High fares - The issue that won't go away

[Richardr]

It's not misleading or irrelevant at all - capital employed broadly speaking reflects the risk that the owning groups are taking. 3% of revenue/costs is a very substantial profit margin when considering the fact that nowadays the arrangements are pure management contracts with no revenue risk.

Such profit margins were perhaps more acceptable in the days when TOCs did take revenue risk, since they could be on the hook for millions of pounds of franchise payments regardless of actual revenues.

Revenue / costs is nothing to do with capital of course.

The justification for privatisation was for private investment into the railways. That never happened, as we see with the ROCE. Far from it being misleading, it actually highlights the fundamental problem with privatisation- huge sums of money leaving the industry in exchange for very little.

Not from the franchise holders / operators. The main investments are in rolling stock and infrastructure and that is elsewhere.

 

[talldave]

Settled the pay dispute, and made promises about a more reliable future railway.

So they spent OUR money on something we didn't ask them to and spouted more lies to shut us up. Great.

 

[JonathanH]

So they spent OUR money on something we didn't ask them to and spouted more lies to shut us up. Great.

I think everyone wanted an end to the disruption that industrial action causes. Is lower staff pay a feasible means to reduce train fares?

 

[talldave]

I think everyone wanted an end to the disruption that industrial action causes. Is lower staff pay a feasible means to reduce train fares?

No one mentioned lower pay. Paying ludicrous pay increases that some of us could only dream about is stupid, but I wouldn't have expected anything else from Labour.

 

[yorksrob]

So they spent OUR money on something we didn't ask them to and spouted more lies to shut us up. Great.

You may have been happy to put up with never ending disruption - those of us who rely on the trains weren't.

== Doublepost prevention - post automatically merged: 26 May 2025 ==

No one mentioned lower pay. Paying ludicrous pay increases that some of us could only dream about is stupid, but I wouldn't have expected anything else from Labour.

The Tories had years and years to settle the dispute and they failed.

 

[Undiscovered]

But having one railway employer makes harmonisation easier in one key way: the unions can’t play one TOC off against another. Like it or lump it comes into play.

I would expect that existing staff would TUPE over into GBR, while new recruits would sign on for less money and poorer terms and conditions. As the existing workforce retires or leaves, they're replaced by the new starters.
It has the downside of freezing current workers in their current roles, but the upside that this may frustrate them enough to leave.
A lot of people would still join the railway at £10-15k less per annum than current employees, especially if you sweeten that with a Priv system that allows free travel nationwide, as that's now your TOC.

 

[styles]

I would expect that existing staff would TUPE over into GBR, while new recruits would sign on for less money and poorer terms and conditions. As the existing workforce retires or leaves, they're replaced by the new starters.
It has the downside of freezing current workers in their current roles, but the upside that this may frustrate them enough to leave.
A lot of people would still join the railway at £10-15k less per annum than current employees, especially if you sweeten that with a Priv system that allows free travel nationwide, as that's now your TOC.

In fairness, and without wanting to go too off-topic, I would consider a driver job for £10k below the average at a lot of TOCs, especially if it included free travel, which is worth an awful lot of money to someone like me who travels by train a lot for hiking etc where the journeys are hundreds of miles a pop.

The unions will no doubt fight this for new recruits, but I think ultimately the government would win out if they did this.

 

[The exile]

I think the question is more, how do our neighbours on the continent seem to manage to have affordable fares - do they have higher subsidies than us, in which case we need to ask ourselves as a nation whether affordable train services are actually worth paying for as a social good.

Massively higher subsidy (often disguised) coupled with lower operating costs (UK drivers’ pay quoted by German unions as “what we’ve fallen far behind) and different standards. As an immediate thought - how much does the inspection and repair of line side fencing cost? (OK - not massive, but when you consider most continental non-HS lines are unfenced.). I suspect there’s a vastly different interpretation of the “R” in ALARP as well…

 

[Tetchytyke]

Paying ludicrous pay increases that some of us could only dream about is stupid

14% rise over two years when the inflation rate over those same two years was 20%? Ludicrous.

First- the brains trust behind Avanti and TPE- gave their CEO a £800,000 bonus in 2023 whilst claiming there was no money for their staff. Chin chin.

A lot of people would still join the railway at £10-15k less per annum than current employees

But would those people be of the right calibre? Train driving is hard- it’s a high concentration/low stimulus role- and most people simply aren’t cut out for it. I’d love to be a train driver but I’d not be suitable, my concentration isn’t high enough.

 

[AlterEgo]

No one mentioned lower pay. Paying ludicrous pay increases that some of us could only dream about is stupid, but I wouldn't have expected anything else from Labour.

God forbid some people get paid better salaries.

 

[Tetchytyke]

Not from the franchise holders / operators.

It was originally- they would invest in the ROSCOs who would invest in new or refurbished trains. Obviously it hasn’t worked out like that and the ROCE they earn really is the very definition of money for old rope.

But as for fares, whilst it’s a huge amount of money for old rope it’s also quite a small amount of money overall. Still, a 3%-5% cut is still 3%-5% the taxpayer or the fare payer doesn’t have to pay.

