Rail fare rises confirmed
On August 15, rail users in the UK learned that fares would increase by 3.2% in January 2019. Rail fare increases are pegged to the Retail Price Index (RPI), a measure of inflation that is considered by some to be less reliable than the lower Consumer Price Index (CPI). According to ONS figures, annual pay growth stands at 2.4%, meaning that the fare rise will leave most commuters out of pocket.
Speaking to the BBC, Transport Secretary Chris Grayling responded by calling for unions to accept pay rises linked to CPI, which would significantly depress wage increases, in order to keep fares low.
“The problem we’ve got, frankly, is that the rail system is bursting at the seams. It’s carrying twice as many passengers as it was twenty years ago. That is why we’re spending money on longer trains, it’s why we’re investing in new services in the north and the south in expanding the capacity of the network, but it’s a challenge, because people are right, the trains are full. We are running to try and keep up.
One of the things I want to do, and my challenge to the unions, is let’s get the routine increases in train fares — that are there each year to cover increases in costs — down to the lower level of inflation that is used by pretty much the whole of the rest of the public sector and much of the rest of the economy so that passengers don’t have a higher level of fare increase than I think they should have.”
CPI is the government’s preferred measure and is generally considered to be more reliable, with Bank of England Governor Mark Carney even calling on the government to axe RPI in January. However, Grayling’s proposal, also outlined in a letter to rail unions, drew strong criticism from GMB, ASLEF and the RMT.
Speaking on Radio 4’s Today programme on Wednesday Morning, ASLEF General secretary Mick Whelan said Grayling’s proposal was a ‘smoke and mirrors exercise’.
“I wouldn’t trust Failing Grayling to run a model train set — let alone Britain’s complex railway. And, anyway, we have free collective bargaining in the rail industry; government is not involved. A point Grayling — and his predecessor Patrick McLoughlin — have made on more than one occasion.”
RMT General Secretary Mick Cash condemned the fare rises, calling the increase a ‘nail in the coffin of Britain’s rip-off privatised railways’.
“With passengers already furious at the shocking level of service on Britain’s rip-off privatised railways today’s news is just another kick in the teeth that will come back to haunt both the Tory Government and the train companies alike. Chris Grayling’s desperate attempt to try and make front line rail workers pay for his incompetence and the train operators greed has backfired on him just like everyting else he touches.
“If it wasn’t for the profiteering and exploitation that is endemic after more than two decades of rail privatisation we would have enough cash in the pot to invest in staffing and infrastructure and hold down fares at the same time.
“What will really stick in the throat of the long-suffering British public is the fact that three quarters of our train services are now controlled by overseas operators with the profits from today’s fare rises shipped across the channel to subsidise passengers in Berlin, Paris and Amsterdam.
“Today’s fare rise is just another nail in the coffin of Britain’s rip-off privatised railways. It’s no longer a question of if our rail services are renationalised, it’s a question of when.”
Tim Roache, GMB General Secretary said:
“Millions of passengers face a grim start to the New Year when they are forced to pay even more extortionate prices for a frankly shocking service from the privatised rail companies.
“Rising travel costs, effectively a commuter tax, place an intolerable burden on working people, especially when wage rates don’t keep pace.
“The annual price hike seems to be the only part of the privatised railway that always runs as scheduled. Today’s announcement proves once again that the deck is stacked against ordinary working people.”
The Labour Party joined the unions’ condemnation of the fare rises, with leader Jeremy Corbyn repeating his call for the railways to be brought back into public ownership.
“Today’s train fare increases are an insult to everyone who has suffered from the chaos on Britain’s railways.
“The Government’s shambolic mismanagement of our railways has been a national embarrassment and they must now step in to freeze fares charged on the worst performing routes.
“Labour will take back control of our railways by bringing them into public ownership so they are run in the interests of passengers, not private profit.”
Labour’s Shadow Transport Secretary Andy McDonald also called on the government to abandon the ‘failed model of privatisation’.
”This is a pathetic attempt by Chris Grayling to shift the blame for Tory fares policy. The amount by which train companies can raise regulated fares is the responsibility of the Transport Secretary. He has the power to enforce this, he’s just choosing not to.
“The Secretary of State has washed his hands of years of industrial action on the railway, saying it was the responsibility of train companies, but is now intervening over staff pay. At best this is a distraction technique and at worse a recipe for years of industrial action.
“Chris Grayling made no similar request for the bosses of train companies to take a pay cut or for shareholders to refuse dividends. The men and women who run the railway are being singled out while greedy train companies are let off the hook yet again.
“The truth is that our fragmented, privatised railway drives up costs and leaves passengers paying more for less, not staff.
“The railways need serious reform, not a plea to train companies, but Ministers are persisting with a failed model of privatisation that is punishing passengers and taxpayers. Instead, Labour would use money saved from bringing passenger services into public ownership to cap regulated fare rises at the Consumer Price Index.”
The Green Party also supported renationalisation, and deputy leader Amelia Womack said the increase made Grayling’s contempt for passengers clear.
“Chris Grayling has left no doubt about where his loyalties lie — with the private companies running our railways, not those who work on or use them.
“The announcements of plans for an effective cap on rail workers’ pay, and yet more fare increases outstripping wages, lay bare Grayling’s contempt for those who depend on Britain’s railways.
“Instead of making passengers and workers foot the bill for his failings, Grayling should be making the train operators enjoying eye watering profits pay their fair share.
“But with fares rising as services descend in chaos it’s ultimately time Britain’s railways were brought back into public hands.”
Consumer group Which? issued a similar denunciation, demanding that train companies improve reliability on the railways and compensate passengers for delays. Peter Vicary-Smith, the Chief Executive of Which?, said:
“These price rises are yet more bad news for passengers, many of whom have endured a summer of chaos, including cancellations, delays, overcrowding and poor service from train companies.
“For passengers to genuinely feel they are getting value for money and a rail system that works for them, train companies must improve the reliability and safety of their services, and pay out compensation quickly and hassle-free where it is owed.”
Criticism of the fare increases was not universal. Pro-free market think tank the TaxPayers’ Alliance rejected any attempts to subsidise rail travel by freezing price rises. James Price, Campaign Manager at the TaxPayers’ Alliance, said:
“It would be wrong to announce any kind of rail fares freeze, as it would hurt both rail users as well as all taxpayers who subsidise rail in the UK, whether or not they use trains. Taxpayers would be subsidising wealthier rail users to the tune of more than £1 billion over a parliament if fares were frozen and rail users would suffer a worse experience from more crowded trains and more delays. Instead, the trade union-caused bloated wage bill should be addressed, and hated, pointless and wildly expensive projects like HS2 should be scrapped, freeing up tens of billions for more worthwhile projects in the regions.
“We should remember that most people in this country rely on their car to get to work, do the weekly shop or pick up the kids from school — it’s time we focused on smaller, less glamourous [sic] but much more productive infrastructure projects beyond the M25 that benefit commuters and deliver value for taxpayers.”
