Rail Fares

Justin Tomlinson Excerpts

Wednesday 11th January 2012 Commons Chamber

[Dr Julian Huppert (Cambridge) (LD)]

Rail fares in this country are far too high. Under the last Labour Government we saw year after year of fare rises, and we now have one of the most expensive railways in the world. From 1997, 13 years of Labour government saw rail fares going up by 66% in cash terms. I welcome, however, some of the shadow Secretary of State’s comments about people wanting simple ticketing, as they want to understand what is going on. I welcome that, although it is somewhat belated. I and many others have been arguing for that for many years. I hope we can go further; it is a shame that it did not happen during those 13 years.

Most recently, thanks to pressure from the Liberal Democrats—both inside government, from those such as the Under-Secretary of State for Transport, my hon. Friend the Member for Lewes (Norman Baker) and outside it—and arguments won by a new Secretary of State and Minister for the railways, fares have risen by 1% above inflation this year rather than the planned 3%. I welcome that, and I hope it will not revert to 3% in future years.

We in the Liberal Democrats believe that fares should fall in real terms rather than rise even further above inflation, as happened year on year under Labour. As the shadow Secretary of State confirmed today, Labour policy is for fares to go up by more than inflation every year. That is something that the British public should be concerned about; they have heard it from the shadow Secretary of State today. The Conservatives have also argued for similar increases. We need to reduce the fares and to understand how we can reduce them, we first need to look at how fares have become so high.

[Justin Tomlinson (North Swindon) (Con)]

With pressure to raise revenue to offset fare rises and reduce overcrowding, why not give greater freedoms to train conductors to sell spare capacity in first-class carriages during peak times?

[Dr Huppert]

I would have to look at the details, but it is an interesting idea that is worth looking at. There is also the question of how much spare first-class capacity there should be so that potentially everybody could afford to use it. I am sure that the responsible Minister will look at that.

Why are rail fares so high? Why do commuters suffer from some of the most expensive tickets in Europe and some of the most crowded services? The main reason is chronic underinvestment and mismanagement of the railways. Over the last 50 years, for example, the length of our rail network has roughly halved, but even just since 1980, the number of passenger journeys has doubled. That is good, but it puts pressure on those railways. Government after Government have invested far too little in our most important transport network. Infrastructure spending simply has not kept up with demand, and that pressure on the railways has caused a downward spiral. An overcrowded, inefficient and unreliable service is far more expensive to run. The Office of Rail Regulation estimates that UK railways are up to 40% less efficient than their European counterparts, despite the cost of tickets. That puts fares up, and reduces the amount of investment that is available from them.

The network has become increasingly expensive to run as it has deteriorated, and Government after Government have shifted the spending burden on to passengers. I believe that a large chunk of the 30% savings identified by the McNulty review should be passed on to passengers in the form of lower fares as soon as possible, with the rest being spent on infrastructure. I hope that the Secretary of State and the Minister will accept that those are the priorities.

What is key is significant and well-targeted investment in the railways. That is why the Liberal Democrats were so thrilled by the announcements made by the coalition Government towards the end of last year. Despite the eye-watering public deficit that we face and the ongoing eurozone disaster, we managed to find the £1.4 billion of investment in our railways that was announced in the autumn statement—£400 million more than was announced for the roads, which represents a very good rebalancing towards sustainability—and yesterday we heard the excellent news about High Speed 2.

If we have managed to find those funds now, in such difficult times, just think what could have been done in the boom years. That opportunity was missed. It is deeply regrettable that the necessary investment was not made sooner. Funding would have been easier, decisions would have been much easier to make, and the fares that we face now would be lower. It is a great shame that that did not happen when the money was available.

As well as what can be done in the longer term, there is more that we can do now. For years the Liberal Democrats have called for rail fares to be more open, transparent and rational—so that people can understand what they are buying, why they are buying it and when they can use it—and for franchise agreements to be more flexible. On both those fronts, the Government are making significant progress by reforming franchise agreements and opening up Government data. Nevertheless, there is more to do, and I am sure that the Minister will say more about it later.

Without accountability and openness, there can be no reform and no incentive for fare reductions. It is because of the lack of transparency that successive Governments have employed in rail policy that the debate has become so fractious and fares are so stubbornly high. We see politicking and individual fares being picked on in various quarters. We can all do that. Today we heard the Labour party present the fare rises as though they were a new phenomenon, but fares have risen above inflation since 2003. Some fares have always been allowed to rise more than others as long as they fit the average cap. That was the system established by Labour in 2004.

I could give a number of examples. In 2007, fares on Stagecoach South West Trains rose by 20%. In January 2009, when the retail prices index was 0.1%, fares rose by 6%: 60 times as much as inflation, which was a huge amount. Some comments were made about Ken Livingstone earlier. Londoners will not forget that, having promised in his manifesto

“I will freeze bus and tube fares in real terms for four years”,

Ken Livingstone raised bus fares by 43% in January 2004. They will know what to believe when he makes similar promises again.

The real casualties of all that are the rail system and the passengers whom it is there to serve. The masking of the cause of the fare rises, the predicted income and the pricing structures have meant that the real issues have not been dealt with for too long. We are letting the public down by continuing down that route and not taking the steps that I have outlined. We should pay attention to what is happening throughout the country at present, not just to the extremes—the highest and lowest figures. Overall, fares are rising by 5.9%, which is below the “1% above inflation” cap. That is good, but the fares are still too high and they need to come down.

We should focus today on the overall burden on passengers, on the causes of that, and on how we can reduce those causes. Unless we invest and deal with the problem now, we shall never be able to achieve our goal of a cheap, efficient and sustainable transport network. I hope that Liberal Democrats in Government will be able to make those tough decisions in order to give Britain the efficient and sustainable network that we deserve, and I hope that we will be successful in our pressure for fares to go down in real terms and not up, up, up. The public deserve a good, reliable and affordable rail system.