 

[TUC]

I think everyone wanted an end to the disruption that industrial action causes. Is lower staff pay a feasible means to reduce train fares?

Not as crude as lowering pay-that would not be acceptable-but changing terms and conditions to be more flexible on what can be delivered within the revenue generated by the levels of fare that are publicly acceptable, absolutely. It's a road plenty of businesses have been down.

 

[CyrusWuff]

14% rise over two years when the inflation rate over those same two years was 20%? Ludicrous.

Not forgetting that many TOC staff got no pay increase at all in 2020 and 2021.

For those with an anniversary date of 1st April, it's usually February RPI that forms the basis of the pay deal.

For 2020 that was 2.5%, 2021 it was 1.4%, 2022 it was 8.2%, 2023 it was 13.8% and 2024 it was 4.5%.

That gives a compound increase of at least 33.7% from the 2019 pay deals.

What was actually received was 0% for 2020, 0% for 2021, 5% for 2022, 4.75% for 2023 and 4.5% for 2024, for a compound 14.9%, which is significantly below inflation.

 

[Joe Paxton]

Selling tickets I was often met with the horrified expression 'how much?' when the fare was requested. I ceased to be a booking clerk in 1984.... Complaints about the cost of rail travel are nothing new.

This... the level of fares is an issue that will never go away!

 

[Tetchytyke]

That gives a compound increase of at least 33.7% from the 2019 pay deals.

What was actually received was 0% for 2020, 0% for 2021, 5% for 2022, 4.75% for 2023 and 4.5% for 2024, for a compound 14.9%, which is significantly below inflation.

Yeah, it’s weird the way they always announce the pay rises using the compounded figure but never announce the underlying inflation using the compounded figure.

 

[Undiscovered]

But would those people be of the right calibre? Train driving is hard- it’s a high concentration/low stimulus role- and most people simply aren’t cut out for it. I’d love to be a train driver but I’d not be suitable, my concentration isn’t high enough.

We are in danger of digress, but, as long as the tests and application criteria remained, then, yes, people would still apply.

 

[yorksrob]

Massively higher subsidy (often disguised) coupled with lower operating costs (UK drivers’ pay quoted by German unions as “what we’ve fallen far behind) and different standards. As an immediate thought - how much does the inspection and repair of line side fencing cost? (OK - not massive, but when you consider most continental non-HS lines are unfenced.). I suspect there’s a vastly different interpretation of the “R” in ALARP as well…

I think we perhaps ought to consider whether subsidy more in line with peer group countries might not be a bad thing.

 

[yorkie]

...Wouldn't we all like lower prices, not just for rail travel but for other things too, in my case model trains, progressive rock CDs and takeway curries. ..

This is a false equivalence; very many people don't take the train because it's much cheaper to drive.

I won't dissect the takeaway curry comparison as it's so off topic, but let's just say it's about as opposite a comparison as it's possible to get!

== Doublepost prevention - post automatically merged: 26 May 2025 ==

To me the real "issue" isn't so much (super) off peak fares, they "seem" expensive to a layperson but usually are not terrible value for trips in and out of big cities by the time you consider parking and time recovered not driving. CrossCountry seems to be the exception here where I always feel they offer poor value.

The real problem to me is Anytime fares on (especially) long distance routes (which IIRC are unregulated for the most part). I feel these could come down substantially with not a huge drop in revenue - especially given 90%+ on these trains must be using cheaper advances, and even then load factors seem very poor. It would also improve the passenger experience significantly where the first (super) off peak train is absolutely rammed and the previous ones are not busy at all, which is extremely frustrating for passengers to see.

I suspect you could even go as far as removing anytime tickets entirely and only having super off peak/off peak only on long distance services for significantly less than £1bn/yr. I suspect it would pay for itself overall in economic benefits as people could do longer commutes (especially in hybrid roles) and it would generate more tax revenue from the increased salaries people would get.

The drawback would probably be significant overcrowding, but I feel a lot of that happens already.

I agree with you, from an ideological perspective.

However the Government is unwilling to fund the reduction in price by Anytime ticket holders with taxpayers cash.

Indeed the DfT policy/aspiration appears to be to abolish all walk up fares except Anytime, as currently being trialled by LNER

 

[rwblake]

A reduction in fares (i.e. an increase in subsidy) might please some who think fares are too high but, as much as people complain about the fares, if the network cannot be relied on by the average passenger then i'd expect it'd still be a hard sell. I find that fares (with a railcard) are comparable to the costs of driving for one passenger. For multiple passengers driving has many benefits, and congestion and emissions are much reduced, plus you actually reach your real destination. Even if fares were reduced there would still be some who would see the fares as too high.

 

[yorksrob]

A reduction in fares (i.e. an increase in subsidy) might please some who think fares are too high but, as much as people complain about the fares, if the network cannot be relied on by the average passenger then i'd expect it'd still be a hard sell. I find that fares (with a railcard) are comparable to the costs of driving for one passenger. For multiple passengers driving has many benefits, and congestion and emissions are much reduced, plus you actually reach your real destination. Even if fares were reduced there would still be some who would see the fares as too high.

