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My Lords, does the Minister agree that it is essential to have an RPI formula in order that the train operating companies do not have to try to forecast where inflation might be in several years’ time?
My Lords, does the Minister agree that it is essential to have an RPI formula in order that the train operating companies do not have to try to forecast where inflation might be in several years’ time?
My noble friend is right to raise this issue. The basis we currently use, as I have been clear, is RPI. It is important to provide certainty to the market not just for people using the services but, as he points out, for rail companies as well. As I have said, once we see the result of the consultation we will look at this.
My Lords, on this day last year your Lordships gave what is now the Cities and Local Government Devolution Act 2016 its Second Reading. That is the legislation that paved the way for the Bill before us today. My noble friend said that the overall aim of the Bill is...
My Lords, on this day last year your Lordships gave what is now the Cities and Local Government Devolution Act 2016 its Second Reading. That is the legislation that paved the way for the Bill before us today. My noble friend said that the overall aim of the Bill is...
My Lords, I was not referring to the real-time data—I think that would be highly desirable. My problem is with the data on historical passenger demand and so on.
My Lords, I was not referring to the real-time data—I think that would be highly desirable. My problem is with the data on historical passenger demand and so on.
To ask Her Majesty’s Government what is the projected average fare for HS2 at the commencement of the service from London to Birmingham, for the whole journey and per kilometre travelled.[HL477]
To ask Her Majesty’s Government what is the projected average fare for HS2 at the commencement of the service from London to Birmingham, for the whole journey and per kilometre travelled.[HL477]
The economic case for HS2 assumes that high speed fares are broadly comparable to classic fares.
My Lords, the most recent major study that included comparisons of the level of railway fares in Europe was published by Passenger Focus. It showed that, although the overall picture is mixed, Great Britain compares favourably with other European countries in respect of many ticket types, particularly on longer-distance tickets purchased in advance. The study compared some other factors, such as frequency of commuter services into major cities, in which Great Britain also compared favourably.
My Lords, the most recent major study that included comparisons of the level of railway fares in Europe was published by Passenger Focus. It showed that, although the overall picture is mixed, Great Britain compares favourably with other European countries in respect of many ticket types, particularly on longer-distance tickets purchased in advance. The study compared some other factors, such as frequency of commuter services into major cities, in which Great Britain also compared favourably.
To ask Her Majesty’s Government whether they have conducted any comparison of the level of railway fares in the United Kingdom compared with those in countries elsewhere in Europe.
My Lords, I agree that it must be difficult for ordinary passengers to understand how ticket pricing works. The increase in regulated fares is implemented by train operators as an average across a basket of fares. This flexibility allows some fares to be increased by up to 5%—although only 2% on Southern—more than the average, while other fares must increase by much less or even be held flat to comply with the regulated average.
My Lords, I agree that it must be difficult for ordinary passengers to understand how ticket pricing works. The increase in regulated fares is implemented by train operators as an average across a basket of fares. This flexibility allows some fares to be increased by up to 5%—although only 2% on Southern—more than the average, while other fares must increase by much less or even be held flat to comply with the regulated average.
Does the Minister agree that, although the fares are supposed to go up by RPI plus one, there are countless incidents of fares rising by much more than that—for example 9% from Sevenoaks to London. Will he ensure, and also ask his right honourable friend to ensure, that, when a cap is placed on fares, it is a cap that people can understand? The majority of people do not understand the way in which the fares baskets are compiled, which allows such breaches of common sense and of what is commonly understood.
My Lords, first, the relative prices of motoring and travelling by rail vary up and down. The comparison does vary. My right honourable friend the Secretary of State asked exactly the same question as the noble Lord about the timing of rail fare increases—and he was not amused.
My Lords, first, the relative prices of motoring and travelling by rail vary up and down. The comparison does vary. My right honourable friend the Secretary of State asked exactly the same question as the noble Lord about the timing of rail fare increases—and he was not amused.
Does the Minister agree that this largely synthetic row about rail fare increases takes place every year around new year, when there is not much bad news elsewhere? The British media love bad news, and it provides them with an annual story. Notwithstanding that, does the Minister agree with the figures that show that fares for travelling by train have increased in real terms by about 20% over the past decade, while the cost of motoring has reduced by 5% over that period? Are there not some inconsistencies here in government policy?
