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Inflation-busting rail fare rises 'are national scandal'
Dick Murray, Transport Editor30 Dec 2008
UNIONS condemned London's rail bosses today for levying maximum fare rises while reaping "bumper profits" of tens of millions of pounds.
The RMT union described fare rises of between six and 11 per cent, to come in on Friday, as a rip-off.
Every rail company has increased average fares by the maximum allowed - inflation plus one per cent. The Retail Price Index of inflation in July (five per cent) is used to allow the operators to prepare tickets and literature. Since then, the RPI has fallen to three per cent and is predicted to plunge towards zero, or even lower. The Office for National Statistics says the most significant "downward pressure" on inflation was fuel and lubricants, one of the key costs for transport operators.
RMT leader Bob Crow said: "Passengers being told to fork out huge increases in fares and season tickets for overcrowded services have every reason to ask how the operators can rake off such huge amounts of their money as 'profits.'"
The union highlighted the companies running London's busiest commuter routes and listed their latest profits.
Go-Ahead Group, the parent company of Southeastern, Southern and London Midland, saw its operating profit increase by 16.8 per cent to £77.2 million for the year ending 28 June.
Southeastern peak fares will rise by an average of eight per cent (the highest in the UK) and off-peak by six per cent. The operator has been given permission to increase fares by two per cent more than the national average to pay for the new high-speed commuter trains due to start running on the Channel Tunnel link at the end of next year - even though the vast majority of passengers will not use them.
Southern, which includes the Brighton line, will increase both peak and off-peak fares by six per cent. London Midland peak fares also rise by six per cent.
Stagecoach, which owns South West Trains and East Midlands Trains, saw its interim operating profits increase by 25.3 per cent to £31.7 million for the six months ending 31 October.
South West Trains, which operates local and long distance services into mainline Waterloo, will increase its rush-hour fares by six per cent and off-peak by 7.2 per cent. East Midlands Trains rise by six per cent peak and seven per cent off-peak. First Group, which operates First Great Western and First Capital Connect, recorded an interim six-month operating profit of £48.3 million up to 30 September.
First Great Western, which operates routes into Paddington, will increase peak time fares by six per cent and off-peak by 6.6 per cent.
First Capital Connect (Thameslink) peak fares rise by six per cent and off-peak by an average of nine per cent.
Mr Crow said: "It seems the rail privateers want everyone else to tighten their belts so that their shareholders can keep their snouts in the trough - yet the Government insists the set-up delivers value for money."
Gerry Doherty, leader of the TSSA transport union, said: "Everyone is cutting prices - everywhere you look there is a sale. The one big exception is the price of a ticket.
"It is nothing short of a scandal that the rail companies have government permission to levy these inflation busting increases."
Reader views (22)
What do you expect would happen when you have a monopoly, which is what the conservatives created by flogging the railways off to their city friends, who resold parts of it again (like the rolling stock), with no clawback for the Treasury. Billions of pounds of assets sold for knockdown prices to their friends. That's what the conservatives were good at.
These companies have passengers and the government over a barrel.A 'grilling' by MP's over fare rises.....they must be quaking in their boots!
- Mark, London, UK, 05/02/2009 17:09
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I travel from west brompton to east croydon monday to friday and purchase a monthly ticket which until december cost me GBP67.60, I bought new ticket for the month and it has gone up to 74.90, more than 11 per cent rise with the same train slow or delayed trains or even cancelled, not happy with it but what can I do, if it goes up another 11 per cent next year, wont be worth travelling to work anymore.
- Thierry Devant, london, 19/01/2009 17:18
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first capital connect has made record breaking profits every year since it won the franchise - it's over inflation fare increases are to enable payment to the treasurt and short term gain before it loses the franchise. do a search for 'first crapital connect' and just see what you uncaover in terms of passenger dissatisfaction.
- Pete Bennet, st albans, 06/01/2009 08:57
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There are references that suggest even Margaret Thatcher wasn't too keen on privatising the railways. It obviously was a terrible mistake to do so in that train companies must now concentrate over shareholders as well as passengers. Let's ease their burden. Labour should complete what they said they would do in the 90's and return train companies to public accountability, perhaps along the lines of Network Rail.
- Scot, Ely, 31/12/2008 09:29
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The solution is for TFL to bid for the franchises, as they did in Ousting Silverlink from what is now London Overground.
Ken was looking into getting TFL to bid for Southern's franchise when it went to renewal.
Boris doesn't believe in this..
- Bob, London, 31/12/2008 09:25
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I am extremely resentful about any increase in the cost of travelling to work, but even more incensed when I read that the increase is to fund the high-speed commuter trains which most of us will never use. Am also very angry at having my usual trains removed from service this week because Southeastern is running a reduced timetable, while still charging the commuter full fare. I have written to Southeastern to make a complaint, but fully expect them to fob me off with inadequate excuses rather than give a full and frank response.
- Wendy, Northfleet, Kent, 31/12/2008 03:57
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I wonder if any study has ever been done into the economics of making all train travel free ? At one blow you could remove ticket sellers, collectors,inspectors etc.
