Fare Rise January 2021

[scotrail158713]

Any thoughts on this? I suppose it’s a kick in the teeth for passengers to have been told “don’t travel unless it’s necessary” and then have a fare rise after they return to travelling. However after such low revenue for TOCs for months, I suppose an increase helps to try and offset that. (Although you could argue that some TOCs messaging maybe means that there are some companies less deserving of support than others)
One encouragement is the realisation that flexible ticketing will be more necessary, and useful in the future, and season tickets will be required less and less.

Rail fares to rise 1.6% in January despite passenger slump

Passenger groups want fares overhaul after numbers collapse in lockdown. Scotland is delaying rises.

www.bbc.co.uk

Railway season ticket holders and commuters will see a 1.6% rise in fares from January in spite of a slump in passenger demand.

About half of rail fares are pegged to July's Retail Price Index, which defied economists' forecasts and rose from 1.1% a month ago, the Office for National Statistics (ONS) said.

Passenger groups said an overhaul of the fares system was needed.

UK consumer price inflation also rose, to 1% in July from 0.6% in June.

Passenger watchdog Transport Focus chief executive Anthony Smith said a system that fits "the way we live and travel now" is needed, and not "season tickets designed for city gents in the last century".

Robert Nisbet, of the Rail Delivery Group, which represents the train operating companies, told the BBC's Today programme that the government is ultimately in charge of the price increases and that the industry would like broader reform of fares to make flexible travel easier.

The rail rise compares to 2.8% last year and is the lowest since 2015, which means a smaller price increase for travellers than last year.

But according to the figures from the government's Office of Rail and Road, passenger numbers covering January to March fell 11.4% compared to the prior year.

Passenger slump
Those figures only partially cover the scale of the drop in rail journeys taken, as travel restrictions only started on 16 March and lockdown on 23 March.

Figures for April to June, due out in October, are likely to be much starker.

Using RPI to manage rail fares has faced criticism for some time. The ONS dumped the measure as a national statistic, favouring consumer price inflation (CPI), which is usually lower.

The UK Statistics Authority recommended in 2019 that the publication of the RPI should be stopped and that, in the meantime, it should use the same data sources used to calculate CPIH, an inflation measure that includes some housing costs.

The UK Statistics Authority and the Treasury are consulting on how to fix RPI.

The ONS monitors the prices of a selection of goods and services commonly bought by British households. In CPI terms, what cost £100 last year should cost £101 today.

 

[Islineclear3_1]

2021 fare rises should be suspended in my view

Many train companies have alienated their passengers with their incessent "Do Not Travel" mantras and made things difficult for those who have to travel

The least they can do now is to provide concessionary/discounted travel to entice people back to the railway.

 

[squizzler]

Who else thinks this will be the next humiliating U-turn to be made by HM Government?

It seems so obvious that the usual fares rise was not going to fly. It is incredible that even as incompetent a government as this one managed to miss this opportunity to get on the front foot by cancelling the rises, even if not managing a pro-active response like the proposed "head out to help out" campaign.

 

[SAPhil]

What annoys me is that the increases are still based on the allegedly discredited RPI while most income is now based on the lower CPI. It's long overdue for the Government to use the same index for everything.

 

[mikeg]

Well the Times, unfortunately behind a pay wall is reporting that ministers are 'refusing to commit to' a 1.6% rise..

 

[JonathanH]

The BBC story is, in effect, only reporting that the July RPI is 1.6%. It isn't reporting government direction to increase fares in this way, just assuming that will be the case. Because of regulation, all we know is that 1.6% is the maximum increase in the fares. The decision about the actual changes in fares isn't made at this stage.

I note that the piece quoted includes another opportunity for RDG's spokesman to peddle their line about fares reforms which could potentially have the effect of removing this regulatory cap.

The much greater damage in terms of fare increases comes on unregulated fares, or changing of restrictions, for example the removal of 'via Oxford' fares from Banbury to London that we discussed on this forum last week. The increase there is much more than 1.6% and is really where the ire should be aimed.

 

[GRALISTAIR]

Needs an increase in Fuel Duty if we are being fair. Rail fares rising but fuel duty frozen is crazy in a net zero carbon world.

 

[Islineclear3_1]

Needs an increase in Fuel Duty if we are being fair. Rail fares rising but fuel duty frozen is crazy in a net zero carbon world.

We do not need an increase in fuel duty.

If the railways don't want our business, people have to use their cars and that is the last thing they need

 

[Mintona]

I’m bemused by anybody that thinks the ‘do not travel’ advice came from the TOCs. They’re all being run by the DfT, that messaging has come straight from there. The railways would love nothing more than to have trains full of people again.

