Will rail fares continue to increase every year until a point UK cant afford to travel

[Wallsendmag]

You could work for the railways and get a 75-100% discount on commuting.

That's what I do

 

[nickswift99]

You could work for the railways and get a 75-100% discount on commuting.

Or you could drive. The economics of a commute from the Thames Valley mean that it is more cost effective if commuting less than 5 days a week to drive into London. This includes cost of parking, fuel, depreciation and wear and tear on a car.

Oh, and I'm guaranteed a seat on the way home, the air conditioning always work and off peak the door-to-door journey time is significantly quicker. During the peak, timing differences are marginally in favour of the train but that's only if GWR run to time.

 

[Bletchleyite]

Or you could drive. The economics of a commute from the Thames Valley mean that it is more cost effective if commuting less than 5 days a week to drive into London. This includes cost of parking, fuel, depreciation and wear and tear on a car.

Oh, and I'm guaranteed a seat on the way home, the air conditioning always work and off peak the door-to-door journey time is significantly quicker. During the peak, timing differences are marginally in favour of the train but that's only if GWR run to time.

I did actively consider this when in the early days LM went through a *very* bad patch and the stress it was causing was doing me no good. I still concluded that the stress of driving would be much, much worse, the only sensible driving-related workaround I could come up with was driving to Aylesbury and taking Chiltern.

 

[kristiang85]

As I said in one of the other threads, I totally forsee rail travel going into decline very soon.

In the past, large price rises have been followed by a fall in passenger numbers. This is evidenced as happening now although will take longer to see what the effect is.

Already this year, we are seeing a 9% drop in season tickets. Although individual ticket sales are going up, this is probably due to the season ticket holders simply travelling less, so I expect this to plateau in 2019/20. The main difference between now and past price rise times is that these days many commuters have access to flexible working and technology to enable them to work from home more, and this is only going to become more prevalent - certainly employers see the value in a) employees not wasting their time on late trains, too crowded to work, and b) freeing up office space, and obviously it benefits employees, particularly those with families (I've got one colleague who now almost exclusively works from home as train + childcare came to more than her daily wage).

I see a rocky road ahead for many franchises, especially the likes of SWR, as they just will not have factored these drops in their financial planning.

 

[Hadders]

I think some of the decline in season ticket sales is due to people switching to contactless in London.

Many of my colleagues aren’t always in the office 5 days a week - sometimes they might be working from home or another location. Combine this with 5-6 weeks holiday, bank holidays, a few days when you might start late or finish early so can pay off peak fares, no need to faff with daily tickets etc and all of a sudden a traditional season ticket isn’t as viable.

 

[tbtc]

It's reasonable to complain at the continued use of RPI. The government ditched RPI in favour of CPI in 2013. To quote from the ONS:

There are various issues with RPI but the main one seems to be that it is too closely tied to house prices, and the rise in house prices doesn't have much direct impact on the amount of cash most people have.

According to Swanlowpark, £1000 in 2012 at RPI is now worth £1187; at CPI is now worth £1121. In other words, it's now about 5.5% lower. So an annual Brighton to London season ticket, for example, would be £222 a year cheaper at this measure.

I'd be fine with ticket prices rising by CPI if other railway costs are rising by CPI, but the Unions didn't seem particularly keen on Grayling's plan to do so when it came to staff wages.

But even CPI is only going to be slightly lower (maybe 2%pa vs 3%pa, looking at the figures you've quoted above) - if people think that 3%pa is "eye watering" then they'll probably make similar noises about 2% - I'm not sure that any increase will be acceptable to the kind of "angry mob" that the tabloids love to quote on such articles.

The switch from RPI to CPI for pensions made sense, since most pensioners aren't buying houses or paying full council tax, but rail fares are a little different.

 

[cholsey-choose]

I'm sorry: you have misunderstood what (and whom) I was driving at.

I'm sorry: you have misunderstand my (admittedly lame) joke.

 

[LAX54]

You could work for the railways and get a 75-100% discount on commuting.

only you work for a TOC, NR / FOC's do not get any reduced rate (except ex BR staff)

 

[Ianno87]

only you work for a TOC, NR / FOC's do not get any reduced rate (except ex BR staff)

NR get a 75% subsidy on season tickets for commuting (up to a maximum subsidy of about £2,500 or so).

 

[kristiang85]

I'd certainly be up for a rule where an operator has to hit certain performance targets (outside of NR issues) otherwise they will be blocked from putting up their inflation-based fares; then maybe a mechanism where a certain poor annual performance threshold by NR-related delays is also compensated from NR's pocket to the TOC who in turn compensate passengers (like Delay Repay, which we know isn't fully claimed).

Yes it means less money for the railway as costs go up, but with poor performance and rising prices it will lose money anyway. Maybe ensuring that passengers do feel they are getting some recompense for their lost time will keep them paying for rail tickets rather dusting off the car or getting their flexible working paperwork sorted.

