Flexible Ticketing: Rail Transport

Claire Perry Excerpts

Thursday 10th March 2016 Commons Chamber

[James Cartlidge]

Another excellent point.

What is to be done? To go back to my constituents, Deborah suggested this:

“A system whereby a commuter could, say, buy 10 day returns for the price of 6-7 would really encourage the flexibility that the modern work force needs when juggling work and family life.”

There is a word for what she proposes—it is “carnet”—and I must confess that, when I lived in Barnet, I used a carnet. [Laughter.]

[The Parliamentary Under-Secretary of State for Transport (Claire Perry)]

It’s “car-nay”.

[James Cartlidge]

In French it is a “car-nay”; in Barnet, we called it a “car-net”. It was a small book of tickets that were usually valid for up to three months on the tube, which was very handy and convenient when I was teaching English as a foreign language and did not know which days I would be working. Of course, that has been phased out now that we have moved to the Oyster system. The key problem with the previous system was the absence of technology. If we want flexible ticketing, we need the technology, as my hon. Friend the Member for North East Hampshire (Mr Jayawardena) has said.

--- Later in debate ---

[The Parliamentary Under-Secretary of State for Transport (Claire Perry)]

I was wondering when the Adjournment would be moved formally again, but I will get started in the interim. May I start by—

--- Later in debate ---

Motion made, and Question proposed, That this House do now adjourn.—(Sarah Newton.)

[Claire Perry]

I am a former Whip, so I know the tricks. I should say that I will not take all of the remaining time.

I want to commend my hon. Friend the Member for South Suffolk (James Cartlidge) for securing this debate. His constituents are incredibly lucky to have him. The same goes for all my hon. Friends in the Chamber tonight. The class of 2015 is particularly assiduous in campaigning. [Interruption.] Some Members from previous classes are also assiduous. I sometimes feel I am the most popular Minister, even though that is not true, because I am the one most frequently lobbied—on train-related issues. I appreciate the opportunity to answer some of my hon. Friend’s questions and to put on the record some of things that the Government are doing.

I first want to unpick what we mean by part-time season tickets. I think the definition is quite confusing. We mean a product that people who work part-time—about 27% of workers do so—can buy to give them, in effect, a multibuy discount. With that product they would not be forced to buy weekly season tickets, but something more suitable for their journeys. My hon. Friend made very good points about grey consumers—is that what he called them?—who sit at home having caught the 18.23 every day. That pattern is changing so dramatically. Technology is liberating many people from the workplace. We know that many more women, in particular, are working part time. The Government are absolutely committed—indeed, we have committed funding—to ensuring that such people can use the rail system effectively. In terms of “car-nay” or “car-net”, depending on how my hon. Friend used to pronounce that word in “Bar-nay” or “Bar-net”, I like to think of carnets as a multibuy discount.

I want to separate out another thing about which the debate has sometimes got bogged down. The decision on multibuy discounts is separate from the decision on ticketing technology. It is perfectly possible—indeed, this happens already—to buy carnets on the rail network, albeit in ticketing form. People can buy 10 tickets for the price of nine, and there are various other options. However, we must be careful not to try to have a big bang to solve all these problems at once. The industry has often hidden behind the excuse that this is all so terribly difficult. For me, it is simply a question of sorting out the right fares to suit this part-time working group, which is separate from the issue of ticketing technology.

As my hon. Friend well knows, because he is a very good businessman, there are a few questions to pick through when we talk about fares. The two main issues are those of cost and timing. On cost, train companies say that if people who currently buy full-time season tickets are suddenly given the opportunity to buy tickets for less, it will lead to less revenue, meaning that somebody will have to pay. My understanding is that only about 10% of current rail travellers work part time, so those numbers may be lower than they are represented to be, but ultimately, if there is an additional cost in the form of reduced revenue for the rail industry, somebody will have to pay. That will be other fare payers, through increased ticket prices—we absolutely do not want that, which is why we have capped rail fares for the duration of this Parliament—or the Government, who will be asked to pay up front or through the franchising process, or the companies, which will have to commit their own capital to make up for the shortfall in fares.

All those points are valid. The Government have committed £132 million to introducing such products during this Parliament, so we are clearly prepared to pay our fair share. However, the measure is slightly crude, because it ignores some of the points very well made by my hon. Friends. There is a series of costs to society that are avoided by getting people to use trains, such as the cost of congestion, which we always find very difficult to price.

There is also a massive productivity uplift from getting more people travelling. We know we have a massive skills shortage in this country, so if we can get more people back into work part time and working more effectively, that has to be good for productivity. As we have seen with Transport for London, if people are given slightly more attractive fares, more people will travel, so what a company might lose in value, it will gain in volume. It seems difficult to get people to model that in the round. That is always difficult with any infrastructure investment, but I believe we should be considering these benefits collectively, and that is why the Government have underpinned those programmes with £132 million.