 

[LNW-GW Joint]

What annoys me is that the increases are still based on the allegedly discredited RPI while most income is now based on the lower CPI. It's long overdue for the Government to use the same index for everything.

Bear in mind that the automatic formula (set by Labour, by the way) is RPI+1% (and RPI+2% in some special cases where there has been major investment).
Recently, rises have generally been capped at RPI after intervention, and Scotland and Wales have had an RPI rule since rail devolution.
Though having said that, Wales (TfW) had a different set of rules last time which actually reduced some fares, and more fare cuts are supposed to be in the pipeline.

Two things:
- DfT has 4 months to find a new algorithm agreeable to the Treasury, much like DfE had a similar time to sort out this year's exam results, but failed dismally.
- And events at TfL show that ignoring inflation will catch you out eventually, with rising costs and a stagnant fare box, giving dire consequences for the funding of the service. TfL has effectively lost control of its operation to DfT, in return for a bailout to cater for the Mayor's fares freeze and then the Covid downturn in usage.

 

[Howardh]

There needs to be a national campaign to get passengers back on the rails, and to that end those pax need a full timetable, facilities fully open and maybe some incentives. Dunno what those incentives could be - in the past daily and local newspapers have carried vouchers and such like, maybe something along those lines?

 

[GRALISTAIR]

And events at TfL show that ignoring inflation will catch you out eventually, with rising costs and a stagnant fare box, giving dire consequences for the funding of the service.

Agreed - great for a political headline grabber but in the real world not so good.

 

[Peter Mugridge]

These increases are the DfT, the Treasury and the railway collectively not so much shooting themselves in the foot as machine gunning themselves all over.

 

[Andyh82]

Any thoughts on this? I suppose it’s a kick in the teeth for passengers to have been told “don’t travel unless it’s necessary” and then have a fare rise after they return to travelling. However after such low revenue for TOCs for months, I suppose an increase helps to try and offset that. (Although you could argue that some TOCs messaging maybe means that there are some companies less deserving of support than others)
One encouragement is the realisation that flexible ticketing will be more necessary, and useful in the future, and season tickets will be required less and less.

Rail fares to rise 1.6% in January despite passenger slump

Passenger groups want fares overhaul after numbers collapse in lockdown. Scotland is delaying rises.

www.bbc.co.uk

I don’t suggest reading the comments

Although some are a good example of how people don’t understand how the railways work

 

[Sean Davidson]

One way to annoy everyone, still, the European train companies that operate in the UK will have even more money to subsidize their European operations.

 

[221129]

There needs to be a national campaign to get passengers back on the rails, and to that end those pax need a full timetable, facilities fully open and maybe some incentives. Dunno what those incentives could be - in the past daily and local newspapers have carried vouchers and such like, maybe something along those lines?

I'm not convinced. Once most/all restrictions have eased and we are back to a full timetable and the leisure industry fully open again I don't think passenger numbers will be as low as a lot of people on here think. I see it daily and at least the trains I deal with are getting busier and busier as time goes on.

 

[Howardh]

I'm not convinced. Once most/all restrictions have eased and we are back to a full timetable and the leisure industry fully open again I don't think passenger numbers will be as low as a lot of people on here think. I see it daily and at least the trains I deal with are getting busier and busier as time goes on.

BiB - we're not, and it isn't. OK, the timetable's getting there, bus still no late evening services on many routes. As for the latter - walking round London; some pubs only opened at 4pm, some cafes were obviously closed, you can't yet go for a swim or sauna (so Oasis near Tottenham Court Road was out), go to a sports event such as cricket or football so although it's far better than the early days of release, we aren't there yet.

 

[221129]

BiB - we're not, and it isn't. OK, the timetable's getting there, bus still no late evening services on many routes. As for the latter - walking round London; some pubs only opened at 4pm, some cafes were obviously closed, you can't yet go for a swim or sauna (so Oasis near Tottenham Court Road was out), go to a sports event such as cricket or football so although it's far better than the early days of release, we aren't there yet.

Read what I said. I know we are not there yet, however the trains I deal with are getting busier and busier. Everyone saying that the railways will need to essentially beg people to come back I think are over estimating how badly the passenger numbers will be.

 

[scotrail158713]

I’m bemused by anybody that thinks the ‘do not travel’ advice came from the TOCs. They’re all being run by the DfT, that messaging has come straight from there. The railways would love nothing more than to have trains full of people again.

