Promise of cheaper rail fares put at risk by Whitehall in-fighting

There is an article in The Times today stating that the Williams Review has been delayed due to concerns over financial implications of fares reform. I can't see the full article because of the paywall, but it starts as follows:

The rollout of cheaper train fares is at risk because of a Whitehall row over the biggest shake-up of the railways in 25 years, The Times has learnt. A review of the rail industry has been delayed after a clash between the Treasury and the Department for Transport (DfT) over the cost of reforms.

The analysis, led by Keith Williams, the former chairman of British Airways, had been due for release as a white paper last autumn, but ministers will now only promise that it will be published by the end of July.

It is understood that the delay is due to concerns over the financial implications of an overhaul of the fares system. Mr Williams said he wanted “simplified fares and ticketing” to stop...

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I have to say, this doesn't seem very surprising at all and was probably predicted by many people on here. Can anyone see the full story and/or have any more details?

What ‘promise of cheaper fares’ was there?

Meerkat said:

What ‘promise of cheaper fares’ was there?

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I took the title from the Times article headline; it's not my wording. I think it may be a misinterpretation of RDG promising "more cheaper tickets" as a result of a potential new round of complification bringing in even more advance fares (and potentially removing quite a lot of walk-up fare validity as is already happening on the East Coast), with some of these new advance fares being cheaper than the current cheapest on certain routes. But I don't know.

As we all know simplification will not equal cheaper fares so in many respects stalling reform could be seen as a good thing.

The recent anti- passenger actions of Avanti following the single leg pricing trial are a good example of what the TOCs would like to do.

Less flexibility, fewer rights, less choice of the routes you may take....

Hadders said:

As we all know simplification will not equal cheaper fares

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For people on here who can faff about for hours with knowledge to get a cheap fare.

For those who just buy one online, it probably will, particularly for single or three-way journeys.

For all I like finding me a bargain, that isn't what the fares system is for, and I would overall prefer it more transparent than that I can get a cheap deal.

Bletchleyite said:

For people on here who can faff about for hours with knowledge to get a cheap fare.

For those who just buy one online, it probably will, particularly for single or three-way journeys.

For all I like finding me a bargain, that isn't what the fares system is for, and I would overall prefer it more transparent than that I can get a cheap deal.

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I don't understandwhat you are trying to say; there is no need to "faff" to get a reasonable fare. Anyone can get a reasonable fare by simply using an appropriate retailer that offers a combination of fares where this is cheaper.

The suggestion that fares are going to reduce for the masses is totally false.

The reality is that revenue neutral fares reform would be political suicide due to massive fare roses for many people (as the really expensive fares such as Manchester to London Anytimes have to reduce disproportionately)

And of course increased subsidy is problematic. It would need a lot of subsidy if we are to see fares actually reduce.

So I can't see anything changing anytime soon.

Any sort of simplification that keeps the total fare income about the same will by definition result in cheaper fares for some and more expensive fares for others. But probably more relevant here is that some franchises will gain and some will lose. If implemented while some franchises still take their own revenue risk, those that are net beneficiaries will just pocket the gains but the net losers will want recompense from the government.

So really this sort of fare reform becomes very difficult while there are franchises that take revenue risk. Those franchises would need to be re-negotiated, or allowed to run to term and be replaced by new arrangements that build in the necessary contractual provisions for fares re-structuring. The first option would probably involve payouts to the operators, and the second would defer any new fares arrangement (at least in certain parts of the country) by several years.

edwin_m said:

Any sort of simplification that keeps the total fare income about the same will by definition result in cheaper fares for some and more expensive fares for others.

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Exactly! And when you consider the aims, such as reducing the cost of the most expensive Anytime fares, and reducing/removing the need to split by reducing the cost of longer distance fares, that is going to put incredible pressure on good value off peak fares such as Sheffield to Derby which would have to rise substantially to ensure the system was "revenue neutral"

I am well aware some people strongly disagree with me, but in my opinion a "revenue neutral" solution is political suicide. The people who would lose out would not tolerate it. The headlines would be all negative. The media won't be interested in interviewing a business user who is overjoyed by their £300 Anytime return being reduced.

It just is NOT going to happen.

So, that leaves the only other possibility, which is a large increase in subsidy to avoid increasing shorter distance leisure fares. While I, as a non-car driver would obviously support such a move, the reality is probably that insufficient quantities of UK taxpayers would support that at the current time.

edwin_m said:

But probably more relevant here is that some franchises will gain and some will lose. If implemented while some franchises still take their own revenue risk, those that are net beneficiaries will just pocket the gains but the net losers will want recompense from the government.

