Fare increases - folk don't like them

[Flamingo]

Bearing in mind Starbucks etc., I wonder to what extent these companies are making a true loss or small profit rather than a a figure engineered through accounting practices which shift profit to other parts of the overall business ?. We have no idea.

The problem is that the cost of UK railways has risen significantly since privatisation and these costs appear to be significantly above those in other Europeam countries. Government has failed to scrutinise and control these costs and now follows a policy that shifts more and more of these extra costs from the public purse to the traveller.

What opportunity does the traveller have in understanding why rail travel costs so much ?. What controls do they have in refusing to pay what they perceive as unreasonable charges ?. Regular rail travellers are dependant on rail and often have virtually no means to use an alternative mode of transport, at least in the short-term. They therefore have no way of directly impacting on the income of the franchise companies and virtually no impact on infrastructure, rolling stock and other costs. The situation is out of control and will only get worse.

No wonder rail travellers are upset. A nationalised system would at least provide more transparency to illustrate where costs occurred and where profit was being made. The accounts of East Coast should be making clear exactly why fares are rising and why train travel costs what it does.

Probably right. The biggest black hole in the railway, however, is Network Rail, the government (i.e public) owned section of it.

 

[DarloRich]

Why are some TOCs claiming that they're paying premiums and actually making a loss then?

Wouldn't the money from the Government (and nobody has said that this doesn't still happen under a privatised railway have they?) still be needed, or is a nationalised railway somehow able to reduce all of the costs and still maintain the same - or supposedly better - service?

At least the nationalised industry wouldn't take the subsidy and use it to manage shareholder dividends or transfer the potential profits away to help prop up another section of the business! (it is alleged!)

The TOCs make a fortune for doing very little. They simply have to sit back and wait for the money to roll in.

Engineering work taking place. Kerching. Signal failure. Kerching. Suicide. Kerching. Freight train broken down. Kerching. Other TOCS train broken down. Kerching. Bad weather. Kerching. Delay attribution. Kerching. One of our train broken down. SH8t blame someone else and put a kerching claim in and see what happens!

The whole system is designed to ensure they keep getting money. Even if they cock up their forecasts on passenger numbers we have to bail them out by giving hem even more money through revenue support!

Hardly the supermen of the capitalist system we were promised. The cut throat, dog eat dog world of private enterprise was supposed to save the day by increasing completion, making the system more efficient and thus providing a better, cheaper product to the consumer and taxpayer! Has it b*ll*cks! The system is like the economy of the most tin potish, despot run, little country in the world!

It is a total shambles!

 

[billio]

Why are some TOCs claiming that they're paying premiums and actually making a loss then?

Wouldn't the money from the Government (and nobody has said that this doesn't still happen under a privatised railway have they?) still be needed, or is a nationalised railway somehow able to reduce all of the costs and still maintain the same - or supposedly better - service?

Bearing in mind Starbucks etc., I wonder to what extent these companies are making a true loss or small profit rather than a a figure engineered through accounting practices which shift profit to other parts of the overall business ?. We have no idea.

The problem is that the cost of UK railways has risen significantly since privatisation and these costs appear to be significantly above those in other Europeam countries. Government has failed to scrutinise and control these costs and now follows a policy that shifts more and more of these extra costs from the public purse to the traveller.

What opportunity does the traveller have in understanding why rail travel costs so much ?. What controls do they have in refusing to pay what they perceive as unreasonable charges ?. Regular rail travellers are dependant on rail and oftenn have virtually no means to use an alternative mode of transport, at least in the short-term. They therefore have no way of directly impacting on the income of the franchise companies and virtually no impact on infrastructure, rolling stock and other costs. The situation is out of control and will only get worse.

No wonder rail travellers are upset. A nationalised system would at least provide more transparency to illustrate where costs occurred and where profit was being made. The accounts of East Coast should be making clear exactly why fares are rising and why train travel costs what it does.

 

[Westboy]

I haven't read all the pages on this thread - but do other countries have so many commuters travelling such long distances as the UK? Solution: Devolve as many government agencies as possible.

Not sure that would make a huge difference, but the wider point is true- the UK is innordinatly and increasingly London Centric. A few token relocations (the BBC for example) are not changing that.

