July RPI is -1.4%

[philjo]

BBC news reports that the July RPI has risen slightly to -1.4% this is the rate that will be used to set the January rail fares.

http://news.bbc.co.uk/1/hi/business/8206748.stm

 

[johnb]

Is it definitely the case that fares rises are RPI+1, rather than the higher of 0 and RPI+1?

 

[Mojo]

Didn't someone here share the LM franchise requirements which said that fares could rise by either 10p or RPI+1%?

 

[krus_aragon]

The BBC have now got an article on the RPI's effect on rail fares in particular:

http://news.bbc.co.uk/1/hi/business/8206942.stm

 

[jopsuk]

Oh BBC- update your library pictures! curently illustrated with a picture of a Connex South Central slammer!

link if needed

 

[glynn80]

Is it definitely the case that fares rises are RPI+1, rather than the higher of 0 and RPI+1?

This is a very interesting point that reminded me of a similar point made by collybs a while ago on this forum regarding London Midland's franchise agreement (http://www.railforums.co.uk/showpost.php?p=294636&postcount=16)

After some investigation I have found that the assertions made in collybs's post were correct and written into the franchise agreements of the TOCs is the following clause:

SCHEDULE 5.5
Regulation of Individual Fares

2.1 The Regulated Price or the Regulated Child Price (as the case may be) for any Fare in any Fare Year shall be equal to the greater of:

(a) Preceding Year Ticket Price + £0.10p; and
(b) Preceding Year Ticket Price x PII

(PII = Permitted Individual Increase in any Fare Year = (100xRPI+K+5) / 100; i.e. each individual fare can rise by the RPI +5%)

So the above is stating that individual fares can rise by the RPI+5% (further in the franchise it states the basket average must not exceed RPI+1%), but if for any reason the RPI+5% figure were to mean fares increases the following January were to be lower than £0.10 or even negative, the £0.10 increase floor would kick in and that would me the minimum increase instead.

If the above was to still apply come January this would completely contradict Lord Adonis's confirmation in his oral evidence to the Transport Select Committee, that if the RPI was to be negative come July 2009, there would be fares reductions in the following January.

(Also worth bearing in mind that, Adonis has also confirmed that the previous flexibility TOCs had, whereby regulated fares were grouped into what were known as fares "baskets" and the RPI cap (RPI+1%) was applied to the total value of that basket as opposed to individual fares will now cease. Previously TOCs were permitted to increase some individual fares within the basket by more than the RPI+1 formula (up to maximum of 5% points; as seen above) provided that the total average did not exceed this.)

Q296 Chairman: When you came before this Committee last time you gave a commitment on two things. First, you said that the formula for regulated price increases (retail price index +1%) would remain and that would remain even if RPI was more stable or negative. Secondly, you said you would in practice abandon the basket of fares and that that increase - or indeed decrease - would apply to every individual regulated fare. Are you committed to those promises you gave us? Is it actually going to happen?

Lord Adonis: Absolutely. We stand by those two policy announcements. RPI is, at the moment, at -1.1%. I see that Oxford Economics estimate that in July it could be -2%. If it is indeed -2% then most regulated fares will fall next January. I gave that commitment to the Committee when I last appeared and I repeat it today. On your second point about the basket of fares and moving the flexibility with the basket, we stand by that policy change too and that will also be carried into effect next year, so there will not be the flexibility for fares to change within the basket as has been the case up to now.

Now many people on the forum will be thinking, are Adonis's promises deliverable considering what the TOCs have written into their franchise agreements. The answer is yes, the Secretary of State has considerable power with regard to altering fares regulation within the duration of the franchise agreement:

SCHEDULE 5.7
Changes to Fares and Fares Regulation

5. Changes to Fares Regulation

The parties agree that the Secretary of State shall have the power at any time and on more than one occasion during the Franchise Term to alter the obligations of, and restrictions on, the Franchisee under Schedules 5.2 (Franchisee's Obligation to Create Fares) to 5.8 (Fares Regulation Information and Monitoring) inclusive for any Fare Year, or part thereof (including alteration of the value of k under paragraph 4.2 of Schedule 5.4 (Regulation of Fares Basket Values) and/or paragraph 2.2 of Schedule 5.5 (Regulation of Individual Fares)). The exercise by the Secretary of State of his powers under this paragraph 5 shall be a Change.

