Rail Fares

Lord Sharma Excerpts

Wednesday 11th January 2012 Commons Chamber

[Maria Eagle]

I want to make a few points about what I have heard from passengers and will try to give way to the hon. Gentleman later.

Secondly, passengers want a legal right to be offered the cheapest ticket for the journey they wish to make, and they do not think that it is too much to ask that the cheapest fare must be clearly advertised. Should passengers not be entitled to a refund if they have not been sold the cheapest ticket?

Under this Government, it is to become harder to buy the cheapest ticket if plans to replace staff with machines and close all 675 category E station ticket offices are implemented, yet that is what Ministers are considering, along with cutting the opening hours of 302 category D station ticket offices. All the evidence suggests that many people are not sold the cheapest ticket when they buy a ticket online or from a machine.

Thirdly, passengers have told us that they want the cheapest fares to be available wherever tickets are sold, yet the cheapest fares often appear to be available only online. Should not the same fare structure apply to tickets purchased at train stations and other outlets as applies to those bought online, ending the digital divide that is arising and increasing costs for older passengers, in particular?

Fourthly, what really annoys rail users is when they make a genuine mistake or are forced to change their travel plans but find themselves treated as a common criminal in front of other passengers and required to get out their cheque book and cough up. Of course we have to protect revenue, but we also have to have some common sense. Within the same period of the day, there has to be greater flexibility to vary plans, even on pre-booked tickets. Trains are not airlines, and we do not wish to go down the road of airline-style ticketing, with no cheap walk-on option.

Finally, passengers told us—

[Alok Sharma (Reading West) (Con)]

Will the hon. Lady give way?

[Maria Eagle]

If the hon. Gentleman will just let me get to the end of my points, I may give way to him.

Finally, passengers told us that they understand that sometimes a track has to close, such as for essential work, to keep our railways safe, but when a rail replacement service makes their journey longer, often adding considerable inconvenience, they want to know why their ticket costs the same. They can apply for a discount if their train is delayed, but not if it turns out not even to be a train and ends up being a bus.

Those are all ideas that we are looking at seriously, because for too long Governments have let the train companies get away with treating passengers in a way that would not be permitted in other industries.

--- Later in debate ---

[Maria Eagle]

No, I am going to make some progress.

[Alok Sharma]

On that point?

[Maria Eagle]

I said that I am going to make some progress.

For too long, Governments have let the train companies get away with treating passengers in a way that would not be permitted in other industries. The previous Transport Secretary described rail fares as eye-watering and rail services in Britain as a “rich man’s toy”, yet he failed to understand that the policies of his own Government are making the situation worse.

[Alok Sharma]

Will the hon. Lady give way?

[Maria Eagle]

No.

Next year’s fare increases are set to be even higher—not 1% but 3% above inflation, with the same again in 2014. Unless the Government are willing to stand up to the train companies, and unless they are willing to take on the vested interests and remove the right to add another increase of up to another 5% on top of this year’s so-called cap, commuters next year will face fare rises of up to 13%, with another 13% the year after. That is happening at a time when average incomes are plummeting. Over three years, some tickets will rise by almost one third as people’s real incomes fall by 7.5%, yet the Government seem completely out of touch with the impact of that on households.

Season tickets are heading rapidly towards £10,000 a year on some routes into London once underground travel is included; families are now paying more on commuting costs than on the mortgage or rent; and ticket price rises are outstripping wage increases several times over, if people are fortunate to see a wage increase at all. That is the cost-of-living-crisis facing households throughout the country. Rent levels are going up; energy and water bills are rising relentlessly; bank charges are extortionate, as the cost of living means overdraft limits are breached; and the cost of transport is rising.

--- Later in debate ---

[Lilian Greenwood]

I will not give way at the moment.

We have heard about shoppers finding that they have less to spend when they get to the shops or the market because bus fares have gone up, about small businesses struggling with the high cost of petrol, and about mums and dads having to find more money from the family budget to help teenage sons and daughters pay to travel to college because they have lost their education maintenance allowance and the fare concessions they used to get have been cut. Parents are having to get the car out to take their children to school, even if they cannot really afford to, because school transport has been cut. As has been said, that does nothing to contribute to the green agenda.

The cost of living crisis is hitting hardest those who are least able to withstand it and is made worse by the decisions that the Government have made, which show that they are out of touch with the concerns of ordinary families. When so many people are struggling to pay their bills and make ends meet, only a Government who are completely out of touch with these concerns would allow inflation-busting increases in rail fares, yet that is exactly what this Government have done. They were forced to back down on their original plan to increase rail fares by inflation plus 3% this year, but passengers will still face those rises in January 2013 and January 2014.

When passengers heard the Chancellor’s autumn statement, they understandably expected that the most they would have to pay this year was an extra 1% above inflation, but they soon found that they were wrong, because the Government gave private train companies the right to increase some tickets by an additional 5%, something that Labour banned in government precisely because we understood the pressures commuters face in tough economic times.

[Alok Sharma]

At the start of the debate the hon. Member for Garston and Halewood (Maria Eagle) made a spending commitment to keep fares down. Will the hon. Lady tell us where the money for that would come from and, assuming she does not wish to increase the national debt, what she would cut to fund that commitment?