It amuses me for exaple that in Germany there are three major international airports- at Frankfurt, Munich and Berlin (and Berlin will become more so with Brandenberg this year). Frankfurt and Munich are 180 miles aprt, which is London to Bradford give or take. Frankfurt to Berlin is 260 miles, only 15 or so more than London to Newcastle.

All those airports are viable and thriving. Why? Because those three cities, districuted across the country are all major economic hubs. The same is not true here, whatever Manchester protests, and that is the fault of sucessive governments going back 100 years.

It's a trivial example, but it illustrates the difference in economic dispersion.

 

[Holly]

Well, privatising the railway was undoubtedly a huge mistake. Whether renationalising now is the answer, I'm not at all sure. We are where we are. ...

For nationalisation to be affordable, the things (mostly assets) a British Rail would want to buy have to be for sale at peppercorn prices. To make things financially near worthless is within the power of government, through the use of the power to tax.

Of course BR would have to pay the same tax too, under EU rules, but it would essentially be paying it to itself.

 

[andykn]

Actually that's £21 per day if you work on *every* Monday to Friday per year and £24 with 6 weeks holiday.

I used to be able drive from Ipswich to London* (parking at Leytonestone) for £12 petrol, £1 parking and £4 tube fare. So that would make it £15 from Colchester not including others costs, or £20 on a Monday-Friday.

This was a 1.3l petrol Yarris, capable of 60MPG. I dare say that a smaller, 2nd hand diesel would be able to, including running costs, meet the £24 per day target. Particularly if you add on another £6 per day for public transport to Colchester station and from Liverpool Street. Of course if four people lift shared, you'd undercut the railway massively!

But even if I doubled the fuel cost to account for all car costs, that would make it £30 a day. So for £6 per day extra compared to the railway, you could own and drive a massive metal box around and use large amounts of oil. The railway should be at least half the price, maybe even a quarter because of the economy of scale, the fact that the train is in use all day and the fact that the energy costs are shared!

*Actually most Saturdays I drove Ipswich - Colchester, Colchester-Braintree, Braintree-London and London - Ipswich, but the £12 figure is based on a journey from Ipswich.

You're forgetting the drop in mpg you'll get in rush hour, and the extra time it would take. Spending 4 hours a day in heavy traffic in a Yaris will be far more physically demanding than sat reading a book on the train for a couple of hours.

Why you think the railway, which has to amortise the capital costs you have left out completely should be half the price for twice the comfort and a quicker journey is inexplicable.
--- old post above --- --- new post below ---

Go on then - give us a GOOD reason why German citizens can purchase a ticket for £3500 that gives unlimited travel across the country all year and we cannot?

Because they don't have a huge proportion of their network (and population) all concentrated into one small corner of their country.

 

[Goatboy]

However, if a state-run railway can't make a profit, how does it invest in the future? I can only see that it would eventually begin to suffer as the infrastructure began to crumble, and then the railway would have to go begging to the Government for a hand-out, only to be given scraps.. and things would very quickly begin to go to pot. Forget all the major capital projects, we'd be finding ourselves unable to fund the existing network and I'd still like to know how we could get the huge cost of Network Rail down considering that's the one aspect that is effectively state-run...

...But I suppose when this happens, we could always try and privatise the railway again.

So a nationalised railway cannot invest in the future or major capital projects?

Did we imagine the ECML route modernisation? Sprinterisation? IC125?

 

[PR1Berske]

So a nationalised railway cannot invest in the future or major capital projects?

Did we imagine the ECML route modernisation? Sprinterisation? IC125?

Ah but that was then and this is now, and we can't possibly consider the State is well enough to fund projects like that anymore. It's just not possible (or justifiable.)

 

[87015]

Ah but that was then and this is now, and we can't possibly consider the State is well enough to fund projects like that anymore. It's just not possible (or justifiable.)

Apart from the fact that the state is paying for the vast majority of current rail investment anyway?

 

[GNER 91128]

I was just thinking maybe rail fares should go up over the May bank holiday when or when the weather is good, no one will care then! Plus we won't have to see all the weary passengers outside [insert main line station here] in the cold and dark after a long day at work.

 

[Pugwash]

Some other considerations are the hidden costs of a private railway.