Which is of course, all well and good if you're eligible for a railcard.......

 

[Sonic1234]

This... the level of fares is an issue that will never go away!

Especially compared to the (perceived) inexpensive of car travel.

I find that fares (with a railcard) are comparable to the costs of driving for one passenger

I assume you're considering the full costs of car ownership. Most people won't do that, bills soon get forgotten and there's a big psychological element with costing driving - the act of travel is separated from paying for travel, therefore most people underprice or even consider a journey to be free.

 

[Haywain]

I think we perhaps ought to consider whether subsidy more in line with peer group countries might not be a bad thing.

Be careful what you wish for. In France, for example, many lines have very limited services. The high speedlines are a show piece that papers over a lot of cracks.

 

[yorksrob]

Be careful what you wish for. In France, for example, many lines have very limited services. The high speedlines are a show piece that papers over a lot of cracks.

France is also a lot less densly populated than the UK. Our geography is more similar to The Netherlands/Germany etc.

 

[Haywain]

France is also a lot less densly populated than the UK. Our geography is more similar to The Netherlands/Germany etc.

I don't read an awful lot of good things about the German rail network and its services either. The Netherlands is nothing like the size of Great Britain or even England.

 

[yorksrob]

I don't read an awful lot of good things about the German rail network and its services either. The Netherlands is nothing like the size of Great Britain or even England.

Austria, Germany, Switzerland, Portugal.....

There seem to be a few countries with affordable rail fares to choose from.

 

[Haywain]

Austria, Germany, Switzerland, Portugal.....

There seem to be a few countries with affordable rail fares to choose from.

Cheap fares are no good if the service isn't any good though. And subsidy might be a result of higher taxes.

 

[Bald Rick]

Late to the party here, but a few thoughts…

But I'd also be looking for a quick win that could be pointed to. Things such as a national railcard available to all, or making Fridays all off peak could be done relatively quickly and easily.

Two things here. The demographic market segment of people who wish to travel by rail for their usual journeys and are not eligible for a railcard is frankly rather small (and getting smaller).

Second, why would the railway reduce fares on what is the highest revenue half day of the week? (Friday pm)

Hiw much would fares need to increase by to eliminate operating subsidy? (Assuming the number of passengers and distance travelled remained the same, which i appreciate they won't)

In ballpark terms they would need to double. But isn't the general consensus that current fare levels are not far off revenue maximising?

Current fare levels are not revenue maximising. Hence fare regulation.

I think the question is more, how do our neighbours on the continent seem to manage to have affordable fares - do they have higher subsidies than us, in which case we need to ask ourselves as a nation whether affordable train services are actually worth paying for as a social good. Alternatively, if they have a good, affordable service with lower fares, what are we doing wrong.

Three very broad reasons:

1) they run a much less frequent or useful service
2) they pay their staff significantly less
3) both.

We know driver only operation requires a massive infrastructure investment.

In most cases it doesn’t.

Mick Whelan of ASLEF, speaking last night on the BBC News, said that an advantage of nationalisation will be harmonising terms and conditions.

An advantage to ASLEF members, unless they all agree to harmonise to Southeastern’s Ts and Cs!

You may have been happy to put up with never ending disruption - those of us who rely on the trains weren't.

This is the nub of it. I too wanted an end to the disruption. The price was an increase in the salary bill of around £150m, with no productivity benefit as part of the deal. Leaving aside opinions on whether that is right or wrong, it is a material increase in the cost base of the industry, and it has to be paid for. As we know there are only two* sources of income for the railway - farepayers and tax payers.

*and property income, albeit most of that comes from passengers too!

 

[30907]

Which is of course, all well and good if you're eligible for a railcard.......

Which means all of us for more than half our lives, and many of us for rather more than that.
Exception: you arrive in GB aged 30, live outside NSE, always travel solo, and depart (in one or other sense) before you turn 60.

Austria, Germany, Switzerland, Portugal.....

There seem to be a few countries with affordable rail fares to choose from.

Portugal is the only one of those with affordable fares for occasional travellers.

 

[Sonic1234]

The demographic market segment of people who wish to travel by rail for their usual journeys and are not eligible for a railcard is frankly rather small (and getting smaller).

I was once on a GWR Intercity service at the weekend and during the ticket check, everyone within earshot had a railcard (and actually had one, not trying it on). Either non-railcard holders find the prices too high, or the Intercity railway doesn't provide for the travel needs of 30-59s.

I expect the passengers without railcard discounts on London Overground is a majority though.

 

[Joe Paxton]

But I'd also be looking for a quick win that could be pointed to. Things such as a national railcard available to all [...]

[...] The demographic market segment of people who wish to travel by rail for their usual journeys and are not eligible for a railcard is frankly rather small (and getting smaller).

This reads like a bit of a weird comment - it seems to rather write off from rail travel those age 30-59 who don't travel with their 'family', nor regularly with a specific other person, are not an ex-service person, do not have a qualifying disability, or are not travelling wholly within the 'wider south-east' (ex-NSE area).

FWIW, I'm not particularly a proponent of a 'national railcard' - I can see both arguments for and against.