Rail Fares

Alison McGovern Excerpts

Wednesday 5th September 2012 Commons Chamber

[Mr McLoughlin]

I look forward to reading the letter that I shall no doubt receive from the hon. Lady, and I will give a considered response then, as I will have had an opportunity to examine the background of these matters.

[Alison McGovern (Wirral South) (Lab)]

I welcome the new Secretary of State to his position. When he is familiarising himself with his new brief, may I ask him to take a look at the Wrexham to Bidston line? I raised that project with his predecessor on a number of occasions, and I think he will find it a fascinating subject.

[Mr McLoughlin]

Members will have plenty of opportunities to question me over the coming months, and after the hon. Lady has no doubt written to me about this line, I will perhaps have a little more to say about it—and I refer her to the very good line between Derby and Matlock.

We are building a modern railway network in Britain —one that plays its full part in connecting our communities, supporting our economy and safeguarding our environment. We are delivering this crucial work against the backdrop of an inherited debt and the most testing economic times for a generation. But investment by investment, upgrade by upgrade, project by project, we are making real and lasting progress. As we do, at the forefront of our thinking and the centre of our plans are the people and businesses that use, depend on and fund this country’s railways.

I am acutely aware of the concerns that passengers have about fares. That is why we are committed to ending above-inflation increases as soon as we can—once savings are achieved and the wider fiscal situation improves. It is also why we continue to keep the regulated caps under review. Every choice we make and every decision we take is about giving passengers the best railways and getting passengers the best deal. That is what the Government intend to do, and we are undertaking that task.

--- Later in debate ---

[Tom Greatrex]

My hon. Friend makes another important point, which I hope that the Secretary of State will consider as he reads himself into his brief. My experience of getting from airports to stations, particularly when getting a train from Gatwick into London, is that the ticket machines are quite hard to navigate. It is difficult to find the cheaper ticket, which involves travelling on the non-Gatwick Express service. That is just one example that shows that how the ticket machines are set up seems to drive people towards the more expensive fares. I am not sure how that is regulated, but it might be worth considering in the round along with all the other issues.

[Alison McGovern]

Does my hon. Friend agree that that must be considered as part of the Government’s review? The infrequent business user’s train use is limited by such high complexity levels.

[Tom Greatrex]

I agree wholeheartedly with my hon. Friend. I was heartened to hear the Secretary of State’s comments about considering those issues as part of the review and it is very important that it covers all aspects of the matter. The problem is not just the ticket price but access to the tickets and the issues pointed out by my hon. Friend.

We quite rightly hear a lot about the pressure many people are under and about how their incomes are being squeezed. If rail fares become prohibitive at such a time, either for people trying to get to work or for business users, that will mean that people use forms of transport that do more damage to the environment and that restrict aviation capacity. It is very important that the Government carefully consider the levels at which fares can be increased, because although I do not disagree with the Secretary of State about the need for investment—everybody accepts the need for continued investment in our rail services—if the burden is placed too heavily on passengers during this time of economic difficulty, people will be driven away from using the railways. Nobody wants to see that.

I sincerely hope that the Government will consider this straightforward and fairly simple motion. It is about trying to help people at this particularly difficult time and trying to avoid other policy objectives not being met because the fares are too expensive. I know that the Secretary of State’s predecessor said last summer that she was talking to the Chancellor and trying to find a way to limit fares further. It became clear over a relatively short time that some of the Chancellor’s other decisions in the last Budget were not viable or sensible and it would do the Government a lot of good if they reconsidered the decision on fares, which is in danger of having a severe adverse impact on many people across the UK.

