Conservative rail fare "freeze" election statement

[Taunton]

I see the headlines for this initiative announced today is "Rail Fare Freeze"

http://www.bbc.co.uk/news/election-2015-32245068

The Conservatives have said regulated rail fares in England would rise by no more than inflation if they win the election.

They said the move - extending the policy for 2014 and 2015 - would save an average rail commuter £400 by 2020.

The Lib Dems said they had fought in government to keep rail fares down while the Tories "repeatedly argued" for above-inflation increases.

Labour called the pledge "unfunded, uncosted and... totally unbelievable".

The pledge would affect regulated fares, which cover about half of all tickets sold including season tickets and day returns.

A restriction limiting rises in these fares to RPI (retail prices index) inflation has been in place for the past two years under the coalition government.

Between 2004 and 2013, regulated fares rose by an average of RPI plus 1% annually, in an attempt to reduce taxpayer subsidies to the industry.

In 2014 and 2015 the government limited the increase to RPI only. In January, regulated rail fares in England increased by 2.2%

Reading down, it however seems that it is not a freeze but keeping them in line with inflation.

Further on, it only applies to regulated fares, which progressively seem to cover less and less of journeys as TOCs become adept at pushing unregulated fares and restricting trains that regulated tickets are permitted on.

It presumably also does not cover rail within London, a non-inconsiderable percentage of the total, where fares on Oyster have rocketed way beyond inflation in recent years.

I've never been clear how these variations in the increase allowed work through to TOC revenue, or not, on established franchises. Is there a formula that adjusts government subsidy dependent on what increase they allow, or not.

 

[LNW-GW Joint]

I've never been clear how these variations in the increase allowed work through to TOC revenue, or not, on established franchises. Is there a formula that adjusts government subsidy dependent on what increase they allow, or not.

There is. The extra revenue goes to the government.
But the cost side will also have to be taken into account, so a complex mix really.
It's possible the newer franchise agreements factor it in directly, but I'm not sure.

 

[westv]

My peak time Monday morning Hull Train's AP fare has gone up 300% since early 2014! Played havoc with my budgetting.

 

[Tetchytyke]

It really only makes a difference to Home Counties commuters- so long as they don't have a Travelcard season ticket. And even then it's not a freeze, given that RPI is still higher than wage inflation for many people.

It sounds great but doesn't really mean anything.

 

[Taunton]

I see since the original posting that the BBC have changed their story headline from "freeze" to "inflation pledge".

My peak time Monday morning Hull Train's AP fare has gone up 300% since early 2014!

I presume Hull Trains don't have any regulated fares at all.

 

[yorksrob]

Indeed. I wonder what effect this will have on the avowed DfT policy of reducing the discrepancy between PTE and other fares (i.e. raising PTE fares) in the rest of the country.

In truth, the coalition has had a pretty decent record in terms of the railway (particularly in the context of New Labour's pretty rubbish performance on the subject over the majority of their time in office). Not enough to make me forget various other policy iniquities though.

 

[MikeWh]

where fares on Oyster have rocketed way beyond inflation in recent years.

Can you substantiate that claim. In my experience, fares on Oyster have risen at a similar or lower rate to other fares in the South East. I don't count the abolition of the off-peak cap as a fares increase per-se as that only affects a (decreasingly) small proportion of travellers.

 

[Xenophon PCDGS]

Is the response from the Labour Party that is stated one that they would normally make (Unfunded, Uncosted, etc ,etc), irrespective of whatever matter had been put forward or do the Labour Party actually want the price rises to be much greater than the inflation level. How do the Labour Party reach the view that these proposals are uncosted? Have they been privy to such meetings where the actual costs of the matter in hand were in discussion?

It is bad enough having to read such political responses at the best of times but when it comes with a time period so near to the General Election, such petulant responses can and do look utterly trite and puerile.

 

[pemma]

Lib Dems have given a similar response to what they gave Gordon Brown's pledges for the last election, in that if it's such a good idea why did you implement it during the last parliament.
--- old post above --- --- new post below ---

In truth, the coalition has had a pretty decent record in terms of the railway (particularly in the context of New Labour's pretty rubbish performance on the subject over the majority of their time in office). Not enough to make me forget various other policy iniquities though.

