Commons Gate

How Fair are the Fares? Train Fares and Ticketing (HC 700-i)

Transport Committee 23 Nov 2005

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Evidence given by Mr Bob Crow, General Secretary, and Mr Ray Knight, member, Council of Executives, National Union of Rail, Maritime and Transport Workers (RMT); and Mr Stephen Joseph OBE, Executive Director, and Mr Dave Woracker, Operational Research Analyst, Transport 2000, examined; Mr Brian Cooke, Chairman, Mr John Cartledge, Deputy Chief Executive, London TravelWatch; Mr Colin Foxall, Chairman, Mr Anthony Smith, Chief Executive, Rail Passengers' Council; Mr Alan Meredith, Chairman and Mr Stephen Abbott, Secretary, East Midlands Passenger Transport Users Forum, examined; Mr Chris Bolt, Chairman, and Mr Michael Beswick, Director of Rail Policy, Office of Rail Regulation; and Mr Iain Coucher, Deputy Chief Executive, and Mr Robin Gisby, Director of Operations and Customer Services, Network Rail.

Q34 Mr. Eric Martlew: On that point, before I came up today I went up to the Travel Office here, which is very good, and asked for a list of prices for Carlisle to Euston and back. Some of them are return and some are not but I got a list of 29 different prices. Some of them are not available at all, I suspect the GNER one that goes Newcastle-Carlisle which nobody has ever used is not available either. Would you say that the system is deliberately complex to allow the companies to advertise the cheapest fare but not give the cheapest fare?

Mr Crow: There are only a few seats on the trains, there are not hundreds and hundreds of seats or a carriage where people can go at the price that we are talking about. There will be a few seats. What happens, also, is that with the software these companies know, they know what train leaves at what time, roughly how many people are going to use that train, and they will know then that the train is going to be empty so they can have cheaper fares on there but a previous train is going to be full so they know they can jack the prices up. It is not just about having the opportunity of going to your destination when you want, they will allow seats because they know they will be empty anyway so they can afford to give them at a cheaper rate, but you just cannot walk on and decide. For instance, at three o'clock next week you can get an appropriate ticket to Newcastle and at two o'clock in the same week, they can be a totally different fare from the train that leaves at three o'clock.

Mr Joseph: The system you have described is really a product of the philosophy that we have mentioned which is trying to get the most out of each seat on the train. Our argument is that it is better for both the people travelling but also the taxpayer to try and do a different strategy which is to try and get the most people on the train that you can, which we would argue means in a lot of cases the prices need to come down, and the point we made earlier about simplifying them as well.

Mr Woracker: On a technical point, the machine that person consulted to get those fares, you are really asking quite a lot because it has to deal with, if you like, the Virgin Trains strategy, which our analysis suggests is trying to maximise the yield per passenger, and it has all those sorts of fares in it, it has also got all the GNER fares in it, which has an entirely different strategy and, at the end of the day, for example, you should be able to ask for a Bognor to Portsmouth weekly season ticket and have the ticket issued.

Q35 Mr. Eric Martlew: Before you were making a comparison that Virgin had put the fares up 11 per cent, I think, was the comment you made?

Mr Woracker: Yes.

Q36 Mr. Eric Martlew: You talked about the fact that the usage had not gone up. I have chaired the West Coast Main Line All Party Group for about a decade now and nobody has been travelling on the West Coast Main Line unless they have to. The reality is that the problems on the West Coast Main Line, not necessarily the pricing, have been chasing people off. Did you factor that in?

Mr Woracker: I did, in fact, factor that in. Across the study group there have been some other problems. What I was trying to get to was some sense of argument because where the debate seemed to be going was one camp saying "Look at all these cheap fares" and the other camp saying "Yes, but I do not want to travel at that time". The real argument here is how much people are paying to travel the journeys they are making. That is what my analysis did.

Mr Crow: Also the strategy is quite clear of the train operating companies which operate intercity routes. There is no strategy about getting people to use the trains when they are less used or on-peak or off-peak, the strategy is quite clear: how much money they can make.

Mr Joseph: The period we have looked at - you have talked about Virgin, we also talked about GNER and the comparison there - the point about GNER is in that period they had the Hatfield crash and two other major interruptions/problems which have also hit their revenue paths. There have been other things in there.

Q37 Mr. Eric Martlew: Nowhere near as bad as the West Coast Main Line. A final point: what are we going to do about capacity? One of the problems we have got on pricing at the moment is that if you charge less, and this is the argument of the rail companies, you will not be able to get a seat. Is there not some truth in that, there is a capacity problem on the railway?

Mr Joseph: We directly addressed that in our evidence and pointed out that fares policy is often driven by the lack of capacity. It is not just about lines or passing loops or any of those kinds of things, it is about trains and train lengths as well. Moving off the West Coast Main Line for a moment but looking at some of the other routes, it is in some cases even the lack of a passing loop being installed which stops you having a regular interval timetable and, therefore, does not attract the revenue that you might otherwise get and, therefore, involves pricing up to make up for the lost revenue. We have argued recently, with the support of 21 other organisations, that the Government's forthcoming high level output statement for the railways needs to have the embraced strategy of increasing capacity on the rail network for a wide range of reasons including economic, social and environmental purposes. This strategy needs to embrace reducing unit costs so that the taxpayer gets better value for money out of the money it is putting into the railway but involves dealing with pinch points on the network, the likes of Birmingham New Street and a number of other places where there are real problems in expanding capacity and there are wider economic, social and environmental benefits from doing so. Fares policy is clearly part of that equation.

This is an uncorrected transcript of evidence taken in public and reported to the House. The transcript has been placed on the internet on the authority of the Committee. Neither witnesses nor Members have had the opportunity to correct the record. The transcript is not yet an approved formal record of these proceedings.

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On behalf of Eric Martlew, 3 Chatsworth Square Carlisle Cumbria CA1 1HB