The powers the above statement give the Secretary of State, is the ability to alter the regulation printed in the franchise agreement between Schedules 5.2 to Schedules 5.8. As can be seen above Regulation of Individual Fares is Schedule 5.5 and therefore it is within Lord Adonis's remit to alter said regulation as he sees fit.

 

[OwlMan]

But does this not constitute a change to the agreement, and Lord Adonis said that they would not change the franchise agreements.
Also as it is an official change cannot the TOC insist on a rerun of the financial model for the franchise and therefore change the amount paid to/from the TOC to the DfT.

(Apologies I am at work in Belgium at the moment and can not get the franchise agrrement up on my computer so am writing the above from memory)


peter

 

[LondonLarry]

From the BBC website:

"For the first time in a generation passengers will see their fares fall," Transport Secretary Lord Adonis said.

A few errors in this statement: Fares fell in 2003 on South Eastern(?) which isn't a generation ago (unless life expectancy has suddenly dropped!); the fall in fares only applies to the average of all regulated fares.

He should've said: "For the first time in over 5 years, some passengers will see some fares fall for certain journeys."

 

[johnb]

Not even that, as fares for some journeys have fallen within the last five years (e.g. the widespread introduction of Advance tickets on medium-distance routes; FGW and SWT's changes to the peak/off-peak structure to make some former peak journeys 'middle')

 

[yorkie]

Not even that, as fares for some journeys have fallen within the last five years (e.g. the widespread introduction of Advance tickets on medium-distance routes; FGW and SWT's changes to the peak/off-peak structure to make some former peak journeys 'middle')

Introducing a new ticket at a lower price but with massive restrictions and renaming an existing ticket and making it more expensive does not count as fares having fallen in my opinion!

 

[glynn80]

Introducing a new ticket at a lower price but with massive restrictions and renaming an existing ticket and making it more expensive does not count as fares having fallen in my opinion!

The single fares on the route definitely fell by 50% because of FGW's fares reshuffle.

 

[yorkie]

But how many people only use rail for one way journeys? Certainly not the majority. It is to be welcomed but it is a very small concession that they did just to cloud the issue and pretend that it's a good deal for customers when, in reality, the majority of customers are being screwed.

 

[glynn80]

But how many people only use rail for one way journeys? Certainly not the majority.

I have some statistics from a report carried out by Faber Maunsall in 2008:

Proportions by ticket type

Open Return- 23%
Open Single- 4%
Saver/Cheap Day Single- 7%
Saver/Cheap Day Return- 27%
Season- 10%
Advance Purchase- 26%
Other- 2%

The single ticket types are 4% (Open Single) + (7% Saver/Cheap Day Single) + 26% (Advance Purchase) = 37%

If we assume that a proportion of those purchasing Advance Purchase may be returning by purchasing two Advance Purchase singles (which are cheaper than walk-on ticket types) then the best way to calculate the proportion that were only making single journeys, would be using the figures we have for Open Returns & Open Singles and Saver/Cheap Day Singles & Saver/Cheap Day Returns.

23/4 =5.75
27/7 = 3.857

Average of the two = 4.678571429

26%/4.6785714295 = 5.556251908 (5.56 2dp)

So the exact estimate of those passengers travelling on Single tickets is 4 + 7 + 5.56 = 16.56%

Agreed this figure is not particularly high but it is significant enough to make a difference.

But the real point I was trying to put across was the fact that some fares have been lowered by FGW and for whatever reason those making off peak one-way journeys will benefit while most of those making off peak return journeys have lost out.

 

[yorkie]

At roughly 83% of passengers losing out compared to roughly 17% benefiting, FGW are laughing all the way to the bank while they are able to boast that some people are better off. They are clever and sneaky.

 

[glynn80]

At roughly 83% of passengers losing out compared to roughly 17% benefiting, FGW are laughing all the way to the bank while they are able to boast that some people are better off. They are clever and sneaky.

Not exactly, 83% of passengers on the FGW route will not be losing out because of the fares reshuffle.

The 17% figure I gave above was an overall figure to your question of "how many people only use rail for one way journeys?". It was not a specific answer to the FGW example and did not distinguish passengers by ticket type (passengers travelling on ticket types other that the Saver have not been affected by higher/lower prices).