To date have they delivered a single mile of usable electrification ignoring electrification on lines proposed by Lord Adonis under the previous government which the Coalition then delayed as part of their spending review?

Yes I know the SRA made bad decisions with Northern and TPE in particular but the current DfT extending both franchises twice without significant improvements to the terms.

 

[DeeGee]

No more than the rate of inflation?

And if inflation is negative? Will regulated fares go down? I reckon not.

 

[pemma]

No more than the rate of inflation?

And if inflation is negative? Will regulated fares go down? I reckon not.

When Labour introduced the revised student loans in 1998 they said the interest rate would adjust with inflation so the amount students borrowed was relative to the amount paid back later in life as graduates.

However, when the recession occurred the prospect of negative interest on student loans was mooted. The Coalition were quick to say the interest rate would never be below 0%.

 

[Simon11]

There is. The extra revenue goes to the government.
But the cost side will also have to be taken into account, so a complex mix really.
It's possible the newer franchise agreements factor it in directly, but I'm not sure.

I'm sorry but this is incorrect (note this may not apply to all). TOC's will not miss out, it will be the government which will end up paying the difference. In fact, they have yet to settle with an agreement with a few TOC's for changing the RPI + X in the last few years! Note that there will be the additional costs while DfT & TOC's agree an amount that is due to the TOC's- this could easily cost a six figure sum. This isn't the TOC's fault, it due to the government changing their agreement in the contract and not having this set out correctly. Now if Labour come into power, even the recent TOC's franchise give out will be claiming the difference.

To back this up, in the Evening Standard today, it says in the Business section "But there's another reason train operators shares didn't move: under the terms of their franchise agreements, any big cuts to their regulated ticket prices is simply made up by reduced franchise payments, the money train companies pay the exchequer for their contracts." This is slightly incorrect, as payments haven't been agreed yet.

 

[anme]

Is the response from the Labour Party that is stated one that they would normally make (Unfunded, Uncosted, etc ,etc), irrespective of whatever matter had been put forward or do the Labour Party actually want the price rises to be much greater than the inflation level. How do the Labour Party reach the view that these proposals are uncosted? Have they been privy to such meetings where the actual costs of the matter in hand were in discussion?

A fair point to some degree, but following that logic we can't say that *any* proposal is uncosted, whatever nonsense UKIP and the like put in their manifestos. We can't know what meetings have taken place and we can't definitively "be privy to such meetings where the actual costs of the matter in hand were in discussion".

 

[cool110]

When Labour introduced the revised student loans in 1998 they said the interest rate would adjust with inflation so the amount students borrowed was relative to the amount paid back later in life as graduates.

However, when the recession occurred the prospect of negative interest on student loans was mooted. The Coalition were quick to say the interest rate would never be below 0%.

Pre-1998 student loans were also linked to inflation but did not have the clause allowing the government to make them interest free so those ones did have negative interest (-0.4%) for 1 year.

 

[yorksrob]

To date have they delivered a single mile of usable electrification ignoring electrification on lines proposed by Lord Adonis under the previous government which the Coalition then delayed as part of their spending review?

Yes I know the SRA made bad decisions with Northern and TPE in particular but the current DfT extending both franchises twice without significant improvements to the terms.

Lord Adonis is the pertinent point. Two years of him and the rest Kim Howels and Tony Blair who wasn't interested in railways.

Where we're the electrification schemes and reopening's- The coalition at least has a couple.

 

[pemma]

Where we're the electrification schemes and reopening's- The coalition at least has a couple.

North West, Great Western and Thames Valley electrification were schemes initiated by the previous government, which the current government have tried to claim the credit for, when all they did was postpone the projects so they could undertake a spending review after which they decided the schemes were a good use of public funds. Credit can be given to the Coalition for tagging Windermere-Oxenholme and Wigan-Bolton on to North West electrification though.

The Coalition has proposed more electrification schemes BUT some of them not only haven't been started but won't be completed by the end of the next parliament. (DfT have said TPE electrification will be completed 'some time after December 2020.')