BR used to self insure, the many private companies involved all have to pay for insurance themselves, this costs a small fortune.

Train leasing companies have to make a decent return on capital for the ( mainly ) banks that own them. Again there is a saving to be made by the stock being financed at relatively low interest rates and owned as a central reserve.

 

[Dave1987]

This only franchise that I think makes a clear profit is east cost but that only made slight profits, I believe someone quoted earlier in thread how much was actually made.

The problem is is TOC's are compelled to run all services even ones that are hardly used and make a loss. I'm sure if they had their way they would only operate the most profitable ones. This means that the have to be backed by govt subsidy. Otherwise a beeching style cull of non well used services would probably happen. Have you ever been on a train that is virtually empty? The TOC will be making a loss on that service. Without subsidy that is not sustainable. It is a myth that TOC get massive profits each year!

 

[GNER 91128]

Why do trains need to be leased in the first place? (might be a naive question) Couldn't the rolling stock just come with the line that the TOC has won a franchise on? This might help the TOCs put in orders for new trains id they have the ability to buy and sell stock that they own.

 

[AndyLandy]

So, the summary of this thread is "Fares went up again, so we interviewed some disgruntled commuters, since that makes better telly."

Nobody likes paying more money for the same things, but that's life. I resent that I used to buy bags of coffee for £2, but now they're over £3. I've just had to accept that and fit my budget around it. Same thing applies to my travel.

All the arguments of nationalisation vs. privatisation are invariably straw men, particularly when Bob Crow opens his mouth. I think the current system is an utter crock, but I believe it's possible to run a better railway, either privately or state-owned.

If you decide to run a form of privatised railway, then you have to accept that private companies will have to turn a profit. You just have to ensure that you get some investment from them in the first place, then let them reap the rewards.

 

[87015]

This only franchise that I think makes a clear profit is east cost but that only made slight profits, I believe someone quoted earlier in thread how much was actually made.

The problem is is TOC's are compelled to run all services even ones that are hardly used and make a loss. I'm sure if they had their way they would only operate the most profitable ones. This means that the have to be backed by govt subsidy. Otherwise a beeching style cull of non well used services would probably happen. Have you ever been on a train that is virtually empty? The TOC will be making a loss on that service. Without subsidy that is not sustainable. It is a myth that TOC get massive profits each year!

NX rail division (so NXEA and c2c) made profits of £43m post-premiums in 2011 on a margin of 6.3%. First Rail division was £55.7m. How many 321 refurbs, 172 carriages, station re-builds or whatever would that pay for if it stayed within the industry?

 

[Dave1987]

Why do trains need to be leased in the first place? (might be a naive question) Couldn't the rolling stock just come with the line that the TOC has won a franchise on? This might help the TOCs put in orders for new trains id they have the ability to buy and sell stock that they own.

Rolling stock is leased to stop a TOC from selling their trains at ridiculous prices to next TOC if they lost the franchise. Instead they pay leasing costs. Up to ROSCO to improve trains or buy new ones.

 

[Pugwash]

So, the summary of this thread is "Fares went up again, so we interviewed some disgruntled commuters, since that makes better telly."

Nobody likes paying more money for the same things, but that's life. I resent that I used to buy bags of coffee for £2, but now they're over £3. I've just had to accept that and fit my budget around it. Same thing applies to my travel.

All the arguments of nationalisation vs. privatisation are invariably straw men, particularly when Bob Crow opens his mouth. I think the current system is an utter crock, but I believe it's possible to run a better railway, either privately or state-owned.

If you decide to run a form of privatised railway, then you have to accept that private companies will have to turn a profit. You just have to ensure that you get some investment from them in the first place, then let them reap the rewards.

The problem is rail users are being squeezed from all sides and they have woken up to higher fares again with little or no pay rise themselves, certainly not an above inflation increase in wages.

 

[EM2]

Ah but that was then and this is now, and we can't possibly consider the State is well enough to fund projects like that anymore. It's just not possible (or justifiable.)

Apart from the fact that the state is paying for the vast majority of current rail investment anyway?

And where is that money coming from? Is it from premiums paid by TOCs and indirectly from fares paid, or another source?

