Rail Fares

Lord Lancaster of Kimbolton Excerpts

Wednesday 5th September 2012 Commons Chamber

[Maria Eagle (Garston and Halewood) (Lab)]

I beg to move,

That this House believes that the rising cost of rail travel is adding to the financial pressures facing many households; and calls on the Government to restore the one per cent above inflation cap on annual fare rises for 2013 and 2014, and to ban train operators from increasing fares beyond that strict limit.

I begin by congratulating the right hon. Member for Derbyshire Dales (Mr McLoughlin) on his appointment as Secretary of State. He returns to a Department he left some 20 years ago—time flies—after serving for three years as the Minister with responsibility for aviation and shipping. Only three years thereafter—I hope not as a result of his experience—he took a 17-year vow of silence in the Government and Opposition Whips Offices, from which he emerges today, probably blinking into the light. I think I speak for the whole House when I say that we are all very keen to hear what he has to say. He is the third Secretary of State for Transport I have faced since taking up my role in opposition. I hope for his sake he lasts a little longer than his predecessors and I wish him well in the role.

I also welcome his new all-male team—of course, that is a matter for the Prime Minister, not the Ministers he appointed—including the Minister of State, Department for Transport, the right hon. Member for Chelmsford (Mr Burns), and the Under-Secretary of State for Transport, the hon. Member for Wimbledon (Stephen Hammond). Another Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker), of course provides the continuity in the Department—something that he probably never thought he would do.

We are debating an Opposition motion, but there need be no disagreement in the House today. I hope that all right hon. and hon. Members, including Ministers, will feel able to support the motion in the Lobby later this afternoon. It is a straightforward motion with a simple proposition—that the rising cost of rail travel is now adding to the financial pressures facing many households. That is a fact, and I would hope that we will see agreement at least on that. It is something that we are all hearing from our constituents. I also hope that we can agree on a second basic proposition—that the level by which rail fares increase should not simply be left to the private train companies to determine. It is why we have the system of regulated and unregulated fares, with those tickets on which most people rely, including day returns and season tickets, having their annual increase capped.

There has always been cross-party agreement that there is a role for Government in the setting of fare levels and it is right that we retain the ability to protect our constituents from a profit-driven free-for-all on fare rises. The reality, however, is that the so-called cap on annual fare rises, even for regulated fares, is not a cap at all. So when the Chancellor stands up, as he does, and says that fares will not rise by more than 1% above inflation—or whatever percentage it might be—he cannot actually deliver that commitment at ticket offices across the country, because the cap is an average and train companies have the flexibility, as they like to call it, to increase fares by up to 5% above the so-called cap.

In January, just two months after the Chancellor had promised a 1% above-inflation cap on fare rises, what did commuters find when they went to buy their tickets? They found fare rises not of 1% above inflation but of up to 11% above inflation, because the train companies had exercised their flexibility to add up to another 5% on to some fares. That is what our constituents across the country face again in the coming new year—fare rises of up to 11%. We are kidding ourselves, therefore, if we think that what we are debating is whether the cap should be RPI plus 1 or RPI plus 3, because the train companies can game it to their advantage. That is why our motion proposes that if we are to have a cap on regulated fare rises—we believe that there should be one, and I think the Government do too—it should be a real cap.

[Mark Lancaster (Milton Keynes North) (Con)]

Given the hon. Lady’s concern about the impact of fare rises on families, will she join me in congratulating FirstGroup on its successful tender for the west coast rail franchise, given that it is committed to reducing by 15% the cost of a standard anytime return journey? Is this not a demonstration of an effective tender process by this Government?

[Maria Eagle]

Many questions have arisen from the announcement in the recess about the west coast main line. The hon. Gentleman is right to highlight that the winning bidder—we must remember that legal action is ongoing, so we are restricted in what we can say—has made that commitment, but issues have been raised over the deliverability and reality of the assumptions behind the winning bid. Those issues have been raised not only by some of the losing bidders but by other experts in the industry.