Delay Repay Scheme: Rail Commuters

Tom Brake Excerpts

Thursday 4th February 2016 Commons Chamber

[Tom Brake (Carshalton and Wallington) (LD)]

I thank the Rail Minister for being here to respond to this debate. I am going to speak about many painful personal experiences of delays on the trains; the Minister can share some of those with us as well, as I am sure that she has also had experiences of train delays. Like her, no doubt, I have received a huge quantity of emails, letters, Facebook messages and tweets from various constituents unsatisfied or very unhappy with the services currently provided by Southern and Thameslink, the two major train operating companies that run in my area.

The companies are providing a completely unacceptable standard of service. As the Rail Minister knows, they are consistently among the three lowest-scoring train operating companies in the national rail passenger survey carried out by the watchdog Transport Focus; it covers issues such as overall satisfaction, value for money, punctuality and reliability.

Delays and cancellations are often announced at the last minute, and overcrowded trains and bad customer service are a daily occurrence for suburban London commuters. We now have to add to the list of excuses the wrong kind of sunlight—a novel one for me. In the past, I have heard the excuse of a pheasant having been stuck in the shoe of a train brake; that was another novel explanation for a train delay. Combine those problems that passengers face with yearly rail fare hikes, and we see that there is a lot of pressure on commuters, who have not only to pay for the shambolic service but suffer lost time and increased stress.

The passenger compensation schemes are not fair and are largely unknown to passengers, which means that the train companies are getting away with a shocking service. How bad are things? The public performance measure gives the percentage of trains that arrived at their final destination within five minutes of their scheduled arrival time. Five years ago, over a period of one month in 2010-11, more than 1,000 Thameslink trains were delayed. Move on five years and the figure is 5,000 trains. In 2010-11, more than 2,000 Southern trains were delayed in one month; five years later, the figure is more than 8,000. I accept that part of that will simply be down to the fact that train companies are running more services, but to see train performance going down rather than improving over five years is a cause for concern.

The Minister knows about the current compensation schemes. The old-fashioned passenger charter is being phased out. Most train operating companies now operate the newer Delay Repay scheme, which is included in all the new franchise contracts. The scheme works in different ways for different train operating companies, but broadly speaking the one operated by Govia is representative. Passengers delayed by 30 minutes or more are entitled to 50% compensation of the single-fare price, which goes up to 100% for delays of 60 minutes or more. Compensation usually takes the form of rail vouchers to be collected from the relevant operator’s ticket office, but it can be paid out in cash if requested by the passenger—that is also not widely publicised.

What are the problems with the scheme? First, the compensation threshold is too high. For many suburban commuters the typical journey will be 30 to 45 minutes, so receiving compensation after a delay of 30 minutes, with full compensation for a delay of over 60 minutes, is an insult because that often means that the delay has to be the same length as, or longer than, the actual journey.

There is also a complete lack of standardisation. The only common element of Delay Repay schemes across the train operating companies is the 30-minute threshold for compensation—everything else differs. The circumstances in which compensation can be paid vary; some compensation schemes include the weather and planned engineering works, whereas others exclude them, so there is no clarity about what passengers will get.

The ways to claim compensation also differ from one train operating company to another, with compensation sometimes paid as vouchers and sometimes as cash. The preferred method—at least some train operating companies are moving towards this, and the sooner the better—would be for companies automatically to compensate passengers through their Oyster cards, smartcards and contactless cards or through the other electronic means that passengers use to pay for tickets.

The variety of ways in which compensation is paid, and the different schemes in operation, are clearly a source of confusion for staff as well. Which? is doing a lot of good work on this issue, and when its researchers looked into it at stations, 37% of them were given no information, or only part of the information they needed, about how long a delay needed to be before a refund was due. If even the staff in the station do not understand how or when compensation is payable, what chance do commuters have?

Compensation schemes are badly publicised, and it is hard to claim. A 2013 survey by Transport Focus, the independent watchdog, found that 88% of those eligible for compensation did not claim. A 2014 survey by the rail regulator showed that 67% of respondents knew not very much, or nothing, about their rights to compensation. A Which? survey revealed that only 36% of passengers remembered being informed of their rights after their last delay.