[Lilian Greenwood]

I am not making any spending commitments this afternoon. The real question needs to be addressed by the Minister, which she might do when summing up. She needs to address the point, made by the National Audit Office, that rather than protecting taxpayers or paying for the investment described by the hon. Member for Milton Keynes South (Iain Stewart), the flexibility will boost the profits of train operating companies. How will she tackle that?

As my hon. Friend the Member for Glasgow South (Mr Harris) rightly said, rail services flourished under Labour, with more services, more passengers and better punctuality than ever before. He also noted that Lord Adonis stood up to train operators and removed this flex. Lord Adonis stated in evidence to the Transport Committee:

“In a time of economic stringency I do not think it acceptable for individual commuters to face significantly above-average fare increases. The Government’s intention is, therefore, that in future the cap should apply to individual regulated fares, not just to the average of each fares basket.”

He said “in future” and nothing about it being for one year.

The Prime Minister might say that he wants to tackle crony capitalism, but actions speak louder than words. His Government have shown that they are on the side of private train operators, rather than passengers, letting them increase some fares by as much as 11% with no guarantee that the money will lead to a better deal for taxpayers. As I have said, the NAO has warned that that could simply result in higher profits for train companies. The Government also know how difficult it is for passengers to navigate their way around complex fare structures to find the cheapest tickets, but they will not rule out getting rid of the very ticket office staff who can help and advise people, particularly those who are unable to find the best offers online or by using a ticket machine.

If things are bad for rail users this January, bus users might say, “Look at the year we’ve already had.” The Transport Committee called the 2010 comprehensive spending review

“the greatest financial challenge for the English bus industry for a generation”.

Alongside rising fuel prices and a depressed economy, many bus operators have had no option but to raise fares, cut services or both. What have the Government done to help bus users, many of whom are among the least well-off in society? They have cut transport funding to local councils by 28%, a loss of £95 million in 2011-12 alone. They have changed the way in which the concessionary fares scheme is funded, taking a further £223 million away from local authorities in the past year, and they have decided to cut the bus service operators grant, the fuel rebate to bus companies, by 20% from April.

If we add those changes together, we find that the result is devastating. Fares are going up, one in five supported bus services has been scrapped and the Campaign for Better Transport has collected examples of more than 1,100 bus services that have already been lost in the English regions. Whole communities have been left isolated without access to public transport, and almost three quarters of local authorities have been forced to cut or to review school transport provision.

Older people, who are protected from fare rises, having benefited enormously from the free bus pass introduced by the previous Labour Government, are finding additional restrictions on when they can travel and, particularly in rural areas, that the service they relied on has disappeared. The Prime Minister may have promised to keep the free bus pass, but it is of little use if people have no local bus to travel on.

Time and again we see this Government choosing to implement policies that have a disproportionate impact on the very people who most need to be protected in harsh economic times: older people and disabled people, who often do not have the choice to use a car; and the unemployed, who are already paying the price of this Government's economic failure. Some 64% of those seeking work do not have a access to a car, so they rely on buses to get to interviews and jobs. As my hon. Friend the Member for Lewisham East (Heidi Alexander) said, how will they access job opportunities or stay in work without public transport and how can work pay if travel to work is not affordable?

We heard about young people, 72% of whom rely on buses to get to college and to give them independence. They are already struggling without their education maintenance allowance, or are facing a threefold increase in tuition fees, so it is little wonder that colleges report a fall in admissions, and that the UK Youth Parliament made cheaper, fairer and more accessible public transport its No. 1 issue for 2012.

For the one in 10 people in rural areas who do not have access to a private car, a bus is essential to get to the nearest shop, doctor or post office—not that car users have done much better. For all the Government’s talk of fuel stabilisers in opposition, one of their first acts was to increase VAT to 20%—immediately putting petrol prices up by 3p a litre and adding an extra £1.35 to the cost of filling up the average car.

The Government claim that those changes are all in the name of deficit reduction and that there is no alternative. That is not so. What is required is the determination to stand up to vested interests and to powerful lobby groups. We have already set out how we would ease the pressure on households from the rising costs of transport—not by increasing spending, but by banning private train companies from averaging out the cap on fare rises. That would mean a maximum increase of inflation plus 1% this year, not increases of up to 11%.

My hon. Friend the Member for Garston and Halewood (Maria Eagle) also set out how we are considering other options to ensure that passengers are protected from unfair pricing, including a single definition of peak and off-peak; a right to the cheapest ticket; a right to a single price for the same ticket; a more flexible way of changing one’s travel plans; and a right to a discount when a rail replacement bus service is put on.

Labour’s policy review is looking at all options for reforming the structure of Britain’s rail industry. We need root-and-branch reform of its costly fragmented structure, and we need a better deal for taxpayers and passengers. We also want to devolve more transport responsibilities, so that more decisions are made locally by integrated transport authorities with powers to deliver local bus services in a way that best suits each community, ensuring that the needs of local people are met and that fares are affordable. For young people who are aged 16 to 18 and in education, we want to see a concessionary fares scheme delivered by the major bus companies in return for the subsidies that they have received.

In the transport spending review, the Government recognised:

“Transport provides the crucial links that allow people and businesses to prosper”.

Well, people and businesses are suffering as a result of their poor decisions. Yesterday, we, like the hon. Member for Fylde (Mark Menzies), welcomed the good news about High Speed 2 and the Government’s commitment to long-term investment in our infrastructure, but they must face up to the here and now. They need to listen to passengers and start taking action to tackle the quiet crisis facing people the length and breadth of this country.