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Indeed so it would be difficult to implement except when franchises change hands. It's very likely that the changes would take place over a period of time, one route at a time, thus causing even more anomalies in the short term (as we have seen with the farcical LNER fares trial)

edwin_m said:

So really this sort of fare reform becomes very difficult while there are franchises that take revenue risk. Those franchises would need to be re-negotiated, or allowed to run to term and be replaced by new arrangements that build in the necessary contractual provisions for fares re-structuring. The first option would probably involve payouts to the operators, and the second would defer any new fares arrangement (at least in certain parts of the country) by several years.

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Indeed this is a major stumbling block.

I fully expect people to reply saying "but we must do something" and hope that some sort of half-baked compromise is reached, which will just annoy everyone.

Those who say "But the old system is outdated" are really saying that they want things like the abolition of Off Peak (Saver) products and for everything to be either fully flexible or booked train only as done by airlines (this is seen as simple) and for discouts for making a day return to be abolished. Some of them also see this as an excuse to force all sales to be through one monopoly retailer (thus losing innovation and choice), others see it as a good opportunity to push pointless smart cards which tickets have to be loaded on to (which is the worst of all worlds). Some people want a nationwide PAYG system (yeah, right!). They all have various different agendas, but at the end of the day nothing should change unless we have assurances that the good value fares (such as the price of a Sheffield to Derby day return being £12.60) will not go up in price. If such assurances are not given, we all need to oppose the changes if we wish to retain good value fares.

Bletchleyite said:

For people on here who can faff about for hours with knowledge to get a cheap fare.

For those who just buy one online, it probably will, particularly for single or three-way journeys.

For all I like finding me a bargain, that isn't what the fares system is for, and I would overall prefer it more transparent than that I can get a cheap deal.

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Consider London to Manchester. The current 'complicated' walk on fares are:

Anytime Return £360
Off Peak Return £92.10

The Anytime fare is hideously priced, the Off Peak Return is reasonably priced. The train companies would like to simplify this and move to a system of Advance fares and a walk on fare that would probably be something like £100 Anytime Single. The will claim they've reduced the price of Anytime return by £160 but fail to mention that hardly anyone buys it. In the meantime the cost of walk on off peak travel doubles but the sweetner will be the promise of lots of cheap Advance fares to sweeten the blow.

Advance fares are unregulated so when Avanti are a bit strapped for cash they price gouge by reducing the number of tickets in the cheaper tiers, withdrawing the cheapest Advance tickets from popular trains etc. All back door methods of raising revenue that you can expect from a 'here today gone tomorrow' train operating company.

There is nothing complicated about London to Manchester fares. They don't need simplifying. This isn't anything to do with those in the know trying to work the system. But we're in real danger of massive, massive fares increasing via the back door under the guise of simplification.

Next, let's look at Stevenage to London. There are no Advance fares (and I'm ignoring the pointless LNER only fares). Current complicated walk on fares are:

Anytime Single £15.50
Anytime Day Return £23.30
Off Peak Return £29.70
Off Peak Day Return £18.40 (no evening restrictions)
Super Off Peak Day Return (weekdays) £17.90
Super Off Peak Day Return (weekends) £12.30
Super Off Peak Day Single (weekends) £12.20

I suspect the aim would be to simplify this by moving to single leg pricing on contactless with prices something like:

Anytime £11.65
Off Peak £9.20

This would represent a massive increase in price for weekend travel and anyone making a day return going out after 09:30 but returning in the evening peak.

The train company would claim the price of an Anytime Single fare is being reduced by over 20% without mentioning the increases for off peak travel.

A further sting in the tail would come for Network Railcard users who can purchase a discounted Off Peak Day Return on a weekday for £13 (it's actually £12.15 but the minimum fare applies). You can bet the minimum fare won't be halved if single leg pricing is introduced, leaving Network Railcard users with fare increases of 50%

This is just an example of the risk of fares simplification. The current setup is far from ideal but we need to be very, very careful what we wish for.....

Weekday ‘peak’ single: £12.00
Weekday ‘off peak’ single: £9.00
Weekend single: £6.00

Just imagine, customers might actually understand this. More might actually travel by train.

Some would be worse off; many better off.

TfL have effectively done the same thing with higher charging in the evening peak, and no one has died.

There’s a lot of political momentum for change; it’s not going to not happen. You’d be better off influencing it, rather than opposing it totally, in my view.

The cheaper fares from reform would be for commuting, because in order to move from the current season ticket model, pay as you go daily fares would need to be related to a weekly cost divided by 5. Anything that puts up commuter fares more than at current rates is politically toxic so change here costs money.

