Today saw the release of July’s inflation figures, including a RPI rate of 3.8% and a CPI rate of 2.0%. The RPI rate, often with an extra 1% has been used in recent years to set the following year’s increase in rail fares for England & Wales. But rail campaigners are calling for change in approach.
“The Government will no doubt tell us in due course that it is only fair that if the cost of living is increasing the passenger should continue to pay their share. But this is missing the point. It isn’t the fare that determines how much passengers, overall, contribute to the railway – it is the fare multiplied by the number of passengers that matters” said Neil Middleton from the campaign group Railfuture. “At a time when there are so few captive passengers for the railway, with business meetings that can take place on Zoom, and ‘Work from Home’ as the routine, the reduction in demand from an increased price easily leads to an overall loss of revenue”.
We hear of talk for significant restructure of rail fares – promised many times, most recently in the Williams Shapps review, but no action to actually make it happen. At a time when public transport can so easily help us to achieve a low carbon life, it is disappointing that the “more of the same” approach seems to be seen as the low risk option. It isn’t – a new approach to rail fares can stimulate demand, increase revenue and reduce the burden to taxpayers.
Rail already struggles to demonstrate value at times – consider Newcastle to London tomorrow for a full day’s work. Key choices include:
- Train with flexibility: £310 (could be £325 next year)
- Train without flexibility: £251 (could be £263 next year)
- Drive £40.48 (petrol, parking at Stanmore Underground station and fare to central London)
Commuters will also see significant price increases – our table below shows price increases for commuters for next year assuming an inflationary increase of 4.8% is applied.
The temptation for travellers to choose alternatives is already high – each time that happens, the taxpayer steps in to make up that missed revenue.
It’s time for the Government to take action to actually do something about their words (“considering a variety of options”) – in order to ensure that:
1. Revenue for the railway increases by stopping a focus on just half the challenge – income per person matters a lot less than total revenue.
2. We are all encouraged towards to transport that’s more carbon efficient – LNER’s calculator shows CO2 emissions of 35.0kg for the train, and 144.9kg for the car (for the return journey).
A good first step would be to announce that the historic RPI + 1% habit has been retired and commit to a better choice – do not forget that the Office for Statistics Regulation de-designated RPI as a National Statistic 8 years ago.
If the Government is serious about revenue, not fares, and carbon efficiency, setting next year’s increase to zero would be a powerful message. Messages that say we don’t want it getting worse would include limiting it to the lower of CPI and the increase in fuel duty (if any).
Notes to editors:
Table of potential commuter fare rises & Inflation history (CPI vs RPI): https://railfuture.org.uk/tiki-download_file.php?fileId=2754
Inflation: https://www.ons.gov.uk/economy/inflationandpriceindices#timeseries & https://osr.statisticsauthority.gov.uk/publication/the-retail-prices-index/
2022 Rail fare calculated on an uplift from RPI (3.8%) + 1%
Train with Flexibility: Price on LNER website
Train without Flexibility: Price on LNER website for 05:59 to London (£125.50) and 17:30 to return (also £125.50) as at 09:48 on 18 August
https://www.gov.uk/government/statistical-data-sets/energy-and-environment-data-tables-env Table env0103, New Petrol Car Mileage = 49.2Mpg | https://theicct.org/news/EU-real-world-vehicle-fuel-consumption-gap-all-time-high (“Discrepancy between passenger vehicle type-approval test results and in-use fuel consumption and carbon dioxide (CO2) emissions at 42 per cent”; revised to 28.5Mpg | https://www.rac.co.uk/route-planner/mileage-calculator/, 541 miles return, Petrol 130.9p per gallon (Esso Flamstead, 16 August) | https://www.ncp.co.uk/find-a-car-park/car-parks/stanmore-stn-tfl/ | https://tfl.gov.uk/fares/find-fares/tube-and-rail-fares/single-fare-finder
CO2: https://www.lner.co.uk/tickets-savings/the-best-way-to-travel/our-commitment-to-the-environment/ Car adjusted for single person occupancy (a car cannot be occupied 1.6 times!)
Railfuture is the UK's leading independent organisation campaigning for better rail services for both passengers and freight.
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