Our railways need a revolution — January's fare hikes prove it

While passengers might be accustomed to such hikes, they may not continue to accept them, particularly as services worsen.

Next month will see the repetition of a familiar New Year’s tradition. In January, rail fares go up 2.7 per cent, meaning that people returning to work after Christmas will have to dig a bit deeper to fund their commute. Yet while passengers might be accustomed to such hikes, they may not continue to accept them — particularly as services worsen.

January’s rise is pegged to the Retail Price Index, which was dropped as an official statistic in 2013 after economists decided it was an inaccurate — indeed, an inflated — way to measure inflation. Promises by former transport ministers to move to the more widely-accepted Consumer Price Index have failed to materialise, leaving passengers out of pocket. It’s hardly surprising, then, that less than half of rail passengers regard their ticket as value for money.

Worse still, last year’s botched timetable reform and mishandled franchise competitions — on top of perennial concerns about reliability, punctuality and overcrowding — have fuelled widespread discontent with railway management. The current franchise model — increasingly complex, unaccountable and distant from the consumer — has struggled to address these concerns, losing passengers’ trust in the railways.

The government’s long-awaited review of the railways, undertaken by Keith Williams, is due to publish early next year. Williams is expected to recommend, amongst other things, an overhaul of the fare system. It is widely acknowledged that the current system is unfair, overcomplicated and overpriced: single tickets that cost as much as returns, differently-priced ticket options for every journey and commuter tickets modelled on an old fashioned nine-to-five make no sense, and no longer suit the way people travel.

Add to this a policy that raises the price of the most popular fares above the accepted measure of inflation, and dissatisfaction turns to anger. The government’s regulation of peak fares is an important tool in ensuring that commuting by rail is affordable to all. At present, however, it is having the opposite effect.

These factors and others combine to make a complete overhaul of the fares system — one that is guided not by the rail industry, but by the views and interests of the public, including those who do not currently find rail services relevant — long overdue. We need season tickets for part-time workers, pay-as-you-go travel, regulated peak-time fares, single-leg ticketing, multimodal fares and zonal ticketing — many of which the government has often promised, but never delivered.

We also need to think more broadly about how we fund our rail system. While the railways should continue to be paid for primarily from fares income and public investment, there are other opportunities to raise revenue, such as through land value capture and the Community Infrastructure Levy. To support this, a new arm’s-length body should be established to develop business models that capture the full financial benefit of rail.

Passengers urgently need a railway system that they can enjoy, rather than endure them through gritted teeth. The next government has an opportunity to revolutionise Britain’s railways — it must take it.

Darren Shirley is chief executive for the Campaign for Better Transport