When applied to the specific example of FGW, the Saver/Cheap Day Single and Saver/Cheap Day Return proportions give us most of the information we need. However we cannot take those figures exactly as they are given, because it is only people travelling in the morning peak period and the evening peak period (as stated in the validity codes) that have been affected by the increased prices.

Taking the Bristol to London route as an example, the new fares structure has restricted potential travelling time for those on the £49.00 ticket (previously SVR now SSR) by 3 hours and 10 minutes (190 minutes) per day, out of a total potential travelling time of 18 hours 43 minutes (1123 minutes) per day.

1123/190 = 5.91052632
27% (proportion of those travelling on Saver/Cheap Day Returns)/5.91052632 = 4.5681211% of passengers (4.57 2 d.p.)

Therefore 4.57%* of passengers on the FGW route are now worse off because of the changes being brought in in September.

When we take a look at the proportion of people affected by the reduction in prices for the SVS ticket type & the new lower priced SSS ticket type, we can take the 7% figure as given in the Faber Maunsall data. This is because passengers travelling on those ticket types will not just benefit from cheaper prices at specific times of the day, the SVS/SSS ticket price is cheaper for passengers at all times of the day (that the previous SVS used to be valid at).

So contrary to what was originally stated, overall it seems that in fact more passengers are better off because of FGW's fares reshuffle. Sorry to disappoint you yorkie!

*I realise this figure won't be totally accurate because it does not take into account the numbers of people travelling at specific times of the day (i.e. peak or off peak), if anyone has any figures/proportions that relate to those numbers, I could give a higher weighting if more passengers on walk-on tickets were travelling in the peak.

 

[yorksrob]

Oh BBC- update your library pictures! curently illustrated with a picture of a Connex South Central slammer!

link if needed

Ha ha, It always cheers me up to see out of date pictures of slammers in the news (The Times have been using the same picture of VEPS outside Victoria for about ten years now!)

On a more serious note, I read that West Yorks Metro and South Eastern Trains have been given special dispensation to raise controlled fares to pay for new trains and infrastructure improvements respectively. Since I commute in West Yorks and my family whom I visit by train lives in Kent, I guess that means I lose out. I certainly hope these new trains materialise though, and preferably on the Hallam line.

 

[yorkie]

That analysis is completely flawed as it assumes there is an equal chance of a passenger travelling at 1am as there is at the now barred times of 8 or 9am. Most passengers wish to travel at popular times.

 

[glynn80]

That analysis is completely flawed as it assumes there is an equal chance of a passenger travelling at 1am as there is at the now barred times of 8 or 9am. Most passengers wish to travel at popular times.

It is not completely flawed. It just does not take into account that particular factor (which I did state at the bottom of the post).

It is certainly more accurate than your 83% assertion especially considering only 27% of passengers travel using the Saver/Cheap Day Return ticket type overall.

I reckon if we were to take into account that more people travel at certain times of the day, it may increase the percentage to maybe a maximum of 15% but anywhere within that range is pretty reasonable. The whole point of the post was to put into perspective that it is only a very small proportion of the overall travelling public that will be affected by these changes and in fact some will benefit.
--- old post above --- --- new post below ---

OK, after some searching I have found the figures needed to take into account the morning and afternoon peak periods.

The National Rail Travel Survey (http://www.dft.gov.uk/pgr/statistics/datatablespublications/railways/nrtsfnlreport2008.pdf) states that

"The majority of rail travel occurred in two daily peaks. With 36 per cent of journeys begun between 6.30am and 10am and 36 per cent begun between 4pm and 8pm."

So 72% of travel occurred during the morning (3.5 hours) and afternoon (4 hours) peaks (total of 7 hours 30 minutes). The change from the SVR to SSR validity code has restricted 3 hours 10 minutes of the total 7 hours 30 minutes travel time in the peaks. If we call that just less than half of the peak period we can say that approximately 30% of people travelling on the SVR ticket type are affected by this change.

So there is a ratio of 7:3 of people who are not affected against those who are affected.

Taking the 27% figure of passengers using the SVR/CDR ticket type, dividing that by 10 (7+3) and then multiplying that number by 3, we are left with 8.1% of people on the FGW route are affected.

So I do agree my figure of 4.57% in my previous post was incorrect. In fact approximately 8.1% of people on the FGW route are now adversely affected by the change as opposed to 7% who are now better offer because of the fares reshuffle.

