BBC: Chris Grayling suggests future rail industry wage rises should be linked to lower CPI, not RPI

[bramling]

It seems like a clever move by Grayling for reasons already mentioned. Make it sound like the Government cares (perhaps in the budget you can freeze the fare rise and become a hero) and shift the blame on the rail industry for costing so much - in particular staff wages.

Then, as predicted, let the unions look bad by coming out to say they will fight reduced pay rises, thus looking greedy because there's now a seemingly direct correlation to wages and the general public paying them.

It'll certainly increase those comments from passengers to staff that 'I pay your wages'.

You've got to hand it to Grayling really. He, or those around him, are smart.

Smart or otherwise, I think people do see through this sort of nonsense. And surely there's a certain irony that many railway wages are determined by private TOCs?!

Back in the real world, fares are still rising, we still have the timetable fiascos on various parts of the network, we still have undelivered electrification, and Grayling continues to demonstrate himself as completely incompetent at dealing with any of these issues. As usual the unions could be smarter at drawing attention to some of these failings. It's this sort of rubbish which is exactly why Corbyn actually has a reasonable chance of power now and the Conservatives look likely for a repeat of 1997.

 

[sikejsudjek]

The Tories voter base is stuffed full of senile Daily Mail types who will froth at the mouth at the mere mention of 'unions' or the public sector. So all Grayling has to do is keep blaming them or network rail and he keeps his job.

 

[The Box Photter]

Grayling is seeking to deflect attention away from him and his Department as well as to obfuscate the impending increase in season ticket and other regulated fares at a time when the service delivery to customers is getting worse. Classic politician's trick and yet the media & public fall for it every time.

And to those who say "why should I subsidise the trains through my taxes when I don't use the train" I say: No, but the nurse & doctor who treat you in A&E when you crash your car probably do travel to work by train, so you're benefiting from the value of the network to the country as a whole.

 

[Esker-pades]

You've got to hand it to Grayling really. He, or those around him, are smart.

More politically minded than smart.

 

[ForTheLoveOf]

Criticism of Grayling and the DfT is rightly given for their many mistakes - but I don't think it's fair to criticise him for the move he's proposing. Using RPI is, and always was, simply wrong - it's an easy way of claiming that fares "aren't increasing in real terms" when in fact they are (to decrease rail subsidy). Use the real CPI, or call it what it is and say that fares are rising by CPI+x%.

 

[the sniper]

So he opposes nationalising the railway, which would allow the state to control wages, but isn't willing to accept this specific cost, of all the many costs, of having the industry privatised...

Do people wonder why staff don't trust the leaders in this industry?

 

[Dave1987]

He didnt blame fare rises on staff at all - no matter how you try and twist it - he merely stated that wage rises should fall into line with fare rises.

I am reading his words for exactly what they say. He is trying to directly link staff pay to ticket price increases which is a classic ‘divide & conquer’ tactic to deflect attention away from himself and the shambles he has created. Maybe he should concentrate on the sheer waste in the franchising process before taking aim at those at the bottom of the food chain eh?

 

[pemma]

Well it will save an utter fortune, about £30 a year on a season ticket.

Are you trying to suggest passengers think of the £30 as nothing and would happily pay more so that train crews can continue to get a bigger pay rise?

If a guard is on £25,000 then getting a 3.2% increase over a 2.5% increase adds less than £10 a month to their net wage. Surely that £10 a month is nothing?

 

[pemma]

So he opposes nationalising the railway, which would allow the state to control wages, but isn't willing to accept this specific cost, of all the many costs, of having the industry privatised...

I worked for a business where a bigger business (with a shareholding in the company) was providing financial support during the period following the 2008 recession. Consequently, the directors of the business I worked for were not allowed to authorise any increase in the payroll bill without explicit permission of the bigger company who was providing financial support. If subsided TOCs were treated that way by DfT then Northern wouldn't even be allowed to offer a 0.1% pay rise without DfT signing it off first, even if SWR and Southern could have full control over setting pay levels.

 

[pemma]

Grayling may be probably the worst Transport Secretary ever but he has done exactly what he wanted to do in a calculated way. He knows his department has been in the firing line recently and knew he would be in the firing line when the annual fare rises were announced. What better way to deflect attention from yourself than to try and plant the blame for fare rises on staff. Trouble is is when you need the help of staff to assist you when your department has well and truly ballsed up. Grayling knows the cost of everything but the value of nothing.

Grayling has approached the unions with his proposal before - CPI linked fare rises in exchange for CPI linked pay increases, which both Mick Cash and Mick Whelan thought was hilarious.

 

[Starmill]

Fundamentally the fares that the DfT caps are regulated products managed in part by the government. Most fares aren't regulated. Staff wages also aren't regulated and the company can pay their staff pretty well whatever they like.

