Railways (Penalty Fares) (Amendment) Regulations 2022
(Limited Text - Ministerial Extracts only)
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The Parliamentary Under-Secretary of State, Department for Transport (Baroness Vere of Norbiton) (Con)
My Lords, I am enormously grateful to the noble Lord, Lord Shapps, for giving your Lordships’ House and indeed me—
Baroness Vere of Norbiton (Con)
I deeply apologise to the noble Lord, Lord Snape, for getting his name wrong.
This is a great opportunity to be back once again in front of your Lordships’ House to discuss trains, train fares, train ticketing and, of course, train services. I very much appreciate all noble Lords’ contributions this evening.
The regret Motion tabled by the noble Lord, Lord Snape, is linked to a statutory instrument relating to changes to penalty fares. This was laid in your Lordships’ House in October 2022 and comes into force on 23 January 2023. I will provide a little bit more context to ensure that noble Lords are aware of what this SI does. From 23 January 2023, the new penalty fare on the rail network in England will be £100 plus the price of a single fare to the passenger’s intended destination on that train. It is not the £100 alone; there is an additional amount, which will take into account the journey travelled. Another thing to understand is that the £100 penalty is reduced to £50 plus the price of the single fare if it is paid within 21 days. I hope that people will take advantage of that opportunity.
As noted, the penalty fare is currently either £20 or twice the full applicable single fare to the next station that the train calls at, whichever is greater. That sounds a bit more complicated than what we will now have, which offers great clarity to passengers. As noted, the value of the penalty fare has not changed since 2005, which is nearly 20 years ago. It was in response to growing concerns about the impact of this real-term decline in the value of the penalty fare that the Government consulted on these changes to penalty fares in March 2021. The consultation indicated that the £20 value of the penalty fare was just too low to be an effective deterrent and that it should be increased.
The change was put into place to ensure a more effective deterrent. This should reduce the cost of fare evasion from passengers travelling without a valid ticket while ensuring that honest, fare-paying passengers are not unfairly penalised. An estimated £240 million is lost annually due to fare evasion on GB railways. This change aims to reduce the burden on the taxpayer while ensuring that it is fair on the travelling public as well.
Staff who issue penalty fares are trained and authorised in the procedure and are allowed to use their discretion on whether to issue a penalty fare. This helps to mitigate the impact on those passengers whose intention was not to avoid paying but, for whatever reason, have a ticket that does not match their intended journey. The noble Lord, Lord Snape, came up with many examples where this sort of discretion would absolutely be used. Therefore, we do have the flexibility under the new penalty regime as it was under the old penalty regime. In that regard, not much has changed. We will have to put Peel to one side in this case, because it is not an absolute certainty that if one is on a train with a ticket that does not match your intended journey, you will get a penalty fare. There may be reasons why it would not be appropriate. That is fair on passengers and provides the best experience to the travelling public.
However, should a passenger receive a penalty fare and feel that it is really not appropriate, there is a robust appeals process, which was introduced in 2018. That provides a further level of protection for passengers who feel that they have been treated unfairly. This appeals process has three different levels, and the third appeal is considered by an independent panel of three members, none of whom was involved in the handling of the previous two appeals.
It is for train operating companies to manage fare evasion on their services and there are a number of measures that they can use to do this, including penalty fares and unpaid fare notices. Avanti West Coast, for example—a favourite of the noble Lord, Lord Snape—chooses not to issue penalty fares, but it has alternatives. A passenger on an Avanti West Coast service who is unable to produce a valid ticket while travelling may need to purchase a full-price anytime ticket with no discount. As an alternative, they may be issued with an unpaid fare notice requiring them to pay the fare within 21 days. We are trying to set out here how a bit of flexibility is necessary and that a one-size-fits-all process for every service across England will not work.
There is a bit of flexibility to tailor overall revenue protection activity and adjust the action taken to a single passenger, dependent on that passenger’s circumstances. It is not in anyone’s interest for a TOC to operate a universally heavy-handed approach to all passengers travelling with an incorrect ticket. However, TOCs have a right and justifiable obligation to target those passengers who knowingly travel without a valid ticket. In those circumstances, it is right that the passenger without a ticket is appropriately penalised. This acts, among other things, as a deterrent.
The noble Lords, Lord Berkeley and Lord Snape, raised the issue of the incentives on TOCs to collect revenue. After all, it is not their revenue in the end. The department works with TOCs to ensure that ticketless travel surveys take place biannually to allow revenue protection teams to target known areas of fare evasion to have the maximum effect. Part of the payments made to operators is based on the outcome of those surveys.
The noble Baroness, Lady Randerson, asked me some questions about Wales. While I have some information about that, I would rather write a letter with a fuller explanation, if that is okay. I will try to include what Wales is doing and any discussions with the Welsh Government.