But long after government advice changed away from “do not travel” their were still Scotrail, Northern, TFW certain TOCs persisting with this message.

I don’t suggest reading the comments

Although some are a good example of how people don’t understand how the railways work

Yep
I was reading it on the app so thankfully didn’t have access to the comments. I don’t think I want to go near it either.

 

[Howardh]

Read what I said. I know we are not there yet, however the trains I deal with are getting busier and busier. Everyone saying that the railways will need to essentially beg people to come back I think are over estimating how badly the passenger numbers will be.

Yes, sorry, jumped in there a bit!!

 

[221129]

Although saying that, the biggest issue in term of passenger numbers will be the commuters.

 

[matt_world2004]

I’m bemused by anybody that thinks the ‘do not travel’ advice came from the TOCs. They’re all being run by the DfT, that messaging has come straight from there. The railways would love nothing more than to have trains full of people again.

No they wouldn't. The tocs still get paid under the emergency measures even if there was no one on their trains. Passengers are just an

 

[Ianno87]

No they wouldn't. The tocs still get paid under the emergency measures even if there was no one on their trains. Passengers are just an

The DfT were apparently quite hot on keeping tabs on TOC messaging (on websites etc.) being suitably strong.

I think TOCs were paid operational costs as they stood in March (plus 2% fee), so *in theory* they would have taken some extra profit from "unnecessary" travel.

 

[Mcr Warrior]

Certainly seems to be a debatable point as to whether it has effectively been less hassle for the TOCs to be carting fresh air around whilst the Emergency Measures Agreements have been in place; those Open Access operators who weren't in receipt of such funding do seem to have promptly shut up shop.

Interesting to hear arguments either way on this, particularly from those forum members who have an industry-insider's point of view.

 

[matt_world2004]

Certainly seems to be a debatable point as to whether it has effectively been less hassle for the TOCs to be carting fresh air around whilst the Emergency Measures Agreements have been in place; those Open Access operators who weren't in receipt of such funding do seem to have promptly shut up shop.

Interesting to hear arguments either way on this, particularly from those forum members who have an industry-insider's point of view.

PPM improved hugely during the lockdown as the reduced timetable, and less dwell time (caused by less passengers) allowed greater service reliability

 

[LNW-GW Joint]

No they wouldn't. The tocs still get paid under the emergency measures even if there was no one on their trains.

The EMA I have read (WMT) requires the TOC to be just as diligent in collecting fares and maximising revenue remitted to the DfT as normal.
They are not supposed to allow a free-for-all just because the government is bankrolling the scheme.

 

[matt_world2004]

The EMA I have read (WMT) requires the TOC to be just as diligent in collecting fares and maximising revenue remitted to the DfT as normal.
They are not supposed to allow a free-for-all just because the government is bankrolling the scheme.

So what financial incentives are there in the contract for the TOC to increase demand for their services. I interpret the the dilligence in collecting fares to be a policy to minimise ticketless travel

The messaging that services should be used by essential workers only went fare beyond what was required during the height of the lockdown.

 

[Paul Kelly]

What annoys me is that the increases are still based on the allegedly discredited RPI while most income is now based on the lower CPI. It's long overdue for the Government to use the same index for everything.

People always bring this up when this subject is mentioned but I am very skeptical. My feeling is that it is only "discredited" in the sense that a lower value (which the CPI always is) looks better because the general public don't realise the extent to which the value of their money is being constantly eroded. My (admittedly very superficial) understanding is that whereas the RPI would continuously compare the price of say, a pair of hand-made shoes over many years, the CPI would come in and say no, the typical consumer can no longer afford those and would trade down to cheaper factory-made shoes, so we'll substitute them and that (and other similar substitutions over the years) has the effect of the CPI making it look like the purchasing power of money is being eroded at a lesser rate than it really is. I have probably grossly oversimplified things there and may have got it a bit wrong.

 

[Haywain]

So what financial incentives are there in the contract for the TOC to increase demand for their services.

You should probably look at what the majority of TOCs are doing to increase demand and draw your own conclusions.

 

[Horizon22]

There aren't really that many options as the maths don't add up so either:
a) The government (taxpayers) takes up more of the costs of running the railway; they sort of already are and its apparently unsustainable
b) Increase the money received by farepayers; getting commuters back (hard), flexible seasons, re-balancing towards leisure travellers and fare rises,
c) Decrease the costs of the railway; service and staffing cuts.

None I imagine are particularly palatable to this government and with social distancing are between a rock and a hard place.