Again yorkie, this is nowhere near the 83% figure you plucked from my reply.

 

[LondonLarry]

On a more serious note, I read that West Yorks Metro and South Eastern Trains have been given special dispensation to raise controlled fares to pay for new trains and infrastructure improvements respectively. Since I commute in West Yorks and my family whom I visit by train lives in Kent, I guess that means I lose out. I certainly hope these new trains materialise though, and preferably on the Hallam line.

I think SouthEastern's increase in RPI+3% for regulated fares

 

[nedchester]

The problem with all this is that after the great fanfare of 'simplification' of rail fares it is anything but.

If we are to have an off-peak / peak / advance system then it should be simple and easy for passengers to understand.

We should have:

ANYTIME - valid anytime

OFF -PEAK - valid after 0900ish (possibly valid anytime on non London routes just like savers used to be)

ADVANCE - cheaper than off peak.

A truly simple system.

 

[LondonLarry]

The problem with all this is that after the great fanfare of 'simplification' of rail fares it is anything but.

If we are to have an off-peak / peak / advance system then it should be simple and easy for passengers to understand.

We should have:

ANYTIME - valid anytime

OFF -PEAK - valid after 0900ish (possibly valid anytime on non London routes just like savers used to be)

ADVANCE - cheaper than off peak.

A truly simple system.

If an Off Peak ticket is valid at any time on non-London journey, it ceases to be an Off Peak ticket and becomes an anytime.

Like it or not, the railway franchises are run as businesses and will try to make money however they can.

I don't think such a flat restriction would work, although I agree that Fares Simplification hasn't actually simplified anything other than ticket names. I still need to stop and remind myself that an Off Peak Return is a period return and not a day return!

 

[nedchester]

If an Off Peak ticket is valid at any time on non-London journey, it ceases to be an Off Peak ticket and becomes an anytime.

Like it or not, the railway franchises are run as businesses and will try to make money however they can.

I don't think such a flat restriction would work, although I agree that Fares Simplification hasn't actually simplified anything other than ticket names. I still need to stop and remind myself that an Off Peak Return is a period return and not a day return!

Funny how there are little or no such restrictions in European countries?? There again they haven't got the fragmented unworkable system we have over here.

 

[LondonLarry]

Funny how there are little or no such restrictions in European countries?? There again they haven't got the fragmented unworkable system we have over here.

I don't think the present franchise system in the UK is perfect, but neither are state owned railways which are common in Europe. The grass always seems greener on the other side and it often isn't.

 

[nedchester]

I don't think the present franchise system in the UK is perfect, but neither are state owned railways which are common in Europe. The grass always seems greener on the other side and it often isn't.

Damn right it's not perfect. We should be trying to aim for a public transport system similar to that of Switzerland. At the moment we move further and further away from that each day.

My experience of Europe is that the grass is very much greener on the other side!

 

[LondonLarry]

Damn right it's not perfect. We should be trying to aim for a public transport system similar to that of Switzerland. At the moment we move further and further away from that each day.

My experience of Europe is that the grass is very much greener on the other side!

I take it you've stopped travelling by train in the UK and only use it abroad?

 

[nedchester]

I take it you've stopped travelling by train in the UK and only use it abroad?

No but the European approach to public transport should be the model we adopt.

That said every time I go to Europe I realise what a poor set up we have here.

 

[LondonLarry]

No but the European approach to public transport should be the model we adopt.

That said every time I go to Europe I realise what a poor set up we have here.

I've used intercity services in Europe so don't know much else about their approach to public transport. What sort of things should we adopt?

 

[paul1609]

No but the European approach to public transport should be the model we adopt.

That said every time I go to Europe I realise what a poor set up we have here.

Is there a "European approach" to public transport?
If we adopted the French Model I reckon as much as 20% of the regional network in the UK would be mothballed and the services bustituted.

 

[Mojo]

Is there a "European approach" to public transport?
If we adopted the French Model I reckon as much as 20% of the regional network in the UK would be mothballed and the services bustituted.

Would that also include compulsory reservations on some InterCity services?

 

[nedchester]

I've used intercity services in Europe so don't know much else about their approach to public transport. What sort of things should we adopt?

In Switzerland there as at the very least an hourly service on every line. Trains connect with buses, boats and even cable cars. True integrated transport.

Oh and everyone can buy a railcard!!!!