Yesterday’s announcement of a rise in the inflation rate to 3.2% (RPI) and 2.6% (CPI) was a blow to the Bank’s promise of rapid falls to the 2% benchmark or below. It also puts another inflationary pressure into the system, as rail fares will go up by 3% more than the inflation rate in England. It means a further squeeze on spending power,as wages are still rising less fast than prices.
The failure of the railway to control its costs and promote its revenues by selling more tickets is costing both taxpayers and rail travellers dear. The government rightly says it expects the UK railway to get its costs down substantially to nearer comparable railway levels. The question is how and when will this happen? Why can’t the railway get on with it more quickly? Why does the current service pattern leave us so short of seats and capacity at times of day on routes where people want to travel, and so over provided with capacity on many other routes at other times of day? Why is the railway so unable to innovate, to use the tracks and trains more where and when needed?
I received an unsolicited email yesterday from the railways. They were urging me to undertake some more rail travel. In was told I could go to Brighton for £5, to Manchester for £12 and to Cardiff for £11.50 from London. A little research on their site found a train to Brighton at 10.36 am for just £7.50 single. The £12 tickets to Manchester entail leaving before 9am from London, exactly the times you would have thought the business travellers would be hogging. My own recollecitons of these longer distance services is of plenty of empty seats whenever I have gone by early morning trains. Clearly now the railway is dumping them at any kind of low price in an effort to boost seat occupancy.
The railways are a wasted opportunity in the UK. They take their long suffering commuters for granted, providing too few seats and a poor service for ever escalating cost. Meanwhile they are having trouble filling many of the other trains, and are now dumping capacity at uneconomic fares in default of selling tickets at better prices. They do not seem to optimise the use of the valuable routes they command into our major cities, and they fail to innovate to put on more capacity where needed. When you have such high fixed costs as they do you need to be smart in using the network to maximise the revenue take, without doing it by large fare rises. The Channel 4 “interview” of the industry rep last night was lamentable. He was asked no questions about why the cost base is so high, no questions about how he might cut costs or take a lower profit. Mr Snow saw it as a great opportunity to conspire to say taxpayers should be taxed a lot more to pay all the railway’s bills, whatever they may be.
It will be interesting to hear the Bank’s explanation of why inflation has picked up again, so soon after the Bank confidently predicted further falls. Air fares to Europe and fewer clothes discounts are said to be special factors, but there was considerable buoyancy in a whole range of prices and charges.
It is interestign to note that the winning bidders for the West coast mainline reckon there is unused capacity on the line, at a time when the case of HS2 says we lack capacity.
Subsidy per passanger mile by rail franchise 2011 (DTp figures, some e.g.s)
London Midland 17.8p
Trans Pennine 20.9p
SW Trains 2.4p
First Capital -0.9p