Place an "honesty" box at the exit from the platform and invite travellers to donate whatever they felt their trip had been worth. Could be trialled on the Underground.
- Kenneth Widmerpool, Bath, UK, 30/12/2008 20:59
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The problem of appalling railways in the UK goes back a long way; it is a consequence of our class system, commercial interests, and sheer ineptitude and short-term planning; since the 1960's it has been regarded as a second-class form of transport compared to mass car ownership, rather than the essential social rung in the ladder to keep the country mobile at a reasonable cost. Privatisation was the last straw and we now have overcrowded (insufficient investment) but ridiculously expensive railways, compared to the rest of Europe. Wasn't it Mrs Thatcher who said in words to the effect that she loathed train travel and never used them if possible?
- Jon Kent, Hertford. UK, 30/12/2008 15:34
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Greedy greedy greedy. As someone who uses south eastern I can honestly say the service is worse than ever. It may also be worth knowing that this week they have been operating an off peak saturday service but charging commuters the full peak rate on returns! South Eastern should be embarrassed by their antics!
- Jo, Kent, 30/12/2008 14:43
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It a bit late now complaining that you voted for John Major and the way he privatised the railways. Something that Thatcher and Hestletine looked at and decided it was not worth the trouble it would cause in the Tory Commuterland.
Of course Blair came to power talking of Re-Nationalisation but the cost would be prohibitive.
However, the failure of Railtrack lead to the state owned Network Rail and there is no reason why when contracts come up for renewel they cant be let as tenders like London Bus Routes are with fares fixed by either the government or in places like London TFL and the Mayor.
The fact is our railways are now back to levels of passengers last seen when they were nationalised but they need expanding, with more multiple track and new lines and re-opened old lines all this costs money is a question of who pays?
Personally I think a level playing field would see the Motorway network seperated from the DFT and made to pay its way using road tolls.
While Network Rail could even buy up sections of road to use as trackbed. The A12 near Chelmsford comes to mind where the railway could buy the Eastbound carraigeway and the existing railway would become the eastbound carraigeway instead.
- Melvyn Windebank, Canvey Island, Essex, 30/12/2008 14:23
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Scandalous! Let's see where profits will come from when we've all been made redundant and the only trip being made will be to sign on.
- Sharon, London, 30/12/2008 14:14
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The railway's should be owned by the people, they were established as acheap form of transport for the masses, not a gold mine for privateers.
- Ebin Donk, Angus Scotland, 30/12/2008 13:39
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Where is a government to take care of us??
- Jacqueline, Hampstead, London, 30/12/2008 12:47
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No sympathy with Bob Crow. His lot are greedy. However, he is totally right here. We are already subsidising rail, but unlike the rest of Europe we also have higher fares and a rubbish service - all due to these revolting rail fatcats. 11 years on, as predicted, privatisation (thanks to the Tories) is a complete insane mess and getting steadily worse. We need a new form of public ownership. How about a not-for-profit corporation controlled by the customers, the passengers, just like the old-style building societies?
- Robert C, London UK, 30/12/2008 12:34
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The rail firms probably need the extra money to cope with the exorbitant wage claims and overmanning demanded by the RMT.
- Tom, Watford (UK), 30/12/2008 11:58
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The train operators are probably the only industry like banks that is 'safe 'from recession due to government embarrassment. Both sides totally miscalculated their traffic projections for a downturn in the economy, hence the decision by SWT to shorten booking office hours in order for them to maintain high profitability. These train operating companies will do anything to maintain shareholder value against commuter/user comfort, expense and service.
Darren - Try getting a train out of Liverpool Central in the rush hour, this problem in our cities is nationwide.
- Paul B, London, 30/12/2008 11:41
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First Capital Connect never check tickets on commuter trains. Ever. But there are entry and exit gates in most stations. So you could (for example) buy a standard class ticket and travel first class, giving a more value-for-money journey. Travellers from Stevenage seem particularly keen on this opportunity.
- Srs, London, 30/12/2008 11:22
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I haven't noticed Mr Crowe suggesting that his members lower their wage claims.
- Lezl, London / UK, 30/12/2008 11:13
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Sounds like Bob Crow is trying to gain sympathy by backing the commuters for a change, that'll all change come summer and the RMT all go on strike again.
- Bob, Cheam, 30/12/2008 11:12
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Wow! But should anyone really be surprised by this. After all, the Fat Cats and senior Managers still have to have their Fat Greasy bonuses for Failure as well as success. (and of course their gold plated toilet seats)
- Uncle Vanya, Chelmsford UK, 30/12/2008 11:01
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The rail system should never have been privatized. It's become a total costly mess.
- Phil Jones, London UK, 30/12/2008 11:00
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Nationalise the network. It needs investment and better links. Why everything has to be all loaded in south east is a backward situation.
The trains are too expensive and need to be subsidised.
- Darren, london, 30/12/2008 10:30
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