The noble Lord, Lord Tunnicliffe, raised the issue of communication, and I agree with him that it is really important that passengers know about these changes and so do rail staff. That is already well in hand. The Rail Delivery Group is leading work with the train operating companies on communications materials, which will include posters, signage, leaflets at stations and websites. The Rail Delivery Group will update its guidelines to reflect the new penalty fares regulations.
The noble Lord highlighted the complexity of ticketing, as set out in Modern Railways magazine—not a magazine with which I am hugely familiar. But tickets in England are hugely complicated and, sometimes, when one is booking online, one may not get the best option. I will make sure that officials look at the points raised by the noble Lord, Lord Berkeley, about systems that were considered in the past and how we might roll them out.
The Government remain committed to radically reforming and improving the passenger experience of fares, ticketing and retailing on the railways. We want to simplify the current mass of complicated fares and tickets, while protecting affordable turn-up-and-go tickets and season tickets. There is much work in this area and there will be a real transformation in the way rail travel is bought, paid for and experienced. Removing complexity in ticketing systems will allow all related systems to be simplified to help reduce cost.
I reassure noble Lords that no passenger will be left behind. We will make sure that we serve those who use cash or those who do not have access to a smartphone or the internet. We need to make sure that they too can buy a ticket or access help to buy a ticket at the train station. We are working very closely with the Great British Railways transition team and the sector to build this better ticketing system and a better railway. We will take that further in due course.
Lord Berkeley (Lab)
I am very grateful to the noble Baroness. She has given us a very interesting response to many of the questions that noble Lords have raised but, so far, has not mentioned what has happened to the Bill that was promised and mentioned in my noble friend’s Motion, which we are debating. Can the Minister give me some indication of why the Department for Transport has had this proposal to simplify ticketing, by using IT and everything else, for a year? It would save a great deal of money and give people a lot of confidence. According to some people I have talked to, this does not need legislation. I believe that the noble Lord, Lord Hendy, has also said that parts of the Bill do not need legislation, so why can we not do that? I appreciate that the Bill is late—we could have a long debate about that—but what is holding this up, if it does not need legislation? I am told it is opposition from the train operating companies, but who is in charge? Minister, you are in charge.
Baroness Vere of Norbiton (Con)
Oh, good! I take the noble Lord’s point. I was going to spell out a number of things that do not require legislation. We want to legislate and we must do it when parliamentary time allows, but there are many things that we can do without legislation. I will take back the specific point about the ticketing system and maybe write to the noble Lord and all who spoke in the debate to see if I can find a little more clarity on that.
While I am on a roll on this, the noble Lord, Lord Tunnicliffe, mentioned long-term planning, which is one of the things that we do not need legislation for and which we have been thinking about. We are developing for publication the first draft of a long-term strategy for rail. I am sure noble Lords will appreciate the opportunity to debate that when it is published, because it sets out a long-term vision for our rail system over the coming decades.
To conclude, the vast majority of passengers who travel on our railways have the right ticket. If they do not, there are understandable circumstances. We accept that there is flexibility in the services that the train operating companies offer. However, we believe that the increase in the penalty fare is a sensible measure to discourage travel without a valid ticket, because it is simply not fair on other passengers or the taxpayer.
I am grateful to the noble Lord, Lord Snape, for the debate today. I have no doubt that I will be back at this Dispatch Box to discuss the railway system again, and I look forward to it.
Lord Snape (Lab)
My Lords, I am grateful to those noble Lords who participated in the debate. My noble friend Lord Berkeley reminded me of my failure to mention split ticketing. I could have said how desirable it is to stop that particular practice, although it is understandable that those in the know know how to do it. The magazine to which I referred set out a case of a passenger who was in the know, who used split ticketing to get from London to Edinburgh and back, but he needed 18 different tickets to do it. Such a system is nonsensical.
The noble Baroness, Lady Randerson, who speaks for the Liberal Democrats on these matters, was right to point out the disparity between the rate of inflation in 2005 and the fivefold increase in penalty fares, to £100, that the Government propose. The Office for National Statistics informs me through my mobile phone that £20 in 2005 was worth £34.52 at the end of 2022. That is a hell of a difference between £20 and £100, plus the cost of the single fare on top of the penalty, as we were reminded. So it is a pretty indiscriminate increase, presumably plucked out of the air. The Minister did say in conclusion that people had been consulted since 2021 about this increase: she did not tell us who had been consulted, and I just wonder whether Mr Anthony Smith from Transport Focus had been, because I do not think that most passengers would approve.
I am grateful again to my noble friend Lord Tunnicliffe from the Front Bench, and beg leave to withdraw the Motion.