Friday, 4 January 2013

The Great Rail Rip-Off

How do you ease pressure on over-crowded rail services? Simple, you make tickets so expensive that folks can’t afford them. It may seem facile and potentially self-defeating, but that was the sledgehammer government solution suspected by the House of Commons Transport Committee, and they should know. Labour MP and Committee Chairman Louise Ellman today cautioned against “ramping up fares” to regulate demand at peak times, as the government ponders over a menu of potential options in the wake of Sir Roy McNulty’s recent report into rail costs.

In fact, it seems the only factor making UK petrol prices feel even remotely reasonable, is the comparative cost of rail travel. Commuters careering cheerfully towards ticket machines this week, eagerly anticipating a return to work after the Christmas festivities, are already facing fare increases of up to 9.2%, according to Shadow Transport Minister Maria Eagle.

But those blinking blearily at their soaring seat prices should perhaps be partially grateful. The government were set to allow train companies price rises in regulated fares of 6.2%, but relented at the last, capping the increase at 4.2%. Cold comfort perhaps for those condemned to standing room only, gazing into someone else’s armpit, and paying steadily more for the daily privilege. In addition, the cap only covers the so-called “regulated fares”, leaving rail companies free to cash in on other unsuspecting customers.

The above inflation formula of Retail Price Index +1% has been used to set the rise in most rail fares since 2004, meaning commuter’s costs increasing by 54% in 10 years. The Campaign for Better Transport equates this to a fare rise of more than 20% above wage increases, and have initiated an on-line petition, calling on the government to end above inflation increments.

Perhaps the West Coast Main Line palaver perfectly illustrated the pitfalls of privatised rail provision. Virgin lost the franchise in favour of a First Group offer, which, whilst tantalisingly tempting to a cash-strapped treasury, seemed ever destined to become too good to be true, right up until it was. To add sodium to the sore, Virgin will now need reimbursing for their bid in a franchise process that appears decidedly dodgy. If it didn’t work for the East Coast Mainline, why would a few hundred miles make any discernable difference?  

Personally, I fail to see the fun in paying £6 billion in subsidies to rail companies who will have to satisfy shareholders, pay undeserved bonuses, and are patently aware that if the whole sorry shambles comes crashing round their ears, the taxpayer will pick up the tab. If they ask me, public ownership is the only responsible platform for running public services, but it’s reassuringly unlikely they will.

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