 

[Dave1987]

The problem is rail users are being squeezed from all sides and they have woken up to higher fares again with little or no pay rise themselves, certainly not an above inflation increase in wages.

Sorry but how is that the fault of the railway? Retail prices going up all the time even though they proclaim to be lowering them!

 

[jon0844]

So a nationalised railway cannot invest in the future or major capital projects?

Did we imagine the ECML route modernisation? Sprinterisation? IC125?

Of course it can - but you can imagine how hard it might be to secure such money, or the temptation to do it on the cheap by cutting corners (good to see you mentioned the ECML already!).

Rather than have profits that could be invested, you'd have profits going to central funds to cover other things and then having to beg for handouts like everyone else.

The problem is rail users are being squeezed from all sides and they have woken up to higher fares again with little or no pay rise themselves, certainly not an above inflation increase in wages.

As I see it, going by my mostly off-peak travel now in the week; we have far too many trains running in the peaks to cope with the immense number of commuters that seem to be growing every year. And stacks of trains, as seen at Hornsey or other sidings, are sitting empty and not earning money for most of the day and late evening.

The trains I use, unless it's half term or something, are likely to be fairly empty in the day (especially mid-morning) and probably running at a loss. It's probably only on a weekend that trains are fairly well used throughout the day. But even then, a lot of trains are not used at all.

All the money being spent isn't really for the sort of improvements Joe Public thinks of - paying more money this year and getting a brand new station next year, new trains and so on - it's for things like lengthening platforms and other infrastructure upgrades to simply let the railway cope between 6-9am and 4-7pm. If the service merely remains the same as it was before, there were probably expensive improvements made somewhere along the line (sic).

If there were less demands in the peak periods, there wouldn't be the need to have as much rolling stock (and arguably less need for drivers etc) and if you could spread usage out, that would be even better. That would actually bring costs down and potentially see a cut in fares (along with other cuts in the railway, as timetables would be adjusted accordingly).

In effect, the railway would benefit from these moaners actually giving up and getting back into their cars as it would then create room for the few that really don't have a choice. The thing is, they'll come back as when I tried driving for a while I soon realised it was a horrid experience.

Sure you have your own private cabin, can listen to anything you want on the radio and when there's no traffic and you find a parking space easily, you think 'wow that's not so bad' - but eventually you start to find those days become the exceptions and half the time you're stuck in traffic (traffic that you know from previous experience has no reason to exist because it's just down to idiots blocking junctions ahead etc) and being powerless to do anything after all the alternative routes have been tested and discounted.

 

[sheff'd victoria]

Or maybe "why should people on busy lines elsewhere pay extra to subsidise fairly empty trains in rural areas like Lincolnshire"?

Empty

The Sheffield Midland - Lincoln service is always full to bursting with passgengers, passgengers between Sheffield & Worksop have been asking for an every 30 minute service for years due to the demand

as for the other lines i.e Brigg , Barton , Spalding etc etc they are not full as the service provided is on a anti-social timetable in most cases

However on your point of subsidising Lincolnshire, you will find this is the fault of Network Rail , their are so many signal boxs in Lincolnshire that the staffing costs are far too much, this of course is then passed on to the T.O.C's who pop them onto the fares

 

[fusionblue]

I've never really understood how (or even why) "to pay for the 395s" Southeastern was granted permission to increase rated at 3% PA higher than than all other TOCs - even if you are on a NOT-HS1 ticket or lived in a metro area where HS1/mainline services don't apply to you anyway.

 

[DarloRich]

However on your point of subsidising Lincolnshire, you will find this is the fault of Network Rail , their are so many signal boxs in Lincolnshire that the staffing costs are far too much, this of course is then passed on to the T.O.C's who pop them onto the fares

How do you propose to pay for the upgrade of all the expensive signalling then? :roll:

 

[chris89]

Erm I thought Fares went up by average 4% and wages just didn't. Unless you were an MP or on benefits of course.

I haven't looked if any other comments have mentioned it. (Due to being in Edinburgh/ returning now on the train with only a tablet to access net etc) Don't start bashing or criticising people on Benefits, they have reason less the 1% the pass two years. For carers allowance it has risen only a matter of pence, compared to other things.

Also I do actively look for work but sadly due to pubic transport in my area ends early and no car it makes it harder.

