Another Labour let down as rail fares jump

Rail fares are set to increase by 5.5% next year. On top of the 4.6% hike in March, that means fares will have gone up by 10%. This is another Labour let down, given that numerous research pieces, even from the last government, show that full nationalisation of the railways would enable a fare decrease for every passenger in the country by 18%.

Rail fares “ripping off the customer”

Labour has begun rolling out its nationalisation of only the operating rail services, not the actual trains themselves. So far, Labour has brought two formerly private operators into public ownership, South Western and Essex Thameside. It will bring the rest in-house once each operator’s contract expires.

Bruce Williamson, spokesman for pressure group Railfuture, said of the possible incoming price hike:

What would be the justification for jacking up fares above inflation? There isn’t any. It’s ripping off the customer, driving people off the trains and onto our congested road network, which is in no-one’s interest.

Speaking about Labour’s nationalisation of rail operators, Williamson said he supported a freeze on fares. But he then said savings may be “swallowed up by the Treasury and not passed back to the passengers”.

Bogus competition law

Railways and of course the trains themselves are a natural monopoly. That’s because a business cannot build another train station in a town or city to compete with the existing station that’s already in the area. That would make no practical sense, take up too much space unnecessarily and be very expensive.

Passengers need to get a train at a certain time and they have no real choice but to get the train at the nearest station. So they will buy a ticket for that train and that train only. In other words, there is no market competition between railway operators whatsoever over rail fares.

Yet in UK law, the Competition and Markets Authority (CMA) has regulatory power over the railways. And the CMA has already warned that a single publicly owned ticket retailer would break competition laws. But this obviously makes no sense, given it’s always true that a publicly owned rail network can issue the cheapest ticket possible. Why have other retailers offering higher prices?

CMA rules further prevent co-operation over financial accounts between infrastructure and operations. Previously British Rail (the former state-owned railway) had social and commercial obligations meaning that more profitable areas could make up for ones making a loss.

Accessibility

Further, disability rights campaigners have written to the Labour travel secretary to demand that Great British Railways (the new publicly owned operator system) is accessible. Their points include ensuring that there are equality standards for ticket retail and new technologies, along with deadlines for step free access and public interest duties.

It’s clear we need full integration of the railway network (including rail fares), along with public ownership of the trains themselves, in order to deliver for passengers. Public ownership in name but not in actuality is problematic because it will essentially continue the same lacklustre service.

Featured image via the Canary