Railways: Fares

Lord Davies of Oldham Excerpts

Thursday 31st January 2013 Lords Chamber

[Earl Attlee]

My Lords, I know how much my noble friend supports HS2. The business case for HS2 is not predicated on premium fares.

[Lord Davies of Oldham]

My Lords, I am surprised that the Minister takes a patronising attitude to what the public understand. The public understand fare increases quite clearly. The National Audit Office warned that if excessive fare increases occurred they would merely be reflected in higher profits for the train operating companies. The Prime Minister said that fares should not go up by more than 1% above inflation—in other words, 4.2%. How does the Minister justify fare increases of 9%?

[Earl Attlee]

My Lords, a fare increase of 9% can arise where you have the RPI plus one, plus the flexibility that is necessary in order that train operating companies can adjust their fares to suit changing conditions. For instance, let us suppose there was a new shopping centre in an adjacent town. It might be desirable to adjust the pricing structure to reflect that. If there were no flexibility, train operators would not be able to adjust their price structure but would have to stick with an old system.