 

[jon0844]

Sorry but how is that the fault of the railway? Retail prices going up all the time even though they proclaim to be lowering them!

That's a good point. Many other products and services can stay at the same price, or even go down, but loads of tricks can be employed - like reducing the size/weight of the product, using cheaper materials/ingredients, reducing what you get for your money etc.

Despite that, many things like packs of crisps or chocolate bars have both reduced in size and gone up in price. Electronic goods are cheaper thanks to the economy of scale, but many are also far more likely to fail (and cynics might even say designed to fail) sooner than they need to - although people gladly upgrade things for something shinier anyway. In effect, they're still scrapped long before they actually broke.

Airlines like Ryanair like to keep the same headline prices, so find other clever ways to make more money by adding new fees.

All very cleverly done. Banks do the same by reducing the benefits on your account while grudgingly increasing your monthly fee by £1 (hey, just £12 a year more for less things than they gave you last year) and people don't seem to kick up much of a fuss then.

But the railway can't really use these clever tricks. Costs go up. Wage bills go up. Fuel costs go up. Can anyone tell me what things get cheaper, to suggest that there might be a way to fund price cuts? I see Network Rail as the biggest drain time and time again - and the place to make savings - but that doesn't seem to be happening. If it was, and costs were reducing all the time, I'd be far easier to convince that a nationalised railway could work.

 

[DarloRich]

That's a good point. Many other products and services can stay at the same price, or even go down, but loads of tricks can be employed - like reducing the size/weight of the product, using cheaper materials/ingredients, reducing what you get for your money etc.

Despite that, many things like packs of crisps or chocolate bars have both reduced in size and gone up in price. Electronic goods are cheaper thanks to the economy of scale, but many are also far more likely to fail (and cynics might even say designed to fail) sooner than they need to - although people gladly upgrade things for something shinier anyway. In effect, they're still scrapped long before they actually broke.

Airlines like Ryanair like to keep the same headline prices, so find other clever ways to make more money by adding new fees.

All very cleverly done. Banks do the same by reducing the benefits on your account while grudgingly increasing your monthly fee by £1 (hey, just £12 a year more for less things than they gave you last year) and people don't seem to kick up much of a fuss then.

But the railway can't really use these clever tricks. Costs go up. Wage bills go up. Fuel costs go up. Can anyone tell me what things get cheaper, to suggest that there might be a way to fund price cuts? I see Network Rail as the biggest drain time and time again - and the place to make savings - but that doesn't seem to be happening. If it was, and costs were reducing all the time, I'd be far easier to convince that a nationalised railway could work.

Please outline some of the saving that can be made? It would be intresting to see what ideas can be generated.

 

[sheff'd victoria]

How do you propose to pay for the upgrade of all the expensive signalling then? :roll:

it comes out of the Network Rail budget , Lincolnshire is the land that the Department for Transport forgets is their

Their is a lot of wasted money been spent by the DfT and the government over the years that could have and should be spent on improving " regional services / infrastructure.

 

[Tracky]

The fares vary depending on demand and when you purchase them - sometimes cheap fares are available on the day of travel. Strangely I checked mine prior to departure and it would have been £50 to buy on the day online. It cost me about £10 on top to get to and from the Airports at either end.

So ticket wise you are comparing a flexible ticket with a specific flight pre-booked ticket and not including the extras...

 

[DarloRich]

it comes out of the Network Rail budget , Lincolnshire is the land that the Department for Transport forgets is their

Their is a lot of wasted money been spent by the DfT and the government over the years that could have and should be spent on improving " regional services / infrastructure.

what on earth are you talking about? There are about 4 people who live in Lincolnshire! How much do you expect them to spend on a rural, relativly affluent, low population area? How much do they spend on rural North Yorkshire, or County Durham or Devon and Cornwall?

Should the passengers ( the service users) not fund the cost of some of the upgrades? Should it all fall on the government?

 

[Pugwash]

Sorry but how is that the fault of the railway? Retail prices going up all the time even though they proclaim to be lowering them!

It is not the fault of the Railway but the government, who control the railway.

They have put a pay freeze on many public sector workers whilst telling toc's to put up fares.

The government do a nice line in spin in trying to deflect the blame onto TOC's