Facing prolonged rail strikes, mounting costs, and plummeting passenger confidence, Britain’s rail system is at last set for reform. Transport Secretary Mark Harper announced in February that rail fares in the UK would move towards a demand-based model, but what will this mean for ticket prices? Daniel Matthan explores the proposed changes, and the failures of the current railway system.
To point out that Britain’s railways are going through a rough patch would be an understatement. The Transport Secretary has called the current model “financially unsustainable,” a view prevalent across both major political parties. The current franchising model, under which private companies operate railways under strict regulation, has long been criticised for increased costs for passengers, and poor reliability of service.
Over the COVID-19 lockdowns, public subsidies made up the vast majority of railway income, with costs continuing to rise month-by-month. Several rail companies that have collapsed are also effectively under public ownership, such as LNER. Pay disputes have caused months of rail strikes, contributing to the 1 in 13 rail services which were cancelled in the month leading to January 7th – levels not seen in almost a decade.
Single ticket fares in the UK were the most expensive in Europe
Britain’s rail services fall short in comparison to our neighbours, with far higher ticket prices for the average trip. A report by Euronews shows that as recently as January, single ticket fares in the UK were the most expensive in Europe, with return tickets a tight 4th. Due to an older rail policy, a single ticket is barely cheaper than a return on most services.
The report also highlights how UK passengers have been some of the hardest hit by price rises in the last 5 years, with rail inflation rates almost 7 times the EU average. Meanwhile, several countries, such as Germany, even saw significant reductions in prices thanks to experiments with discounted transit schemes.
The Department for Transport (DfT) announcement intends to address these systemic failures through a series of staggered reforms. Most likely in the short term is the abolition of return tickets across all LNER services, and the phased introduction of demand-based rather than regulated tickets for some LNER journeys, following successful trials on specific routes.
Behind the nostalgic […] Great British Railways lies a strategy involving greater privatisation
The DfT expect that this will roughly halve the cost of single fares across all services where it is rolled out, with Harper stressing that “this is not about increasing fares.” Rather, the move is expected to give more flexibility to passengers, who will no longer be pressured by high costs into planning exact travel dates. Students who find that they may save, for example, by taking a train for one leg of a trip but returning by coach, would have better opportunities to do this.
However, the DfT’s long-term plans are both more ambitious and controversial. Behind the nostalgic re-branding of Network Rail into the upcoming Great British Railways lies a strategy involving greater privatisation of the network, and less public intervention. Harper’s plans to increase competition and profitability aim for a more “commercially led industry,” with private rail companies getting stronger influence over the system.
Critics may well be wary of such a policy, as it is unclear how the government plans to balance the often competing interests of cutting railway costs with providing widespread service for passengers. It is, however, too early to say what direction will be taken.
2 in 3 respondents supported bringing railways back into public ownership
The proposals would also be in stark contrast to Labour’s plans for railway reform, which are also a step away from the current franchising model, but would involve a re-nationalisation of the network. Polling over the issue has been strongly in favour of such a policy, with a YouGov survey from November showing that 2 in 3 respondents supported bringing railway companies back into public ownership.
Overall, rail reform has been long overdue, and the announced plans represent a first step in this direction. The removal of return tickets should halve the prices of most single tickets on services where it is implemented, giving passengers more flexibility with their travel plans. However, more distant plans for greater effective privatisation of the railways may prove unpopular with both passengers and voters, unless they can address the structural failures at the heart of Britain’s train network.
Featured image courtesy of Charles Forerunner via Unsplash. Image license found here. No changes were made to this image.
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