That points to a significant problem with train operating companies’ passenger information policies. It implies an unwillingness on the part of companies to make claiming compensation as easy as possible for their customers. On many occasions I have called on companies to make sure that, for every train that is delayed, where passengers would be entitled to compensation, that should be announced on the train. Preferably, as passengers get off the train, there should be members of staff handing out leaflets so that everyone knows they are eligible and everyone is certain how they can claim. Indeed, now that there are electronic displays on trains, they could also be triggered to ensure that passengers know.

The procedures for claiming compensation vary, and passengers can use different forms. Some companies offer email claims with a photo of the ticket. Others require an original ticket to be sent in—an option that I have used.

As to the forms of compensation, rail vouchers are the standard form, but train operating companies fail to advertise the fact that cash compensation is available on request, as per condition 42(d) of the national rail conditions of carriage. The Which? survey I referred to carried out an anonymous investigation at 102 stations, revealing that 63% of the time during the investigation people were not told they could receive compensation in an alternative form to vouchers, even after staff were prompted—perhaps to encourage them to remember that that was the case.

The fact that vouchers need to be picked up from ticket offices is another hurdle, and it means that passengers cannot necessarily get the best fares, given that online tickets booked in advance are often the cheapest.

There is currently a lack of enforcement. There is no ombudsman for rail companies, and that makes it very difficult to hold the train operating companies to account. Transport Focus, the independent watchdog, has no powers to make TOCs pay a refund. I am not alone in expressing concern about these issues. A super-complaint has been presented to the Office of Rail and Road outlining evidence of the consumer detriment in this market and inaction by train companies in making customers aware of their rights, with unnecessary complexities and barriers within the system. We expect the ORR to respond to that complaint by mid-March. I hope the Minister will say what she expects to come out of that and what action she might expect to take.

What is my proposal? Perhaps surprisingly, it will not necessarily encounter the degree of resistance, certainly from some of the train operating companies, that one might expect, as I understand that some are willing to entertain it. I propose that the delay threshold should be reduced such that commuters are entitled to compensation after 15 minutes of delay, when they would get 50% compensation, and after 30 minutes, when they would get 100% compensation. Rather than 30 and 60 minutes, the thresholds would be 15 and 30 minutes. Season ticket holders’ rights to compensation would have to be adapted accordingly.

What other things need to happen? As I have said, much better publicity is needed about the existing Delay Repay scheme, even if the scheme is not improved in the way that I suggest. I recently signed up to the email notifications that Southern and Thameslink give when there is disruption on their services. I do not know whether there has been a case of a train falling foul of the current 30-minute delay threshold since I have been receiving those emails—presumably many other passengers will now be receiving them—but I hope that if that happens in future they will make it very clear that people are entitled to claim compensation and include a link and an explanation about how they can do so. As I said, we need electronic announcements on trains. We need staff at stations handing out information. We need a degree of standardisation so that commuters, many of whom use different train operating companies, understand that there is a simple, standard process that they can follow, with the same claims procedure in every case. That would also help staff, who will often move from working for one train company to another. If they do not understand how the system works at the moment, then at least if there was only one system in place, there would be a better chance of their doing so.

Given the volume of rail complaints, we need to establish an ombudsman with real teeth to impose sanctions on the train operating companies. It was suggested to me in an email—I have no clear view on this at the moment, so I would be interested to hear the Minister’s view—that we should allow nominee companies, which are now active in the field of claiming compensation for airlines, to operate in the rail market as well, to get economies of scale and help passengers with associated charges. Perhaps if that happened, more passengers would claim, but we would not want to get lots of phone calls from them saying, “Have you had a train delay? Would you please call this number?” which would be very frustrating.

What are the advantages of my proposals? First, there is no doubt that a scheme where compensation kicked in at 15 minutes and 30 minutes on any train service anywhere would put more pressure on the train companies. If they knew they were going to get financial pain from running trains late or not having enough drivers, which is the usual excuse in the Southern area, they would make sure that they had more drivers, and so on. It would put more pressure on them to improve their performance. As I said, better advertising of the scheme would ensure that far more passengers were able to take advantage of the compensation. Although that would not necessarily reduce their stress levels on delayed trains, at least it would give them a bit more money in their pockets through part-compensation for the very poor services.