This is at the design of the government. This is inherent to the privatised system that the party of government say they are 100% behind. For them to then complain about the staff wage bill is really unthinkable hypocrisy.

 

[Mag_seven]

I wonder if this story will just turn out to be a "one day wonder"?

 

[the sniper]

Grayling has approached the unions with his proposal before - CPI linked fare rises in exchange for CPI linked pay increases, which both Mick Cash and Mick Whelan thought was hilarious.

Don't be so naive. He micro manages the industry and has direct control over regulated fare increases, yet takes absolutely no responsibility for any of the decisions he makes. It's always someone else's fault, be it NR, TOC management, the unions, the staff...

I'm sure he appreciates your support though.

I wonder if this story will just turn out to be a "one day wonder"?

Probably. Just a distraction.

 

[pemma]

Don't be so naive. He micro manages the industry and has direct control over regulated fare increases, yet takes absolutely no responsibility for any of the decisions he makes. It's always someone else's fault, be it NR, TOC management, the unions, the staff...

I'm sure he appreciates your support though.

I don't support Grayling and judging by the approx. 20 passenger's comments on the local news just now, my view is aligned with the majority of North West passengers. We've love a fare freeze or even a reduction but if that's not possible a solution needs to be found to allow fare increases be reduced to a lower level than RPI.

 

[GB]

Are you trying to suggest passengers think of the £30 as nothing and would happily pay more so that train crews can continue to get a bigger pay rise?

If a guard is on £25,000 then getting a 3.2% increase over a 2.5% increase adds less than £10 a month to their net wage. Surely that £10 a month is nothing?

The difference between 3.2% and 2.5% is about £175 p.a or £13 on a 4 weekly pay schedule. Not a life changing amount by any stretch of the imagination but it does build up for future years and that difference might be enough to offset a rise in other household bills. As the sayings go, it all adds up and every little helps.

 

[pemma]

The difference between 3.2% and 2.5% is about £175 p.a or £13 on a 4 weekly pay schedule. Not a life changing amount by any stretch of the imagination but it does build up for future years and that difference might be enough to offset a rise in other household bills. As the sayings go, it all adds up and every little helps.

Any sum of money can make a difference to some people. It's possible someone could go overdrawn by just spending £1 extra a month. Train crews are lucky in the respect that if they are short of money overtime always seems to be available, other workers don't have that luxury.

 

[Kite159]

It might be good PR from Grayling to come out with something like the fare rise this year will be "RPI -2%", with a less profile rise in May or even September (maybe something like 1% each time). Maybe sweeten the deal with the TOCs with allowing them to adjust times where off-peak tickets are valid

 

[pemma]

It might be good PR from Grayling to come out with something like the fare rise this year will be "RPI -2%", with a less profile rise in May or even September (maybe something like 1% each time). Maybe sweeten the deal with the TOCs with allowing them to adjust times where off-peak tickets are valid

Or what about those lines which have seen improvements already (as of May 2018) will get an increase of RPI, those which are overdue improvements will see a fair cut, which will be reversed 6 months after implementation of the improvements?

 

[FGW_DID]

Tickets going up 3.2%, I look forward to my 3.2% pay rise then!

 

[nr758123]

Paul Plummer, the chief executive of the Rail Delivery Group, which represents the railway, said: “Fares are underpinning a once-in-a-generation investment plan to improve the railway and politicians effectively determine that season ticket prices should change in line with other day-to-day costs to help fund this.”

So who can decide whether or not this fare increase is implemented? Chris Grayling? The TOCs? Or is it just one more decision for which no-one takes responsibility?

 

[squizzler]

The train operators should publicly tell the government "we would be happy to raise our fares by less than the CPI. But we have negotiated our franchises on the basis of premium payments that rise each year by the RPI. You want the fares and the staff salaries to rise by the lower measure of inflation. Let the premium payments also inflate at a correspondingly lower rate!"

 

[Chrisgr31]

Chris Grayling is not a crook as post 12 claims.
But he is a politician.
They measure their success by the headlines they generate, not by how well things are run.
By Graylings's standards his one day headline grabbing venture is a great success, generating miles of column inches & getting him TV & radio interviews & quotes galore today.

And, from his view point, his greatest success today is in getting the two big rail unions to say no way.

Now he has got them identified in the public mind as the cause of rail fare increases.
That was his objective & RMT & ASLEF have walked right into it, because their leaders are, like Grayling, addicted to seeing themselves in the headlines.

I am slightly concerned as I agree with you!

The unions have walked in to a trap. What they should have done was agreed that wage rises should be linked to CPI from the next round of negotiations as long as fares were as well. That would have then brought attention to how fare rises are calculated and the arguments around franchises being bid on certain expectations.