On timing, we can either impose the roll-out on the industry all at once, or we can do it with the franchising competition. My preference is always to do it while franchising, because a competed price is always a better price. We are relying on the franchising process to drive innovation wherever possible, albeit with Government underpinning if we want to do things that cut across the franchising schedule. Many franchising competitions are ongoing, including that in the constituency of my hon. Friend. I cannot possibly say anything about what is happening, because those bids are live and under evaluation, but my hon. Friend knows—he has campaigned assiduously on this—that we have made it clear to bidders that we are looking for a step change in technology, in the customer experience, and in how innovative ticketing solutions are delivered. I am confident that we will start to see progress.

As my hon. Friend said, Abellio Greater Anglia has introduced two forms of ticketing progress. One is underpinned by the Government’s £80 million investment in the south-east flexible ticketing scheme, and we will meet our contractual commitments. SEFT is basically providing a back office for rail companies to offer smart season tickets on a key card basis, and I look forward to launching that product in a couple of weeks from Cambridge station. It will be going live on my hon. Friend’s line, and is already live under other train operating companies in the south-east. Therefore, not only do we have a digital ticket, but there is also the opportunity to build a customer relationship, and to offer things such as season ticket discounts to provide potentially automated compensation in the way that C2C does. That is a good step forward.

Abellio Greater Anglia is trialling the MultiPass scheme that uses low-energy Bluetooth readers across stations, tracks people via their phone and works out their journey patterns, and bills them after the fact. That is a great example of innovation in the industry. My hon. Friend asked whether it was possible to travel using a smartphone, and it is. The m-ticket scheme is already up and running. I went to see it a year or so ago in the north of England, and it is spreading rapidly. It is basically a series of barcodes that are sent straight to a mobile phone. Someone taps that, and it becomes their ticket to travel. It is brilliant and should be much more cost-effective for the operators.

There is a lot of ticketing innovation out there for us to unleash. Rather than sitting around waiting to be told what to do by the Government—who despite the best efforts of the brilliant officials in the Department are not necessarily on top of the latest technological revolutions—those companies that are closest to customers should innovate and be prepared to put in their capital and innovation to drive results. We want the franchising process to do that.

My hon. Friend asked me some specific questions. During the franchise, can we go back and influence what is happening with the bidders? The bids we have refer to our terms and conditions, which include fairly specific requirements on smart ticketing and part-time season tickets or multibuy discounts. He will also know—I am proud of this—that this franchise is a step change from where we were five or 10 years ago, as have been the last few franchises that I have let. We are putting in the franchise the highest level of quality scoring—the stuff that faces the passenger—that we have ever seen. We have had other debates on rolling stock, and the quality of that is not what it should be. This franchise will have the highest weighting for improved rolling stock that we have seen so far.

We will also have tough targets to contract for customer outcomes—one might imagine that we would have done that previously, but that has not always been the case. We are contracting to ensure that the punctuality and customer satisfaction targets that we want are an output —we are contracting not for inputs, but for outputs—and I think that we will see a positive result when we assess the various bids for this competition.

My hon. Friend asked about technology. I have mentioned the Multi Pass trial, which uses low-energy Bluetooth readers. We already have Smartphones that are using a digital barcode, which can also be printed out, as a way of allowing people to move around the system. A chap on the Moscow metro has his smartcard implanted in his wrist, so he is a human swiper; he just walks through and away he goes. I am not advocating that, although my hon. Friend would perhaps like to pilot it, but we are moving very rapidly in this country to innovate.

I have been shameless in calling for the death of the tangerine ticket. It bothers me that season ticket holders have scrabby old bits of paper that fray and wear out. I am sick to death of feeding my seat reservation coupon through the gate and shuffling through a great raft of tickets. This is 1970s technology and we want a 21st-century transport network. That is why the Government are so committed, both contractually and financially, to underpinning this technology.

My hon. Friend asked me about the combined authority, and he knows that we are great fans of devolution. We think that the best way to spend the record levels of investment in the rail programme is by pushing it through to local people—to local authorities—who are best placed to spend it. I must take the opportunity to commend the work that has been done by local councils, local enterprise partnerships and the so-called “Norwich in 90, Ipswich in 60” taskforce. They really have taken an argument about economic value added and used it to shape what they want franchising to look like in the area.

This is an excellent opportunity not only to put on the record the progress that we are making and the Government’s commitment to rolling out the SEFT contractual obligations, but to say that we do not want to stand still and be backing only one technology. There is a world of ticketing innovation out there and we want to be clear that it is to be delivered as soon as possible to customers. The Government stand by ready to underpin some of this, but we expect operators to be looking carefully at the business case themselves and thinking about how they can get people travelling off peak. My hon. Friend the Member for North East Hampshire (Mr Jayawardena) made an important point about that, because the trains are full at the peak but are carrying fresh air for large parts of the day. Let us have a ticketing and fares structure that gets people using those trains, so that we do not have to keep building expensive new tracks and buying new trains to deal with the peak demand.

I remain extremely committed to rolling out what I prefer to call a multibuy discount ticket, although my hon. Friend the Member for South Suffolk has a snappy way with his branding and can perhaps help us to come up with a snappy title for this part-time season ticket thing that we all want, even though we cannot necessarily come up with a good title. The Government are committed to these innovative products as part of the biggest railway investment we have seen in this country since Victorian times.

Question put and agreed to.