[Mr Brian Binley (Northampton South) (Con)]

It is a pleasure to follow the hon. Member for Rutherglen and Hamilton West (Tom Greatrex), who delivered a sensible speech and made some very sensible points. I had sympathy with many of them. While we are in a congratulatory mood, I also congratulate the Secretary of State. He is held in very high regard and with great affection in the House and people will be delighted to see him emerge from the Whips Office into slightly greater glory in the months to come. I hope that he might be kind enough to pass on my good wishes to his Minister of State, my right hon. Friend the Member for Chelmsford (Mr Burns), who is no longer in his place. They make a good team. I am not sure who will look after whom, but we will see as the months unfold. Finally, will the Secretary of State pass on my good wishes to his predecessor, who was especially kind to Northampton? As he will know, she helped to provide the money for a much-needed new station and we remain deeply appreciative.

The debate is a missed opportunity. I understand and have some sympathy with the need for more regulated rail fares. I understand the need to see such regulation as an attempt to put a brake on the sizeable increase in rail fares that started during the Opposition’s period in government and, sadly, continues under this Government, but the truth is that trying to ban train operators from increasing fares beyond a certain point is an unnecessary diversion. The real issue is why the rail industry has not done more to get to grips with cost. Under the previous Government and so far under this Government, it seems to have been accepted that the taxpayer or consumer should finance the rail sector when no attempt has been made to increase efficiency and production and to lower costs. Every business in this country has had to deal with such challenges over the past five years, many of them to great effect, yet the rail industry seems not to be a part of that process.

We have one of the most expensive rail systems in Europe. Why is the rail sector the only privatised sector not to have made progress with cost reduction since its inception as a privatised operation?

[Alison McGovern]

The hon. Gentleman said that we have one of the most expensive rail systems in Europe. Is he talking about the cost per journey? We have much more frequent and dense services than other countries in Europe, but did he take that into account?

[Mr Binley]

I thank the hon. Lady for that question. I am referring to the McNulty report, which her party’s Government put into effect. McNulty made it quite clear that the British rail sector was 28% more expensive than like-for-like rail sectors throughout Europe. If our costs are that high, I hope that the hon. Lady will be as concerned as I am. The alternative is to keep pulling money out of the pockets of the taxpayer or consumer and I want a more productive and efficient rail industry—[Interruption.]

--- Later in debate ---

[Alison McGovern (Wirral South) (Lab)]

It is a pleasure to contribute to what has been an informative debate so far. As a precursor to the few brief points I wish to make, I feel that I should make an admission: I come from a long line of railway people, beginning with my great grandfather and including me, as I have previously worked in the rail industry. I make this confession—that my great grandfather, grandfather and father all worked in the rail industry—not to own up to some kind of strange rail geekery, but rather to explain that I understand some of the practicalities of our rail system and know that changes that seem obvious from the outside can actually be quite complicated and difficult to deliver.

Not least among those considerations is the important fact that the UK rail system was the first in the world. We invented railways, and the impact of that is still with us. The system that we have was designed many years ago, and that brings with it some of the costs. We cannot easily make a like-for-like comparison between our system and those of France or Germany; I am afraid that the UK rail system is just different. We must of course look at ways of reducing costs, but it is not all that straightforward.

[Mr Binley]

Surely the hon. Lady is not rejecting what McNulty said. Surely she accepts the report, authorised by her Front Benchers, which makes a massive contribution to the debate. I hope she does.

[Alison McGovern]

I rarely reject out of hand anybody’s contribution to a debate on so important a subject as the rail industry. I merely make these points as a precursor to what I am about to say. I always feel that we should be cautious in what we say, because I have seen at first hand the complexity of some of the problems we face in running efficiently the kind of extensive rail system we have in Britain.

I want to speak about two things: first, the question of the average fare rise across the fares basket and the restrictions on rises; and secondly, some of the other ticketing issues that rail industry consumers face and what the Government’s ticketing review could consider in order to assist consumers. On the question of the average fare rise versus the cost to travellers of individual fare rises, I have a problem with the Government’s apparent position. The Secretary of State spoke at length only a moment ago about the importance of allowing train companies to raise fares in a way that allows them to maximise yield, but the problem is that that potentially allows significant unfairness. Those whose travel is absolutely necessary for their employment face potentially significant rises, whereas those who have a choice about how they travel are less likely to face those rises. To use an economist’s term, those with an inelastic demand curve—I apologise for my use of jargon, but it may be helpful—are stuck paying ever higher season ticket prices, while those who make up the elastic part of demand can pick and choose, so train companies maximise those yields on what tend to be leisure fares, for journeys that people can choose whether to make. That is the point that many Members across the House are making in different ways.

