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by GK Strategy 7th December, 2017
3 min read

Does the Government’s latest rail strategy offer a better deal for commuters?

This week, commuters across the country woke up to the news that their rail fares will rise again in January, this time by an average of 3.4%, the biggest increase in five years.

Regulated rail fares, which include most commuter season tickets and which represent about 40% of all fares, are set by Government. Unregulated rail fares, including first-class, advance purchase and tickets including a non-rail element, are set on a commercial basis by train operating companies. Regulated rail fares will be rising by 3.6% across the board from January, with this figure linked to the Retail Price Index measure of inflation for July of this year.

Passenger and commuter groups have greeted the news of yet another fare hike with dismay, which is hardly surprising.

BBC research last year suggested that commuters spend almost a tenth of their disposable income on rail season tickets, and this fare increase could add nearly £90 to the average season ticket next year. But we have now come to expect rail fare rises year-on-year, as a direct result of the policies of successive Governments. The last Labour Government’s policy was to start shifting the burden of paying for the railway from a 50-50 taxpayer-passenger split to passengers paying 75% of the cost of their journeys through annual fare increases of above inflation. The Coalition and Conservative Governments since then have kept fare increases at or above inflation every year.

This year’s rail fares announcement comes on the back of last week’s publication of the new DfT paper Connecting People: a strategic vision for rail, first mooted by Chris Grayling in a speech last December. It’s a wide-ranging document, laying out the current Government’s vision for rail to 2030 and beyond. The strategy has five key strands:

  1. Improving reliability
  2. Expansion of the network
  3. A better deal for passengers
  4. A modern workforce
  5. Rail as a productive and innovative economic sector

A better deal for passengers is likely to be of the greatest interest for passengers wondering about rail value for money following another fare rise.

In the short term, the Government’s plans to improve passenger experience comprise a number of already-announced initiatives, including smart ticketing, improved Wi-Fi and mobile connectivity, improvements to accessibility, better compensation arrangements when trains are delayed or cancelled, and an independent rail ombudsman to adjudicate complaints.

Longer-term, improvements to the network and more joined-up working between Network Rail and train operators should improve punctuality and increase capacity, making it easier to get a seat on the train to work in the morning and arrive in the office on time.

On fares, the rail strategy won’t offer much comfort to regular commuters.

Fares reform gets three paragraphs, with Government promising to work with industry to simplify fares structures and to extend the 16-25 Railcard discounts to 26-30 year olds, a discount that won’t be applicable to season tickets.

One bright spot is the mention of “alternative products” for part-time commuters in new rail franchises, but no more detail is forthcoming here as yet.

What worried commuters won’t see in the rail strategy is any indication that rail fares will come down in future. With wages continuing to stagnate, further annual fare increases on season tickets will inevitably face a rising public backlash.

It’s clear that more money is needed to pay for the better experience that passengers expect, as well as the network improvements necessary to deliver this, but the same passengers are less and less willing to pay for these improvements.

Something’s got to give, and Government needs to have a more open conversation with the travelling public on its vision for rail.

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