I will finish where I started by asking the Minister whether she will support my call for Delay Repay to kick in at 15 and 30 minutes.

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

I thank the right hon. Member for Carshalton and Wallington (Tom Brake) for securing this debate. Some people say that I seem to have drawn the short straw by having to participate in Adjournment debates on successive Thursdays, but I am always happy and keen to talk about the railways and what this Government are doing to try to improve them.

I agree with many points made by the right hon. Gentleman, including the fact that the compensation system is not working as well as it should and his comments about performance issues. Indeed, I chair a taskforce comprising the operators, Network Rail, Transport Focus and anyone who might be able to help us drive up performance in this crucial region.

May I crave your indulgence, Mr Deputy Speaker, and put on the record my personal thanks to the Network Rail team that has managed to fix the Corbridge landslip, which had completely disconnected the vital east-west line between Newcastle and Carlisle? The team has moved 35,000 tonnes of soil, the line is open and trains will run from next week. That is proof that the orange army really can deliver, and I want to make sure that that happens in the right hon. Gentleman’s region as well.

It might be helpful if I set out some of the improvements that are already happening. Delay Repay is a universal, standardised offer of compensation that has been adopted by 80% of rail companies. That addresses the right hon. Gentleman’s point about variability in what people are entitled to. As he has said, under Delay Repay passengers can claim 50% of a single fare for delays of 30 to 59 minutes; 100% of a single fare for delays of more than 60 minutes; and 100% of a return fare for delays of more than two hours. Ten operators use the scheme and it is being introduced nationally, along with franchising.

Interestingly, the scheme is among the most generous compensation schemes for rail passengers in Europe. I know that sometimes it does not feel like that, particularly if there are persistent delays, but there are countries that do almost nothing for customers who are delayed.

[Tom Brake]

Will the Minister reflect on the fact that the compensation scheme can afford to be generous because so few passengers actually claim compensation?

[Claire Perry]

The right hon. Gentleman anticipates a very important point—on which I also agree with him—that I will come on to address.

It is not enough to rest on saying that a general scheme is in place and being rolled out. The right hon. Gentleman raised two main, vital issues. First, he asked what passengers can do if there are shorter delays. I have had a look at journey times from his constituency. The average journey time for constituents of his travelling from Wallington to London Victoria is about 38 minutes, and for those travelling from Carshalton and Mitcham Junction it is 25 to 29 minutes. Clearly, it would be a bad day if the delay lasted as long as the journey time. That is why the Chancellor made it absolutely clear in the autumn statement that we will introduce a compensation level starting at 15 minutes. I want to do that quickly. We are, of course, working through the numbers. I cannot yet say what percentages will be paid and when, but the right hon. Gentleman can have an absolute assurance that in the near future a compensation scheme will be introduced right across the Delay Repay franchises, including the Govia Thameslink Railway: the clock will start ticking, quite rightly, at 15 minutes. That is absolutely appropriate.

Improvements were made to the scheme last year. The right hon. Gentleman is right to ask what other industry pays us in travel vouchers. We need to pay people in their own currency, to demonstrate respect for the time they have lost. Three main changes were made to the GTR compensation scheme last year, to the benefit of his constituents. First, when calculating compensation, it used to be assumed that a season ticket holder travelled every single day of the year. Now, holiday entitlement has been included in that. The net result of all those calculations is that if annual season ticket holders claim compensation, they will get £3.70 per journey instead of £3.30, which is a 12% increase in the compensation level. If they experience a 60-minute delay, which would be unlikely, and, indeed, catastrophic, the compensation will be substantially more—an additional 10%.

The second change that the right hon. Gentleman rightly focused on is that the industry now pays compensation in cash, not in vouchers. He will share my disappointment that there is not widespread knowledge about that, certainly among staff. I will talk a little about my expectations of the ORR super-complaint in a moment.

The third change is, I think, the most important. People do not have time to faff about trying to claim compensation. These are busy people, trying to get to work and home to their lives and families. I am sure the right hon. Gentleman will welcome the introduction of automatic compensation. It is already happening. Certain operators offer automatic compensation if passengers buy a ticket online, so it can be linked to a specific journey. Others, including GTR, are linking automatic compensation payments to the use of a smart card, which has been rolled out for season tickets.