For longer distance fares, reforms will not lead to overall higher fares because they operate in a competitive market. But the ridiculous situation now where retailers and a small group of people in the know can game a fares structure to undercut fares that other passengers pay clearly is not sustainable - at some point in the future the system will need to change so that if the fare at a particular time is 'x' certain retailers and passengers cannot decide that it will be 'y' instead. Remember that it is the industry's own rules as set by government that dictate fares and then allow them to be undermined, so at some point it will unravel.

alistairlees said:

TfL have effectively done the same thing with higher charging in the evening peak, and no one has died.

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I don't think anyone appreciates just how much off-peak fares went up in London for travel between 4pm and 7pm.

This is because a) the fares are still relatively low in absolute terms (e.g. people don't notice the difference between a £3 and £5 fare, b) there is a sop which allows off-peak fares to apply into Zone 1 during this time and c) the fare is capped by zonal caps / travelcard.

Over longer distances the fares will be higher, there won't be the zone 1 sop and there won't be caps.

alistairlees said:

Weekday ‘peak’ single: £12.00
Weekday ‘off peak’ single: £9.00
Weekend single: £6.00

Just imagine, customers might actually understand this. More might actually travel by train.

Some would be worse off; many better off.

TfL have effectively done the same thing with higher charging in the evening peak, and no one has died.

There’s a lot of political momentum for change; it’s not going to not happen. You’d be better off influencing it, rather than opposing it totally, in my view.

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I don't totally oppose reform, and a structure like you describe would be acceptable. I do wonder if a 3rd tier of fares via Contactless or Oyster is technically possible or if TOCs/DfT consider it desirable, as far as I know it's not been done anywhere else.

If moving to single leg pricing on something like Stevenage to London then it really would have to be via Oyster/Contactless otherwise it could be a bit of a nightmare with purchasing paper tickets, especially from TVMs if you're trying to purchase 2 singles. A solution to the railcard issue would also need to be found as well as daily capping, which if done properly could be a solution to the outboundary travelcards.

alistairlees said:

Weekday ‘peak’ single: £12.00
Weekday ‘off peak’ single: £9.00
Weekend single: £6.00

Just imagine, customers might actually understand this. More might actually travel by train.

Some would be worse off; many better off.

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In order for many people to be better off, subsidy would need to increase. As mentioned above, I am not opposed to this personally.

alistairlees said:

There’s a lot of political momentum for change; it’s not going to not happen. You’d be better off influencing it, rather than opposing it totally, in my view.

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I am not totally opposing all change. However I am opposing "revenue neutral" style changes, which would surely see massive reductions on a small proportion of fares that hardly any regular passenger can afford to buy, and many of the affordable fares that ordinary people can afford to buy, increase.

thedbdiboy said:

For longer distance fares, reforms will not lead to overall higher fares because they operate in a competitive market.

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I am aware longer distance operators like Advance fares and will be keen to point out that many people use them, and that they will not increase. This is really about abolishing those pesky 'Saver'/Off Peak fares which give people flexibility. The likes of Virgin were campaigning for that almost as soon as they won the franchise.

thedbdiboy said:

But the ridiculous situation now where retailers and a small group of people in the know can game a fares structure to undercut fares that other passengers pay clearly is not sustainable

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I don't agree that a passenger from (say) Derby to York is "gaming the system" by purchasing the aforementioned affordably priced Derby to Sheffield ticket (in conjunction with another ticket from there to York) which any retailer can easily offer if they wish to do so.

I won't accept any excuses for those fares to increase in price. There is no justification for them to increase. They are normal, ordinary tickets, which many people purchase. No-one purchasing a Derby to Sheffield or Sheffield to York ticket is in any way "gaming the system" and people who buy such tickets must not be asked to pay any more under any new system.

I'm happy if the cost of a single is halved, or if the names change, or whatever else people want to do, as long as the price of affordable fares does not increase.

thedbdiboy said:

- at some point in the future the system will need to change so that if the fare at a particular time is 'x' certain retailers and passengers cannot decide that it will be 'y' instead. Remember that it is the industry's own rules as set by government that dictate fares and then allow them to be undermined, so at some point it will unravel.

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I think this is code to basically say that an expensive operator such as XC should have the right to set a high price for their trains and the idea of inter-available ticketing, which is currently an enshrined right provided by the Ticketing Settlement Agreement, is to be swept away.

I believe some operators are keen on a situation (as documented here: https://www.railforums.co.uk/thread...am-overcharged-on-oyster.202063/#post-4483706 ) in which journeys are priced as the sum of each leg, and any operator can decide on a whim that their leg should be expensive.