The problem with allowing average fare rises is that people who cannot choose whether or not to travel by train because they have no practical alternative can be faced with steep rises. The flexibility to do that cannot be allowed. In my view it is not fair. Of course, that is a decision that the Government must make based on the facts. Back in 2009 the then Transport Secretary took a decision, and I support it, because it was about ensuring not only that the train companies were able to do the business they had been contracted to do, but that there was a level of fairness for the travelling passenger.

The Government must think hard about this matter. If consumers who have no practical alternative to travelling by rail are faced with steep fare rises year after year, they will think that it is a significant unfairness to them. Members on both sides of the House have made that point. We need to be clear that this is about different groups of passengers and train companies effectively negotiating their way through to maximise benefits, in some cases for them rather than passengers.

In Merseyside we have quite a specific situation. Travel around the Mersey travel network tends to be more reasonable. However, one of the things we are desperately trying to do is increase job opportunities for people in Merseyside who are perhaps a little further afield. Earlier I cheekily mentioned to the Secretary of State my campaign to improve the Wrexham to Bidston line. It is all about helping people to travel from places in the Wirral and the rest of Merseyside across our city region and further afield, to Manchester or north Wales, to find work wherever it may be.

That is the Government’s stated policy, and they tell us they believe in it. However, with rail fares continuing to increase—my hon. Friend the Member for Rhondda (Chris Bryant) made this point eloquently—those on the lowest incomes will not have an option. They will be unable to take a decision to make what is currently a 90-minute journey from Bebington, Birkenhead, other parts of the Wirral, Southport or the wider Merseyside area to Manchester and other cities, because once they have made that further journey it will be just too expensive. That runs absolutely counter to everything we are trying to achieve to drive up the economic performance of our northern cities. The Government must think carefully about whether their approach to rail fares is not actually against the drive of what they are trying to do across Government.

Secondly, we need to think carefully, perhaps as part of the Government’s ticketing review, about how to ensure that the sale of train tickets and rail travel in general works for the customers, who pay significant amounts. I am particularly interested in how the current set-up harms people working for businesses and organisations who do not use the railways frequently enough to be considered regular or daily users, or even commuters, but do use them frequently enough for there to be a significant impact on their business.

The Government need to pay attention to a couple of aspects. The first is what a peak time is. When I was growing up, it seemed as if we always knew what the peak times were and that they stayed the same year after year. That may be the effect of the rose-tinted glasses of hindsight; perhaps things were different in reality. However, now peak times seem to change all the time.

If a person is travelling on different parts of the network, things can get difficult. For example, if their business, like many businesses in Liverpool and the Merseyside city region area, requires them to go to London one week and Leeds the next, it will be difficult for that person to find out whether the peak times are the same everywhere. The member of staff at Eastham station in my constituency may or may not have in their head the relevant peak times for the ticket.

[Dr Thérèse Coffey (Suffolk Coastal) (Con)]

Having grown up in Liverpool, I know the hon. Lady’s rail line, Wrexham to Bidston, very well; I had family in the area. However, surely people in today’s world just check online—on nationalrail.co.uk or other sites, which will tell them the pricing of tickets for when they want to travel, including for off-peak, super-advance and similar tickets. I am not sure why there is such a complication.

--- Later in debate ---

[Alison McGovern]

I am sure that the hon. Lady is extremely competent at double-checking peak times and the validity of her tickets when she travels, even if she is in a part of the country that she does not know. However, businesses have told me that they find the situation difficult.