C2C, which, like GTR, has benefited from the south-east flexible ticketing programme—the Government’s great investment in smart ticketing in the south-east—will, from this month, provide automatic compensation of 3p per minute for every minute’s delay after two minutes. If someone is sitting on that train, even if they are only delayed for five minutes, their time is worth something. That is exactly the sort of scheme that works well for constituents such as those represented by the right hon. Gentleman, who take shorter journeys and for whom those persistent minutes of delay are very annoying. That is something that we are monitoring and we would like to see it rolled out, particularly across the metro franchises.

The right hon. Gentleman raised an important point: it is completely unacceptable that all these measures are being put in place but, as Passenger Focus found, only 12% of passengers claim the compensation to which they are entitled. That is made doubly annoying by the fact that train companies receive compensation from Network Rail and from each other if delays are created—the so-called section 8 compensation payments. Money is flowing into those train companies, and it should be flowing out to all passengers who are entitled to compensation.

Southern and GTR have a “reasonable endeavours” clause in their franchise about making announcements. We are determined that they should meet that, and one of the measures I am looking at is whether to get all the train companies to publish their numbers for compensation claims so that we can see, relative to the number of passengers they are carrying, which ones are doing well. As the right hon. Gentleman says, making announcements is not rocket science. Indeed, some companies do so, particularly on their Twitter feeds, where they say: “This is a delayed train, and you are entitled to claim compensation. Here’s how you do it.” By the way, rather than having people muck about with bits of paper, the claim forms now can generally be downloaded or completed online. In fact, GTR has an app that enables passengers to submit their delay claims straight from their mobiles.

The right hon. Gentleman made an interesting point about nominee companies and airlines. Such companies exist in the rail sector. I do not know whether I am supposed to say this, but companies such as Delay Repay Sniper will do all the work and take all the hassle out of the process. I want people to get the compensation that they are entitled to. I mentioned the smart card, on which GTR will offer an automatic refund by 2017. We will not stop here; we will keep pushing for better compensation.

The right hon. Gentleman made a suggestion about announcements on trains. The new fleet of class 700 trains that will start running on the franchise this year have lots of onboard information, and it is perfectly reasonable to have an electronic message that states, “You are entitled to compensation if you are on this train.” Those are all good suggestions.

The right hon. Gentleman mentioned performance. In an ideal world, compensation would be zero, because the trains would all get there on time. I am sure that we all want that. There might be an element of apples and pears in the statistics that he cited about historical cancellations, because the franchise was re-let in a very different form two years ago. It is now the biggest in the country, with about 20% of Britain’s passenger journeys, and that may have something to do with the big increase in the cancellation numbers.

I would be the first to say that the performance level is not good enough. I have pulled out the performance statistics. They show that about four out of five trains on the Southern metro service, which serves the right hon. Gentleman’s lines, arrive on time according to the public performance measure, which is about 77%. I am interested in trains arriving at the right time, for which the figure is 51%, and that is substantially better than what it was last year.

The point that so many people have collectively missed is that the impact of a crowded train of 1,000 people arriving late on the British economy is very substantial in terms of the productivity of that train load of passengers. My view is that performance on that very crowded part of the rail system should be driven up and made substantially better, because the aggregate level of human misery created by delays is higher and the hit to the productivity of the British economy caused by delaying millions of people is also higher.

I have therefore challenged the entire group of people operating that part of the railway, from the head of Network Rail downwards, to drive it back on to a high-performance route by the end of 2018. By then, the London Bridge works will be substantially complete; we will have the new class 700 fleet, which will offer so much relief in terms of better trains and increased capacity; and we will largely be through the Thameslink programme, which has created disruption for so many people. We must stay focused on how we can deliver a high-performance railway at that time. However, it is not enough to wait until then. I have made it absolutely clear to the operators and Network Rail that performance needs to improve now, so that although people can claim compensation, they will not necessarily need to do so because their trains will be on time.

[Tom Brake]

Will the Minister clarify one point? She said that at some point in the future—perhaps she will speculate on when—compensation might kick in after 15 minutes. Given that only 80% of TOCs have currently signed up to Delay Repay, does she expect 100% of them to sign up to that new, enhanced system for 15-minute delays?