 

[Emyr]

The ideological drive to eliminate public funding of rail travel is unhinged. Government should count funding the railways as an investment in both reducing total emissions and also in road capacity, since you'll get an extra car on the roads for (approximately) every 1-2 passengers priced off rail.

 

[ForTheLoveOf]

I'd certainly be up for a rule where an operator has to hit certain performance targets (outside of NR issues) otherwise they will be blocked from putting up their inflation-based fares; then maybe a mechanism where a certain poor annual performance threshold by NR-related delays is also compensated from NR's pocket to the TOC who in turn compensate passengers (like Delay Repay, which we know isn't fully claimed).

Yes it means less money for the railway as costs go up, but with poor performance and rising prices it will lose money anyway. Maybe ensuring that passengers do feel they are getting some recompense for their lost time will keep them paying for rail tickets rather dusting off the car or getting their flexible working paperwork sorted.

This was the approach taken to regulated London commuter fares back in the early years of privatisation. It was quietly dropped when fares regulation was reviewed in 2003/4, with the alleged claim that it didn't work because performance and fares changes were not linked quickly enough, and thus it was not a very effective measure.

I think it's probably a better way of doing things (if it's organised well, and for example regulated fares went to being adjusted three times a year), but unfortunately I think it's very unlikely to happen.

 

[35B]

It's reasonable to complain at the continued use of RPI. The government ditched RPI in favour of CPI in 2013. To quote from the ONS:



There are various issues with RPI but the main one seems to be that it is too closely tied to house prices, and the rise in house prices doesn't have much direct impact on the amount of cash most people have.

According to Swanlowpark, £1000 in 2012 at RPI is now worth £1187; at CPI is now worth £1121. In other words, it's now about 5.5% lower. So an annual Brighton to London season ticket, for example, would be £222 a year cheaper at this measure.

I’d go further, and object to the use of any inflation index as the basis for fare rises. That index contains myriad data points, and is an average of rises across the economy. To suggest that one particular product or service should match that index is both illogical, and perpetuates the idea that the railway are entitled to rises. My employer, and most others, have to set prices based on a mixture of cost changes and what the market will tolerate. This puts downward pressure on costs and helps drive efficiency. The railway is not getting that pressure.

 

[LNW-GW Joint]

Every year around this time the government/rail delivery group announce that rail fares will increase in the new year so will this happen every year until as such time that rail travel will be so expensive no one can afford it anymore

As far as I can see, passenger figures have continued to rise for 20 years or so, despite continual "RPI+x" fare rises.
So I don't see how you can say fare increases drive people away (it might reduce overall demand, but that is part of the policy).
Whether this is sustainable, time will tell.
Con, Coalition and Lab have all followed a policy of upward pressure on fares over that period, both in the formula used and in the off-peak time restrictions imposed.
TOCs will also point you at fares (notably Advances) that are cheaper now than they were under BR.
There are also plenty of fares (mainly off-peak) which are better value than those on the continent (where nearly all fares are effectively Anytime).

 

[Baxenden Bank]

Every year around this time the government/rail delivery group announce that rail fares will increase in the new year so will this happen every year until as such time that rail travel will be so expensive no one can afford it anymore

Rail fares have hardly increased for 20 years. Since 1997 some years with RPI+0%, some with RPI-1%, some with RPI+1%. On balance just five years of +1% increases in 20. Not bad compared to the price of many other things in life. Daily newspapers, a pint of beer, council tax, BT costs. All roaring ahead far greater than RPI.

I find it disturbing that all the so-called journalists on so-called news outlets (print, audio and visual) are entirely incapable of doing this analysis themselves. Lazy click-bait journalism to get people on-side regardless of facts. Oh and the same people are 'informing' us on the Brexit debacle.

 

[sprunt]

Yes, TfL has had a funding cut from central government as well.

A 100% cut, it's worth mentioning. And the man who did it now publishes articles in his newspaper bemoaning the state of TfL's finances as if it's nothing to do with him.

 

[Journeyman]

The price of things goes up year after year. It is called inflation. The bread I buy has gone up from 50p to 53p to 55p in the last year.

It always amazes me how every year people get so shocked and outraged that rail fares increase. Just like everything else does.

I know, it happens every single year, and yet people still act surprised. In answer to the OP's question, there's been significant rises in passenger numbers in recent years, so fare rises clearly aren't putting a lot of people off.

 

[Journeyman]

Our walk-up fares are higher than they should be, for many journeys, because our policy in this area is not as good as that of many other European countries.

The flip side of the coin is that a lot of our advance fares are incredibly cheap.

 

[cholsey-choose]

The flip side of the coin is that a lot of our advance fares are incredibly cheap.

Is that really so -- are there any good statistics about this? Certainly in Germany you can get extremely good long distance advance special fares.

 

[Bald Rick]

Is that really so -- are there any good statistics about this? Certainly in Germany you can get extremely good long distance advance special fares.