The national rail inquiries website is good, but I am not always sure that it is that clear. The better solution would be to print the peak times on the ticket. Surely, in this day and age, we can set up a digital printer that can print the peak times on restricted tickets. People would then not need to make sure that the 3G was working on their phones so that they could look the information up. If it was on the ticket, that would really help people.

[Jenny Chapman]

I completely agree with my hon. Friend. I emphasise that not only digitally incompetent people make the mistake. I am on the east coast main line every week, and there is virtually never a journey when somebody in my carriage does not have to pay an excess surcharge because they have made a mistake to do with the peak, off-peak and super off-peak times.

[Alison McGovern]

“Super off-peak”—there’s an expression. What does it mean? I am a regular train user—a train geek, some have said—but I am not clear when a super off-peak ticket would allow me to travel to Darlington or anywhere else.

We need a more common-sense solution. Although Members of Parliament might have smartphones in their pockets and be able to look things up as they go, a huge number of travellers—particularly older ones, who might be seeking the cheapest possible ticket for understandable reasons—would not be so confident, or would be less likely to go online and look the information up easily.

We need the information to be really clear, not least because there are some strange anomalies in the peak and off-peak scenario, especially in respect of my constituency, which is close to the Welsh border. Services going into Wales have a different peak and off-peak arrangement.

Some years ago, there was a great hurrah when we got a reduction in the number of types of tickets. Now there are supposed to be just four types of train tickets, including advance, off-peak and flexible, so that people can be clear. Personally, I do not think that that works. We need another look. We should either reduce the number of types of tickets or increase the ways in which people can be made aware of the validity conditions of their tickets. The complexity is increased because there are so many vendors of tickets—so many different organisations sell train tickets that the ways in which train ticket validity can be communicated are extremely diverse.

[Mr Mark Spencer (Sherwood) (Con)]

The hon. Lady is making some valid and constructive points about the rail industry. However, the motion that we are debating focuses specifically on the costs to the taxpayer and commuters. Will she get round to talking about the motion rather than about her constructive suggestions for the Department for Transport?

[Alison McGovern]

The costs that passengers face depend on how easily they are able to purchase the most cost-effective ticket for them. Earlier, the Secretary of State said that the whole idea of allowing train companies flexibility was so that they could offer passengers many more lower-price tickets. My point is that lots of people end up paying more because they are confused about the system and have poor access to the information. As my hon. Friend the Member for Darlington (Jenny Chapman) mentioned, all those things imply a cost. If a person has the wrong ticket and is surcharged on the train, that is a greater cost to them. I do not agree with the hon. Gentleman’s assertion that my comments about the types of tickets are irrelevant, because such issues imply a cost. That is why they matter to people.

[Mr Spencer]

Can the hon. Lady estimate the cost saving that printing the peak times on tickets would make to the taxpayer?

[Alison McGovern]

I am good, Mr Speaker, but not that good. I am afraid that I do not have my calculator with me, but I am sure that the issue is worth looking at.

I return to my final thoughts about what needs to be considered in the ticketing review. There is the issue of split ticketing, which has already been mentioned. Those who travel regularly on the railway have a significant advantage over those who do not because they can work out how to split their tickets and save money. If people do that and it is within the rules, good luck to them. However, the situation is confusing. I believe that we should aspire to get more people on to the railways. If tickets are so expensive that people split their tickets to try to make savings, that should be a lesson that we are pricing people away and that the complexity in the rules disadvantages people who do not travel regularly.

To conclude, we need to think about how we can simplify the system. We need to go much further in thinking about the benefits that could be achieved for the travelling public if we thought about the rail system as a whole network. My hon. Friend the Member for Lewisham East (Heidi Alexander) made an extremely valid point about the difficulties of having a Transport for London network right next to a non-TfL part of the network. We need to think about all these things from the perspective of the travelling public rather than that of a complex industry. The rail system will always be complex, but we should make sure that the public-facing part of it is as simple and straightforward as possible.

By and large, we are at risk of curtailing the prospects of employment and economic growth if we do not take seriously the need to make rail fares much more affordable.