my noble friend agree that the future of the railways is best secured if they maximise their own revenues and that the fundamental purpose of commuter fares and season tickets must therefore always be, as with airlines, to increase yields to the railways, thus saving expense for the taxpayer?
I somewhat agree with my noble friend in that, if this were being done in purely commercial terms, that would be the case, and we certainly want to minimise the amount of subsidy from the taxpayer where appropriate. However, the state might also want to intervene for other reasons and use pricing levers; for example, to encourage modal shift and get people out of their cars and on to the rail, particularly for certain types of journeys, and that might include commuting.
My Lords, the roads are congested and the trains are empty. Does the Minister accept that, as this report shows, passengers will return to the railways only if there is reform and modernisation of ticketing that offers better value for money? As the Government now control the railways, does she accept that the Government need a greater sense of urgency in this modernisation?
I am afraid the Government do not accept that. We are undertaking rail reform. As the noble Baroness will know, now is probably not the right time to do it, in the midst of a pandemic, but as the course of the pandemic becomes much clearer, we will continue to work, as we have done for quite a while now, with Keith Williams on his root and branch review. We remain in close contact with him and he fully supports the ERMAs we have put in recently. The noble Baroness also said that the roads are congested. I do not know whether she has been outside recently, but they are not.
My Lords, any trial flexi-season ticket system needs government approval before it can start. Can my noble friend say whether she is looking at a national scheme with common rules, to avoid complexity, or whether each individual franchise will develop its own scheme? Will she ensure that any new scheme will be contactless, in order to keep down costs and save time?
My noble friend is trying to push me a little further every time. I cannot say whether it will be a national scheme or whether we will have competitive schemes from different rail operators. Certainly, a national scheme would be simpler for the passenger, so each option will have advantages and disadvantages. We are looking at those at this time. Smart ticketing, which I think is the digital solution that my noble friend refers to, is at the heart of what we want to achieve. We really need to get to a stage where we do not have paper tickets; we must have smart ticketing systems that can cope with season tickets or, indeed, any ticket at all.
My Lords, in this part of mid-Wales, just about the only way for many people to get to Birmingham, Manchester or London is to take the beautiful Heart of Wales line, which then goes up to Manchester. The problem, as I see it, quite apart from the fact that you sometimes have to flag down the train or tell the driver when you want to get off—not an intercity problem—is that the fares and timetable are not always co-ordinated to allow an affordable way of commuting to these cities. Will the Government look at this when they are talking to the companies? Indeed, will they talk to their own people about how we could make this work better?
Train services and fares are, of course, devolved in Wales, but I recognise the noble Lord’s point about passengers who want to go from Wales to England for work, for example. I encourage him to raise this issue with Sir Peter Hendy in his union connectivity review, because it is really important for people who need to travel for employment reasons that the means of travel are there in terms of the services, but also that the fares fit as well.
First, how will the pending increase in fares encourage people back on to our trains, bearing in mind that much passenger business is optional leisure travel, and commuter traffic will become more price-sensitive as home working for at least part of the week is likely to become a permanent option for many? Secondly, if cheaper fare promotions are going to be used to encourage people back on to our trains, who, under the present contractual arrangements between the Government and the train operating companies, will have the final say on what those cheap fare promotions will be: the Government or the train operating companies?
The recent increase in fares was 2.6%, 1% below inflation. This is the lowest increase for four years. In addition, the Government delayed the increase by two months to 1 March. But it is case that taxpayers have been spectacularly generous to the railways in terms of support over the Covid period. We must ensure that there is a good balance between the taxpayer and the passenger, so we are content with a small increase in regulated rail fares. On the potential schemes and other measures that may be put in place, the Government will be working very closely with the train operating companies. All ideas are welcome, and when it is time to get people back on to public transport, we will put those in place.
My Lords, the recent pulling of the funding by the Government for Transport for the North’s scheme for smart ticketing across the north of England seems extraordinary in view of what the Minister has already said. Is this not a blow for the railway across the north of England and an indication that “levelling up” is no more than a slogan and has no substance? Will the Minister go away and get this reversed?
Not at all: TfN was allocated £150 million at the 2015 spending review for this integrated and smart travel programme. It was always the case that that funding was going to expire at the end of the current financial year. To date, TfN has managed to spend £24 million, and that is a good start, but we are now considering how best to deliver more effectively—and perhaps more quickly—a rollout of smart ticketing to improve passenger services across the north.
My Lords, the time allowed for this Question has elapsed and I apologise to the two noble Lords who were not able to be called.