Rising Cost of Transport

Iain Stewart Excerpts

Wednesday 9th January 2013 Commons Chamber

[Iain Stewart (Milton Keynes South) (Con)]

I am pleased to have the opportunity to contribute to the debate. This is an important issue; there is a serious debate to be had about how we finance investment in the rail industry in future and about the cost of transport today. Like hon. Friends who have spoken, I will have no problem in voting against the Opposition motion; with depressing predictability, it is rather opportunistic, denies their record and contains few concrete proposals for the future. I asked the House of Commons Library for figures on how much rail fares increased between 1997 and 2010. The answer was 56% for local and regional operators and 98% for long-distance trains. Rail fare increases did not begin in May 2010.

My first main point is that although the debate on rail fare increases is important, the reporting is not always helpful or accurate; the headline turn-up-and-go “Anytime” rail fares are often cited and from that it is extrapolated that Britain has the most expensive rail system in Europe. However, those tickets account for less than 20% of ticket sales. When we look at the whole series of available fares, the position is not as straightforward.

In preparing for this debate, I looked at the Virgin Trains website for a hypothetical journey from Manchester to London. Yes, if I wanted to travel in peak time, turn up and go, a single would cost £154—a large sum. However, a wide selection of other fares for the same journey, as low as £12.50, was available on a wide range of trains. The point is that we have to look at the whole mix of fares, not just the headline ones.

We do not have the same debate in the airline industry. The difference between the cheapest and most expensive air flights on the same route, say to New York, is enormous—from a couple of hundred pounds to £1,500 if someone wanted to turn up and go.

[Mark Lazarowicz]

I am sure that it is possible to get a £12.50 fare from Manchester on Virgin Trains on some occasions. However, does the hon. Gentleman not accept that that £12.50 will be valid to London Euston, but if he wants to go to Brighton, Dover or the south-west of England with a different operator, he will not be able to get a through ticket at that rate? He will have to get two separate tickets, which might cost more than a single through ticket, because he will not be able to get a cheap through ticket.

[Iain Stewart]

I accept that there is an unnecessary complexity in the rail ticketing system. The Transport Committee has looked at that issue and will continue to do so. If the hon. Gentleman will forgive me, I will not go too far down that path, as time is limited, but he has made a valid point.

The comparison with Europe is interesting. A very good website called “The Man in Seat Sixty-One” does an independent comparison of European rail fares. Yes, when you look at the “walk up and go any time” fares, the UK is substantially more expensive, but on other tickets, including buying the day before, Britain is either on a par with France, Germany or Italy or very often considerably cheaper.

I mention that because when we talk about rail fares, we need to differentiate between passengers compelled to travel at a particular time of day and the vast majority who have some flexibility over when they travel. The Opposition are right to highlight in the motion the issue of super-peak tickets, but they miss an important point. I completely accept that some passengers will not be able to change their time of travel, but others can. A super-peak ticket should not be designed to increase prices but to give rail operators the flexibility to discount other peak-time travel and encourage passengers to travel slightly later or earlier if possible.

[Bob Stewart (Beckenham) (Con)]

Will my hon. Friend give way?

[Iain Stewart]

Certainly.

[Bob Stewart]

I thank my hon. Friend and namesake. Is it too utopian to hope that one day in future, rail fares, whatever they are charged at, will go up only by the rate of inflation, and that when we need to renovate our railways the Government will deal with that?

[Iain Stewart]

I am not sure whether it is utopian. The increased cost of investing in our railways has to be met by a mix of passenger contributions and taxpayer contributions. At the moment, the balance is about right. The cost of travel by any means is going up, and that takes into account the extra costs of energy. Similar debates are happening in Switzerland, Germany and other countries about how they cope with paying for the extra investment in the rail industry.

I return to my point about whether we can incentivise passengers to travel outwith the super-peak period. That is a line of questioning that I followed during the Transport Committee’s investigation when those in the rail industry were asked about what percentage of the daily commuter market could move their journeys as opposed to having to travel at the times they do. They were very reluctant to give a figure on that, so it is an area of uncertainty, but my own view is that with improvements in technology and more flexible working patterns, that share of the market will grow. In the last job I had before I was elected here, I had some flexibility because I could plug into the company’s database system and do a fair chunk of my work from home before having to travel in for meetings. If more and more employers give that flexibility to staff, as is entirely possible, it is perfectly feasible that rail operators will have an incentive to discount tickets—the shoulder, as it were—instead of putting up the super-peak fare, which I accept would be very unwelcome.

Time prohibits me from going into some of the other issues in depth. As the hon. Member for Liverpool, Riverside (Mrs Ellman) said, I hope that we have a further opportunity to explore the issues raised in the Select Committee report. There is a need to get the costs of running our railways down, as has been highlighted in McNulty and many other studies. I am encouraged by some of the innovations that are happening. I think particularly of the alliance between Network Rail and South West Trains. It is too early to give a full evaluation of that, but it is already showing signs of making it more efficient and cost-effective to maintain and improve the railway. There is the possibility of increasing revenue from retail space at stations. These factors will all feed into generating revenue for the railways and maintaining the pressure on keeping fare increases down.

I look forward to the Government’s conclusions from its consultation on ticketing. There is a real opportunity to drive down the cost of rail tickets in this country. However, we must look at the whole picture and recognise that we are pretty competitive compared with a lot of European countries. There will be pressures in future—that is a problem with the success of the railways to date—but the picture is not all bleak, and I very much welcome the steps that the Government are taking to improve the situation further.