Instead of which the unions are being blamed for the fare increases which is plainly incorrect.

 

[jon0844]

I am slightly concerned as I agree with you!

The unions have walked in to a trap. What they should have done was agreed that wage rises should be linked to CPI from the next round of negotiations as long as fares were as well. That would have then brought attention to how fare rises are calculated and the arguments around franchises being bid on certain expectations.

Instead of which the unions are being blamed for the fare increases which is plainly incorrect.

The two shouldn't be linked at all. There would be other ways to fund staff pay rises, like promotions to encourage more off peak usage. Passengers like seeing staff on the ground, and many TOCs could benefit from more drivers. With people starting to think their ticket price is down to staff costs, they'll be starting to get angry with seeing staff anywhere.

 

[1e10]

He has no business in interferring with private sector pay.

Apart from when members on this forum think he should be personally managing train time tables.

 

[Dr Hoo]

The two shouldn't be linked at all. There would be other ways to fund staff pay rises, like promotions to encourage more off peak usage. Passengers like seeing staff on the ground, and many TOCs could benefit from more drivers. With people starting to think their ticket price is down to staff costs, they'll be starting to get angry with seeing staff anywhere.

Ah yes. Takes me back to the 1970s, when I commuted through Seven Sisters. Other passengers would frequently moan about "overmanning" of platform staff (as they streamed off slam-door units leaving the doors open) before also moaning about staff shortages in the guards' grade because their previous two trains had been cancelled and also complaining about fare increases whilst services were deteriorating.

 

[Paul L]

Pity the government doesn't have another genius like Grayling to come up with a way of stopping executive pay rises. Eleven percent average rise last year!

 

[ChiefPlanner]

The two shouldn't be linked at all. There would be other ways to fund staff pay rises, like promotions to encourage more off peak usage. Passengers like seeing staff on the ground, and many TOCs could benefit from more drivers. With people starting to think their ticket price is down to staff costs, they'll be starting to get angry with seeing staff anywhere.

This was the "winning formula" of NSE - improve overall standards of cleanliness and marketing and fill the empty off peak seats , (who remembers free off peak car parking ?) , and following the overall positive comments on the challenges of recruiting in London and SE for staff in the Monopolies and Mergers Report - which people assumed would trash the railway management , but came out with a well argued case for a job quite well done with very dedicated local management (Guards and platform staff - not a hugely attractive job frankly with quite nasty conditions and pretty horrible shift patterns - 0400 sign on Gidea Park anyone ?) - good progress made by the late 1980's from a pretty low base IMHO.

How do we move on then ?

 

[sbt]

As for wage rises as I said earlier, many public sector wages are already determined by CPI now, and then when CPI is too high they use another method over the top known as ALAWPC (As Little As We Possibly Can). Thanks to these changes in methodology, my average annual increase for the last decade has been around the 0.5% mark, as low as CPI ever gets, and rarely does in reality meaning a net loss more or less year on year.

Same situation. To the extent that last week my union announced a challenge in the courts.

And that's without factoring in the fact that MOD scientists get paid around 10% less for the same or equivalent roles than the rest of the Civil Service.

 

[Chester1]

This was the "winning formula" of NSE - improve overall standards of cleanliness and marketing and fill the empty off peak seats , (who remembers free off peak car parking ?) , and following the overall positive comments on the challenges of recruiting in London and SE for staff in the Monopolies and Mergers Report - which people assumed would trash the railway management , but came out with a well argued case for a job quite well done with very dedicated local management (Guards and platform staff - not a hugely attractive job frankly with quite nasty conditions and pretty horrible shift patterns - 0400 sign on Gidea Park anyone ?) - good progress made by the late 1980's from a pretty low base IMHO.

How do we move on then ?

Same situation. To the extent that last week my union announced a challenge in the courts.

And that's without factoring in the fact that MOD scientists get paid around 10% less for the same or equivalent roles than the rest of the Civil Service.

The ToCs are private companies though so it is not the same situation. Also, in addition to the points made about unregulated fares, there are other ways of limiting or reducing the wage bill as a proportion of costs. The most obvious is encouraging passenger growth to rise faster. I am not a fan of the RMT but they have a point on this one.

 

[Hophead]

Sorry, am I just being a bit dense? Fares rise by RPI +1% because the DfT requires it (so far as I'm aware). If they wanted to have fares rise by a smaller amount, then RPI + 0.5% would surely fit the bill? Or RPI + anything less than 1.

Conversely, why does linking the rise to a different measure lead to any different result? I seem to recall a comment (possibly in the other thread) that CPI was some 0.7 points behind RPI. So, CPI +, say, 1.7% would be more or less the same as RPI + 1%. And CPI +2% means a higher rise than at present.

I'm kind of baffled by it all and whether this actually means anything.