False Economy ran from 2010-2015. This site is no longer being updated, but the False Economy research team continue to report at Sentinel News.
Skip navigation

Blog

Rail fares rise shows public ownership is the only option for rail

From Touchstone and Action for Rail:

Rail fares are due to rise again in January 2015, with the rate to be announced on 19 August 2014 - that's today!

In this parliament fares have risen by 25%, two times faster than wages. Prices are set to go up by 3.6% on average across all regulated fares, which covers Off Peak, Anytime Day and most Season Tickets.

This represents a significant fare hike for passengers at a time when wage increases have fallen far behind, and train services are often overcrowded, run late and under staffed.

The fare rises are occurring while the rail industry itself is heavily dependent on taxpayer subsidy. Figures released by the Office for Rail Regulation show that in 2012/13 the rail industry received £4bn in public funds, while train companies made £172m in profits and paid out £204m in dividends to share holders.[1] If it weren’t for taxpayers footing the bill, the industry would be operating at a significant loss.

Action for Rail campaigners are at over 50 stations across the UK today calling for an affordable railway under public ownership (see full list and details of the day of action). Tuesday 19 August is the day that the inflation figure for July is announced. It’s used to set the price of fares for the next year.

Current government policy is for this to be set at RPI + 1%, yet last year was pegged to inflation (RPI) only, following a lot of public pressure, but still a significant real term increase in fares.

We have analysed the increase to the cost of season tickets for popular commuter routes in each region of the UK. For some examples of increases, a season ticket from Reading to London will increase by £147 to £4,235; Plymouth to Exeter St. David’s could rise by £111 to £3,203; while Stoke on Trent to Birmingham New Street could rise by £102 to £2,934 (see the table below for all of the new eye-watering prices). We have also set up a rail fare rise projector, which enables you to work out the increase in the cost of your ticket next year.

The East Coast Main Line, which was brought into public ownership following two failed private operators, has returned more to the public purse than it received, in total contrast to the rail industry as a whole. In 2013/14 it returned £216m to the Treasury and since 2009 has returned a figure of £1bn gross to the government; East Coast also enjoys very high passenger satisfaction rates. Despite this, the government is hell-bent on privatising it.

Through public ownership over £1bn could be saved, which could fund an 18 per cent reduction in fare prices.

The cumulative costs of privatisation include company profits, shareholder dividends and legal costs. Our research also shows that train companies only make about 1% genuine at risk investment in our railways. They don’t own the trains or track or stations, it’s passengers and taxpayers who are footing the bill and funding investment (see research by the Transport for Quality of Life team at the University of Manchester in their very comprehensive report – Rebuilding Rail).

The joint union Action for Rail campaign calls for public ownership of our railways; specifically for each franchise to be brought into public ownership as they expire.

Today, we are talking to passengers at stations throughout the UK, asking them to write to their MPs to highlight the issues of unaffordable fares and the need for public ownership. We have also have set up an online action for people to contact their MP, so please do take action!

Public ownership of our railways enjoys widespread support. Polls by YouGov and Survation and others over the past years illustrate this, with one YouGov poll in November 2013 finding that 66% of those surveyed were in favour of returning the railways to public ownership. Survation’s poll of key marginal seats in June 2014 revealed how public ownership of the railways is a key issue among marginal constituencies in the general election.

……………………
Notes
Please visit the Action for Rail site for more information and to take the online action: http://actionforrail.org

Estimates of season ticket price rises in 2015, based on RPI forecast at 2.6%



Region

From

To

Duration (mins)

Price 2014 season ticket

*Estimated price 2015 season ticket:

Increase in 2015

South East

Reading

London Paddington

35

£4,088

£4,235

£147

London

Bromley

London terminals

20

£1,628

£1,687

£59

East of England

Chelmsford

London Liverpool Street

35

£3,640

£3,771

£131

South West

Bath Spa

Bristol Temple Meads

15

£1,504

£1,558

£54

South West

Plymouth

Exeter St. David’s

60

£3,092

£3,203

£111

North East

Darlington

Newcastle

30

£2,248

£2,329

£81

West Midlands

Stoke-on-Trent

Birmingham New Street

50

£2,832

£2,934

£102

North West

Southport

Liverpool Central

45

£1,037

£1,074

£37

East Midlands

Leicester

Nottingham

35

£1,800

£1,865

£65

Yorkshire and the Humber

York

Leeds

25

£2,120

£2,196

£76

 

[1] Office for Rail Regulation (2014) GB rail industry financial information 2012-13: http://orr.gov.uk/publications/reports/gb-rail-industry-financial-information-2012-13

Comments

(Abusive or off-topic comments will be deleted)

Share

 


Play video: Why cuts are the wrong cure
VIDEO: Why cuts are the wrong cure