Well, 25 years ago, the cheapest single fare between Birmingham and London was about £20 from memory. Now, you can do it for £7. Possibly less, I only looked at one day.

 

[Bald Rick]

I don't quite understand how a fare freeze and the hopper fares would create such a budgetary black hole, and surely the hopper fare should even encourage more bus patronage? Have there been cuts from central government which have largely contributed to the deficit?

TfLs fares revenue from bus, rail and LU totals about £4.5bn pa. If RPI is 3%, then a one year fares freeze means £105m pa lost income, for ever. A four year fares freeze means it loses £105pa in year one, £213m in year 2, £325m in year 3, and £439m in year 4 and every year thereafter. After allowing for ancillary income, thats effectively an 8% cut in funding. Meanwhile staff costs (approx one third of all costs) tick up at RPI or more, squeezing the other end.

The main squeeze is on borrowing, as the fares freeze causes a cut in projected future income, which affects the ability to borrow now to fund capital projects now. Hence why a whole raft of schemes have been quietly pushed backwards or even stopped.

 

[cholsey-choose]

Well, 25 years ago, the cheapest single fare between Birmingham and London was about £20 from memory. Now, you can do it for £7. Possibly less, I only looked at one day.

Actually you can do it for £5.50 on 09 Jan!
Advance Show Other tickets
12:10 London Marylebone [MYB] Platform 1

Birmingham Moor Street [BMO] Platform 4 13:56 1h 46m 0 More Details on the 12:10 service from London Marylebone to Birmingham Moor Street

The collapse of the pound has also made British rail journeys a lot cheaper in comparison. eg now, you get 1.12 euro to the pound; back before the Brexit referendum it was more like 1.26, so it's like 10% more expensive for Brits to travel in Europe.

Of course back in May 2005, it was 1.47 euro to the pound, but let's not think about that it's too depressing!

 

[cholsey-choose]

TfLs fares revenue from bus, rail and LU totals about £4.5bn pa. If RPI is 3%, then a one year fares freeze means £105m pa lost income, for ever. A four year fares freeze means it loses £105pa in year one, £213m in year 2, £325m in year 3, and £439m in year 4 and every year thereafter. After allowing for ancillary income, thats effectively an 8% cut in funding. Meanwhile staff costs (approx one third of all costs) tick up at RPI or more, squeezing the other end.

The main squeeze is on borrowing, as the fares freeze causes a cut in projected future income, which affects the ability to borrow now to fund capital projects now. Hence why a whole raft of schemes have been quietly pushed backwards or even stopped.

Actually doesn't this even understate things? Because percentage increases are compounded, the amount lost per year will continue to rise.

 

[Bald Rick]

Actually doesn't this even understate things? Because percentage increases are compounded, the amount lost per year will continue to rise.

In a way yes. But actually it overstates things, as not all fares income is frozen. Nevertheless, the effect is very significant. If the Mayor tries a fares freeze for the next election, then he will no doubt be presented with a very large list of services and projects he will also need to cut.

 

[BigCj34]

In a way yes. But actually it overstates things, as not all fares income is frozen. Nevertheless, the effect is very significant. If the Mayor tries a fares freeze for the next election, then he will no doubt be presented with a very large list of services and projects he will also need to cut.

It would look like the Mayor is banking on an increase in patronage on the existing services to measure if it is successful, and this may well be more pertinent in outer London where public transport is less of a captive market. The Hopper fare may well convert more users. However as public transport is a captive market in central London then fares are being cut for journeys that would probably be made anyway.

Are there any studies where fare freezes led to a direct increase in patronage that outweighed population growth?

 

[Bald Rick]

It would look like the Mayor is banking on an increase in patronage on the existing services to measure if it is successful, and this may well be more pertinent in outer London where public transport is less of a captive market. The Hopper fare may well convert more users. However as public transport is a captive market in central London then fares are being cut for journeys that would probably be made anyway.

Are there any studies where fare freezes led to a direct increase in patronage that outweighed population growth?

Patronage is down in London, particularly on the buses.

 

[NoOnesFool]

If it got *too* expensive, commuter coach services would start becoming viable again. Or people would live nearer work, which would be no bad thing (and work would have to move out of expensive places like London, again no bad thing). Or more remote working.

Could you explain wwhat a commuter coach service is please?

 

[Bletchleyite]

Could you explain wwhat a commuter coach service is please?

A road coach service aimed specifically at commuters, there used to be a lot of them into London, still a few left.

 

[NoOnesFool]

A road coach service aimed specifically at commuters, there used to be a lot of them into London, still a few left.

Thanks, was this National Express or things like Greenline? I'm just interested as I've not heard of coach travel aimed at regular commuters before.

 

[Bald Rick]

Thanks, was this National Express or things like Greenline? I'm just interested as I've not heard of coach travel aimed at regular commuters before.

There’s quite a big operation from Medway / Maidstone to London, run by The Kings Ferry coach co.