When Tony Blair first took over as Prime Minister local rail travel wasn't seeing any real growth. However, during the 12 years Labour were in power local rail travel started to see exponential growth. Labour were slow to recognise the need for more capacity and to find solutions to deal with more passengers but they did eventually find some like electrification and the Northern Hub.

 

[bnm]

No more than the rate of inflation?

And if inflation is negative? Will regulated fares go down? I reckon not.

Why not? We had negative RPI of -1.4% in July 2009*. With regulated fares price changes being set at RPI+1% at that time we actually had a price reduction of regulated fares by 0.4% in January 2010.

*The January fares round uses the RPI figure from the previous July to set the new regulated fares.

 

[Oswyntail]

North West, Great Western and Thames Valley electrification were schemes initiated by the previous government, which the current government have tried to claim the credit for, when all they did was postpone the projects so they could undertake a spending review after which they decided the schemes were a good use of public funds. Credit can be given to the Coalition for tagging Windermere-Oxenholme and Wigan-Bolton on to North West electrification though.

The Coalition has proposed more electrification schemes BUT some of them not only haven't been started but won't be completed by the end of the next parliament. (DfT have said TPE electrification will be completed 'some time after December 2020.')...

And therein lies the problem of assigning political capital to rail schemes - they just take too long. I do feel, however, that Late-New-Labour were dragging their heels, and Coalition are more enthusiastic.

 

[Busaholic]

On the BBC Spotlight London News, which I watch on i-player in Cornwall, Boris Johnson got in on the Tory act and announced TfL fares rises also pegged to inflation next January, which will be news to the TfL board whose strategy is based on RPI plus 1% to pay for what's in their budget. If Labour form the next government expect that policy to be quietly ditched.

 

[yorksrob]

North West, Great Western and Thames Valley electrification were schemes initiated by the previous government, which the current government have tried to claim the credit for, when all they did was postpone the projects so they could undertake a spending review after which they decided the schemes were a good use of public funds. Credit can be given to the Coalition for tagging Windermere-Oxenholme and Wigan-Bolton on to North West electrification though.

The Coalition has proposed more electrification schemes BUT some of them not only haven't been started but won't be completed by the end of the next parliament. (DfT have said TPE electrification will be completed 'some time after December 2020.'

All announced at the eleventh hour by Lord Adonis, which begs the question, what did New Labour do for rail passengers during the other fourteen years of its tenure.

Answer (to quote Paul Daniels) "not a lot"

 

[pemma]

All announced at the eleventh hour by Lord Adonis, which begs the question, what did New Labour do for rail passengers during the other fourteen years of its tenure.

Answer (to quote Paul Daniels) "not a lot"

Electrification was a last minute change after Lord Adonis unveiled a plan for using cascaded EMUs from Thameslink instead of the previously proposed DMU order. Electrification and EMU cascades were a slower solution and the plan was the first electric services would be on Chat Moss for December 2013, when the new DMUs would have been in service for December 2012. Under the Coalition the first EMUs arrived on Chat Moss in May 2015.

The Conservatives keep blaming Labour for overspending and saying cutbacks were a result of the mess they inherited from Labour. However, as far as the railways were concerned Labour inherited a ticking time bomb from John Major's government called Railtrack, which resulted in billions of pounds of public money having to be be spent to under deliver on the WCML upgrade, which John Major's government must have thought would have been funded from money growing on trees.

If you drew a timeline of rail investment the section with the least investment would be between the end of Thatcher's government and the start of Blair's government. John Major's government seemed to think rail privatisation was the answer to stop public money being spent on railways.

 

[yorksrob]

Electrification was a last minute change after Lord Adonis unveiled a plan for using cascaded EMUs from Thameslink instead of the previously proposed DMU order. Electrification and EMU cascades were a slower solution and the plan was the first electric services would be on Chat Moss for December 2013, when the new DMUs would have been in service for December 2012. Under the Coalition the first EMUs arrived on Chat Moss in May 2015.