It's about control; each operator wants control over its own segment of anyone's journey. It may well become cheaper to make a single journey from (say) Birmingham to Derby, but anyone trying to do a day return journey from (say) Rotherham to Long Eaton is basically going to be forced off rail as a viable form of transport.

yorkie said:

I think this is code to basically say that an expensive operator such as XC should have the right to set a high price for their trains and the idea of inter-available ticketing, which is currently an enshrined right provided by the Ticketing Settlement Agreement, is to be swept away.

I believe some operators are keen on a situation (as documented here: https://www.railforums.co.uk/thread...am-overcharged-on-oyster.202063/#post-4483706 ) in which journeys are priced as the sum of each leg, and any operator can decide on a whim that their leg should be expensive.

It's about control; each operator wants control over its own segment of anyone's journey. It may well become cheaper to make a single journey from (say) Birmingham to Derby, but anyone trying to do a day return journey from (say) Rotherham to Long Eaton is basically going to be forced off rail as a viable form of transport.

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The strong indication from the DfT is that they want to remove fare setting from TOCs, and if this does turn out to be the case, all these arguments about some operators doing one thing and other operators doing another will inevitably change. Whether any fares increase as a result would then be a political decision.
It is important again to restate that interavailable ticketing is not enshrined as a default right in the TSA. The default rights are contained in part 3 of chapter 4 which entitle any operator to set a fare on a service that they operate, either by themselves or jointly with another operator. Part 4 then designates some flows as being subject to Lead Operator rules which the acts to limit the rights of any said operator in respect of their ability to set dedicated fares. All flows in existence on 23 July 1995 were designated to a Lead Operator as start point with the exception of the non-Season London to Gatwick fares, but the Franchising Director has the power to change, amend or delete these subject to the consultation process. Nothing when the agreement was written was intended to confer a permanent state of affairs.
I completely agree that any retailer has the right to offer any combination of fares that is made available for sale in compliance with the relevant Conditions of Travel. The observation I have made is that should fares come under the control of a central body under government then the likely results are much more likely to mimic how British Rail managed fares - for example major anomalies can be swiftly eliminated by either a change to one or more prices or to the conditions applied to the relevant fares.

It seems like the Government/DfT will become like Trainline* and claim to have slashed prices when they're relying on ignorance. I think I can already picture Grant Shapps proclaiming this to loud cheers in the house as I type.

In the case of offering half price singles, which is a good thing for those who don't want a return, or wish to travel in another way A>B>C for example, then the industry can now claim to have slashed fares (and clarify in the small print) by showing the before and after price of carefully selected fares.

For most people who want a return, the fares will be the same as now and with no saving (but as we've seen there can now be added restrictions). Plus once you have a half price single, there's no return (as in London to Edinburgh and other destinations as part of the LNER trial) and so you lose the open aspect of your return.

Now you must buy the single for the correct day - and also lose the benefit of the delay repay for extremely delayed trips where you would get 100% back of your whole ticket. You can only get a refund on a single (unless you know to buy a different ticket, such as London to Haymarket, where you can still get a super off peak return and at the same price) so you'll be much worse off if you're delayed by a couple of hours.

I think we all knew to expect this though.

(* Trainline say you can save nn% as if they can offer a ticket cheaper than someone else, when of course the discount is by selling you a different ticket that is cheaper as anyone else can and does).

thedbdiboy said:

The strong indication from the DfT is that they want to remove fare setting from TOCs,

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Which, in my view, would be a good thing. The power to set walk up* fares should never have been given to TOCs in the first place - the decision to do so is what has caused the vast majority of issues we now have, with different TOCs having increased fares by different amounts, and in some cases changing time restrictions, whilst falsely claiming that the resulting 'anomalies' are all the fault of an antiquated structure inherited from BR.

If DfT/'the government' take on responsibilty for setting fares (and associated restrictions) then who is to 'blame' for changes which are detrimental to passengers is clear and subject to parliamentary scrutiny.

* I have no issue with TOCs setting Advance fare prices for travel on a specific train operated by them (and + Connections, if appropriate).

sheff1 said:

Which, in my view, would be a good thing. The power to set walk up* fares should never have been given to TOCs in the first place - the decision to do so is what has caused the vast majority of issues we now have, with different TOCs having increased fares by different amounts, and in some cases changing time restrictions, whilst falsely claiming that the resulting 'anomalies' are all the fault of an antiquated structure inherited from BR.