My Lords, I know how much my noble friend supports HS2. The business case for HS2 is not predicated on premium fares.
My Lords, I know how much my noble friend supports HS2. The business case for HS2 is not predicated on premium fares.
My Lords, will mortgages and savings accounts be available for those who wish to travel by HS2?
My Lords, a fare increase of 9% can arise where you have the RPI plus one, plus the flexibility that is necessary in order that train operating companies can adjust their fares to suit changing conditions. For instance, let us suppose there was a new shopping centre in an adjacent town. It might be desirable to adjust the pricing structure to reflect that. If there were no flexibility, train operators would not be able to adjust their price structure but would have to stick with an old system.
My Lords, a fare increase of 9% can arise where you have the RPI plus one, plus the flexibility that is necessary in order that train operating companies can adjust their fares to suit changing conditions. For instance, let us suppose there was a new shopping centre in an adjacent town. It might be desirable to adjust the pricing structure to reflect that. If there were no flexibility, train operators would not be able to adjust their price structure but would have to stick with an old system.
My Lords, I am surprised that the Minister takes a patronising attitude to what the public understand. The public understand fare increases quite clearly. The National Audit Office warned that if excessive fare increases occurred they would merely be reflected in higher profits for the train operating companies. The Prime Minister said that fares should not go up by more than 1% above inflation—in other words, 4.2%. How does the Minister justify fare increases of 9%?
My noble friend makes an important point. The Government recognise that, for those starting their employment career, being able to travel economically to work is important. My noble friend will be aware that a fares review is currently under way, looking at all aspects of the fares structure.
My noble friend makes an important point. The Government recognise that, for those starting their employment career, being able to travel economically to work is important. My noble friend will be aware that a fares review is currently under way, looking at all aspects of the fares structure.
My Lords, does the Minister realise that the main obstacle for many young people searching for employment is the cost of transport, especially since the discounted fares come in after 9.30 am and they might have to get to an interview by 9 am? Will the Minister take this up with the train operators, to see whether there might be more acceptable means of providing cheaper transport for young people?
The noble Lord asks a good question. Just walking up to Euston and buying a ticket is very expensive, and we do not compare well with our continental partners. However, when we look at advanced purchases, we compare quite well. One day, I wanted to go to the NEC to visit the motor show and I could not afford the walk-on fare; it was too expensive for me.
The noble Lord asks a good question. Just walking up to Euston and buying a ticket is very expensive, and we do not compare well with our continental partners. However, when we look at advanced purchases, we compare quite well. One day, I wanted to go to the NEC to visit the motor show and I could not afford the walk-on fare; it was too expensive for me.
My Lords, fares payable on the day of travel are invariably far more expensive than advance travel tickets. On what basis are the European comparisons that the Minister referred to being made: the former or the latter?
My Lords, this is largely a matter for the train operating companies. The difficulty for them is enforcing the quiet carriage rules. I like a quiet carriage, but some people do not adhere to the rules.
My Lords, this is largely a matter for the train operating companies. The difficulty for them is enforcing the quiet carriage rules. I like a quiet carriage, but some people do not adhere to the rules.
My Lords, on another item of major annoyance to rail users, will the Government encourage the installation of more quiet coaches on all long routes, to follow the excellent example of Virgin Trains, which bans mobile phones in the quiet coaches?
My Lords, I was not aware of that particular anomaly, but I hope that the fares review will look at that.
My Lords, I was not aware of that particular anomaly, but I hope that the fares review will look at that.
My Lords, the Minister is right to draw attention to the availability of advanced tickets, which represent decent value for money in the great majority of cases. Does he share my irritation when one discovers that it is cheaper to buy tickets for a journey by buying two or three tickets rather than a through ticket?
To ask Her Majesty’s Government whether they have conducted any comparison of the level of railway fares in the United Kingdom compared with those in countries elsewhere in Europe.
To ask Her Majesty’s Government whether they have conducted any comparison of the level of railway fares in the United Kingdom compared with those in countries elsewhere in Europe.
My Lords, the most recent major study that included comparisons of the level of railway fares in Europe was published by Passenger Focus. It showed that, although the overall picture is mixed, Great Britain compares favourably with other European countries in respect of many ticket types, particularly on longer-distance tickets purchased in advance. The study compared some other factors, such as frequency of commuter services into major cities, in which Great Britain also compared favourably.