The Conservatives keep blaming Labour for overspending and saying cutbacks were a result of the mess they inherited from Labour. However, as far as the railways were concerned Labour inherited a ticking time bomb from John Major's government called Railtrack, which resulted in billions of pounds of public money having to be be spent to under deliver on the WCML upgrade, which John Major's government must have thought would have been funded from money growing on trees.

If you drew a timeline of rail investment the section with the least investment would be between the end of Thatcher's government and the start of Blair's government. John Major's government seemed to think rail privatisation was the answer to stop public money being spent on railways.

I'm certainly not going to defend John Major's Government by fiasco. In fact, I would go so far as to say that the considerable progress on the railway at the time had very little to do with the Tory party and everything to do with British Rail.

Nevertheless, the Blair years saw increasing passenger numbers and national prosperity, yet we saw very little improvement to the railway infrastructure. The Blair years were a wasted opportunity characterised by Ministers whose attitude was that there was little point improving the railway as trains carry around "fresh air".

 

[ScotGG]

Can you substantiate that claim. In my experience, fares on Oyster have risen at a similar or lower rate to other fares in the South East. I don't count the abolition of the off-peak cap as a fares increase per-se as that only affects a (decreasingly) small proportion of travellers.

Most fares on oyster go up 10p every year and have done for quite a few years now. This is averaging 5-10% a year for many trips.

 

[pemma]

I'm certainly not going to defend John Major's Government by fiasco. In fact, I would go so far as to say that the considerable progress on the railway at the time had very little to do with the Tory party and everything to do with British Rail.

British Rail, as it was, ceased on 1st April 1994 due to the Tory party breaking it up in to little pieces to sell off to private companies. The end result was years of no new trains being ordered, then from 1997 onwards we saw huge numbers of new trains being ordered to replace the majority of the life-expired slam door stock, there were trains getting on for 50 years in age when Tony Blair took office.

I'm not saying Labour did enough but they approved a four figure number of new carriages in their first term, which gets forgotten about because they did the bare minimum at times later on.

 

[yorksrob]

British Rail, as it was, ceased on 1st April 1994 due to the Tory party breaking it up in to little pieces to sell off to private companies. The end result was years of no new trains being ordered, then from 1997 onwards we saw huge numbers of new trains being ordered to replace the majority of the life-expired slam door stock, there were trains getting on for 50 years in age when Tony Blair took office.

I'm not saying Labour did enough but they approved a four figure number of new carriages in their first term, which gets forgotten about because they did the bare minimum at times later on.

I'm not sure about the other regions, but the oldest slammers on the Southern in 1997 were the CEP's and HAP's built for the Kent Electrification scheme from 1957/8 onwards and the Hampshire DEMU's from the same time - roughly forty years old, which isn't by any means unusual for rolling stock.

That said, I agree that the privatisation had a disastrous effect on rolling stock replacement. Nevertheless, the slammers would have come due for replacement between 1997 and 2014 (when the last of the VEP's would have reached forty years old) so I'm not going to massively credit labour for doing what would have needed to have been done anyway.

 

[island]

My peak time Monday morning Hull Train's AP fare has gone up 300% since early 2014! Played havoc with my budgetting.

Neither First Hull Trains fares nor advance fares are regulated AFAIK.

Most fares on oyster go up 10p every year and have done for quite a few years now. This is averaging 5-10% a year for many trips.

Trying to justify a generalization with another one isn't especially useful. I could point out other fares that have stayed put (TfL off peak fares outside zone 1) or fallen (zone 1-3 caps) in the last fare round.

 

[pemma]

I'm not sure about the other regions, but the oldest slammers on the Southern in 1997 were the CEP's and HAP's built for the Kent Electrification scheme from 1957/8 onwards and the Hampshire DEMU's from the same time - roughly forty years old, which isn't by any means unusual for rolling stock.

First North Western were still using a small number of 101s from the 1950s in 2003. Although, they were supposed to be withdrawn a couple of years earlier had it not been for teething problems with the 175s, with the majority of slam door local/commuter stock being used in the Network SouthEast area people sometimes forget about other slam door stock still in use at the time. I agree a 40 year old EMU, if it's still reliable, isn't usually seen as vintage though. The 313s, 507s and 508s will all probably reach 40 years in service before being withdrawn.