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I don't know if I'd go that far, as I rather like a good cheapo LNR walk-up special. But where I'd agree is that for every flow there should be an Any Permitted ticket with all reasonable routes included, for all fare levels.

I guess we can kiss goodbye to Fares regulation then. That would be a real sting in the tail.

Hadders said:

I guess we can kiss goodbye to Fares regulation then. That would be a real sting in the tail.

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I can't remember if back in BR days if fares changed on a set day each year and if it was all fares increased together or some other arrangement?

All on the same day IIRC but they just did what they wanted. There was no regulation. Increasing prices disproportionately was a common tactic used to manage capacity and price people off services.

PG said:

I can't remember if back in BR days if fares changed on a set day each year and if it was all fares increased together or some other arrangement?

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There were (as now) three fares setting rounds - first Sunday in January (from 1977 onwards this became the only time that Seasons and full fares went up following government intervention as during the previous couple of years of runaway inflation there had been multiple price increases); Mid-May for the includion of summer period fares (e.g. for holdiay services); and early September for the off-season fares. However, any fare could be changed at any time if required by BR.

thedbdiboy said:

The strong indication from the DfT is that they want to remove fare setting from TOCs, and if this does turn out to be the case, all these arguments about some operators doing one thing and other operators doing another will inevitably change. Whether any fares increase as a result would then be a political decision....

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This could be a really positive move. If it had been this way all along, a lot of the anomalies would have never been created in the first place. The devil is in the detail though but I am certainly not opposed to this aspect at all!

yorkie said:

This could be a really positive move. If it had been this way all along, a lot of the anomalies would have never been created in the first place. The devil is in the detail though but I am certainly not opposed to this aspect at all!

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But at the cost of accountability. If HM Treasury decide that DfT must raise fares by x%, we’ve no real pushback against that decision, even by comparison to the same decision by a TOC.

Replying here as it seems more appropriate

Hadders said:

Remember - these are the same people (aided and abetted by the DfT) who want to reform fares....

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I suspect the publication of the Williams report may now be well beyond the July date that was last mentioned so the fares reform is IMO unlikely this year, not that I'm complaining...

It's possible that the government will now have a huge impetus to reduce prices once the post Covid-19 recovery begins. We are as yet a long off a recovery effort however so there's little attention on it at the moment.

There will be a clear need to try to encourage uptake once the road to lifting of restrictions is laid out. A significant number of people who've been asked not to travel during the crisis won't return immediately, or in some cases at all. This will partly be driven by those who have very sadly lost lives or jobs, by those who have transitioned into a new economy that doesn't call for daily commuting any more, those who chose to retire once the crisis has abated, and so on and so forth. Though the recovery will be very gradual at first, because there's some need to be slow and steady about the lifting of restrictions, there will be a very very different travel market at the other end of the tunnel. That might make part or even most of Williams irrelevant.

External factors will also have a significant impact, including the price of oil if it remains so low, and the way the airline industry recovers. The travel and tourism industries in general will struggle to pick up on the bow wave of demand - if you're a hairdresser who is closed for 3 months*, you can expect a full salon for weeks as eveyone still wants their hair doing. From a short closure, you might produce the same number of annual haircuts this year. Consumers won't make the same number of train journeys in 2020, though.

Companies like Hull Trains, who've shut down totally, will struggle even more to get through, unless they can provide long advance notice for when they'll resume services and open bookings well before they do. The crisis might not give them that luxury.

*an exceptionally optimistic closure period, admittedly

Starmill said:

if you're a hairdresser who is closed for 3 months*, you can expect a full salon for weeks as eveyone still wants their hair doing. From a short closure, you might produce the same number of annual haircuts this year.

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I don't think that's true. People who have their hair cut once every two weeks or once a month are not going to have more frequent haircuts once the salons are allowed to open.

No, indeed. If the closure period lasts a similar length of time to what the normal interval between purchases is, as I was hinting at with 3-monthly, then you might make a high proportion of them back because everyone wants them done all at the same time.

If the normal frequency you buy something with is much shorter than the closure period, either because you normally buy it often or because the closure is a more realistic 6 - 18 months, there will be far more lost 'haircuts'.

For someone like me who makes 4 - 7 train journeys a week on average, the 'lost' journeys will be absolutely huge, and none will be made back up.

I appreciate though that some people like to have their hair done very much more frequently than me, and most people don't need so many train journeys!

I think the problem a lot of businesses will face after this, rail included, is that this may well be the step change in how people work and live that has been predicted for many years. Lots of people, me included, are discovering that a fair amount of their work can be carried out without any need to travel further than to a different room, and the same will apply to the purchase of many goods and services.