To ask Her Majesty’s Government what steps they are taking to reduce the impact of rising rail fares for commuters.[HL4458]
To ask Her Majesty’s Government what steps they are taking to reduce the impact of rising rail fares for commuters.[HL4458]
The Department for Transport secured the funding to keep the increase in the cap on average regulated fares to RPI+1% for 2012, 2013 and 2014. We have committed, once savings are found and the improvement in the wider economic situation permits, to reducing and then abolishing above-inflation rises in average regulated fares.
Our Command Paper “Reforming Our Railways: Putting the Customer First” published in March 2012 sets out how we propose to reduce the cost of running the railway by £3.5 billion per annum by 2019.
To ask Her Majesty’s Government, further to the Written Answer by Earl Attlee on 18 December 2012 (WA 296), why there is a variation in individual train ticket prices when fare rises are limited to Retail Prices Index minus 1%.[HL4407]
To ask Her Majesty’s Government, further to the Written Answer by Earl Attlee on 18 December 2012 (WA 296), why there is a variation in individual train ticket prices when fare rises are limited to Retail Prices Index minus 1%.[HL4407]
Increases in regulated fares are not uniform. Train operators must ensure that the total value of each fares basket does not exceed the cumulative cap placed on the value of the basket by Government. This cap increases each year by a formula set out in franchise agreements with train operators. The formula is based on the Retail Price Index (RPI) as a measure of the cost of living: RPI+k where k is defined in the franchise agreement.
Since 2004, k has been plus 1% for the majority of train operators.
No individual fare in the basket may increase by more than 5% above the RPI+k average for the basket (or more than 2% for regulated fares set by Southern).
To ask Her Majesty’s Government, further to the Written Answer by Earl Attlee on 18 December 2012 (WA 296), whether they have any plans to make the process of fare baskets more transparent.[HL4408]
To ask Her Majesty’s Government, further to the Written Answer by Earl Attlee on 18 December 2012 (WA 296), whether they have any plans to make the process of fare baskets more transparent.[HL4408]
The Department for Transport is engaged in a full review of fares and ticketing and is considering the issue of transparency as part of that exercise.
To ask Her Majesty’s Government, further to the Written Answer by Earl Attlee on 18 December 2012 (WA 296), whether representatives of passenger interests are involved in the process for monitoring the make-up of fare baskets.[HL4409]
To ask Her Majesty’s Government, further to the Written Answer by Earl Attlee on 18 December 2012 (WA 296), whether representatives of passenger interests are involved in the process for monitoring the make-up of fare baskets.[HL4409]
Although passenger representatives are not directly involved in monitoring fares baskets, Department for Transport officials follow the principles of fares regulation as set out in the franchise agreement. These were based on the Strategic Rail Authority’s conclusions to its fares review of 2003, which took account of passengers’ interests.
Passenger Focus has an overarching role in looking after passengers’ interests.
My right honourable friend the Secretary of State for Transport (Patrick McLoughlin) has made the following Ministerial Statement.
I would today like to give an update on the situation in relation to franchised train operator London Midland (LM).
Passengers who use LM trains may be aware that the operator has been...
My right honourable friend the Secretary of State for Transport (Patrick McLoughlin) has made the following Ministerial Statement.
I would today like to give an update on the situation in relation to franchised train operator London Midland (LM).
Passengers who use LM trains may be aware that the operator has been...
To ask Her Majesty’s Government, further to the Written Answer by Earl Attlee on 6 December (WA 183), whether they retrospectively monitor the fare increase regulatory mechanisms; if so, for how long that has been the case; and whether the results of that monitoring are made public.[HL4049]
To ask Her Majesty’s Government, further to the Written Answer by Earl Attlee on 6 December (WA 183), whether they retrospectively monitor the fare increase regulatory mechanisms; if so, for how long that has been the case; and whether the results of that monitoring are made public.[HL4049]
The Department for Transport monitors fares baskets at each of the three annual fares setting rounds (January, May and September), after the train operating companies have set the fares. This allows time for any issues to be addressed before the fares are made available for sale. Such monitoring has taken place since 2004.
As stated in my earlier written response on 6 December, the checks on regulated fares are not made public because the contents of fares baskets are commercially confidential.