Rail fares


             There are four main ways to pay the growing bills for the railways. As so often in the UK political debate, most only discuss two of them. The public is invited to choose between all taxpayers having to pay more tax, the Labour way, so the railway gets an even larger public subsidy, or putting the fares up, the way approved by the Coalition government and the Rail regulator.

             If that is the only choice, then I reluctantly side with the government. The people who use the railway should pay a larger proportion of the costs of their chosen method of travel. Of course it is not the only choice, and the results of the last  years of Labour and Coalition living with Network Rail  has been to increase the costs to both taxpayers and rail users to unacceptably high levels. So what are the other two ways of solving the problem of the railway’s bills? How can we get a better deal for the hard pressed rail commuter without having to fleece him and her as taxpayers instead?

              The first is to sell more seats at sensible prices. The peak hour tickets are very expensive to try to put people off. Many of the off peak prices are very low, in a desperate bid to get more people to use the railways. I have no problem with  off peak bargains, but they do need to sell more of them. All too often when I travel on a train it is mainly empty, with maybe only 20% of the seats sold. The railways need to do more to find out what extra journeys people might like to make by train, and at what price. They could then arrange timetables that maximised use and revenue, with off peak trains at times and between places that attracted enough business. The railway seems to spend a fortune on hurtling empty first class carriages around the country for much of the day.

            The second is to cut costs.  Of course they need to spend money on ensuring safe travel, but most analyses of our railway shows it is considerably more expensive than railway systems elsewhere in Europe. The McNulty Report pointed to the need for large efficiency savings. The capital programme does need to bring more seats for busy routes, more efficient trains, and newer stations in some cases. But does it really require £960 million to improve just one provincial station, Reading? What could they have done for say £750 million there?

                I have at last received an answer to my recent letters to members of Network Rail. I will not publish it, as it does not of course answer the questions I posed. It is instead a simple eulogy of Network Rail of the kind you can easily read on their website and in their literature, telling me that the financing and efficiency levels of Network Rail are just fine. Therein lies the problem. There is not enough willingness to search for better and cheaper solutions, nor is there enough sales and marketing flair to fill enough seats.  That is why rail fares are going up. We await news from Mr Miliband about who he would tax to subsidise the railway more. Doubtless it will include the commuters whose case he says he wants to assist. The railways are just another travel business. They do not seem to run in the same businesslike manner that the unsubsidised public transport operators often manage.


  1. colliemum
    August 14, 2013

    Firstly, I am astonished that Network Rail did not answer your questions but brushed you off with a PR letter. After all, we expect that our MPs get answers where we ordinary people get none.
    Secondly, I am astonished that our various rail companies seem to be incapable of taking on board practices which are used by the most successful and best railway in Europe, that of Switzerland.
    Why is it that we either get a state-owned railway run along bureaucratic lines, where passengers are a nuisance, or private-owned one where passengers are treated as captive audience which can be pressed to pay and pay and pay?
    There must be something in the British mentality which makes us put up with such abuse without doing more than grumble in private.

    1. Lifelogic
      August 14, 2013

      I would have been astonished had they replied to the questions, they are simply a law unto themselves and out of democratic control. Just get rid of all the subsidy and differential taxes and let us see which types of transport consumers prefer given a level playing filed rather than a rigged one. Do the same for energy and everything else too. Let them choose which they find is most cost effective, flexible and suits their personal needs. They know the government does not know.

      1. uanime5
        August 14, 2013

        In other words lifelogic don’t care if other people are no longer able to travel throughout the UK as long as you can. Expect taxes to rise quite sharply if buses and trains go bankrupt without their subsidies as millions are no longer able to get to work.

        1. wab
          August 14, 2013

          This is a rather over-the-top reaction. Main city commuters are now largely paying for the cost of their journeys. The people who are not paying for their journeys are in rural areas, for example in Wales and Scotland.

          Why should the taxpayer have to subsidise someone’s rail trip? Such subsidies just encourage people to live further away from where they need to be (work and/or pleasure) than otherwise would be the case. And subsidies encourage the rail companies to be fat and lazy.

          People who live in rural areas do all they can to prevent anyone else living in those same areas and then turn around and expect urban / suburban people to continually subsidise the rural lifestyle.

          This does not happen just with rail. The government is now also bribing rural voters (who are mostly Tory or Lib Dem) by reducing fuel duty for them, which means that again urban / suburban voters are subsidising the rural lifestyle.

          (The excuse with fuel duty is that rural people have to use the car because they “have no choice”. But they do have a choice, not to live in a rural area in the first place.)

        2. Robert K
          August 15, 2013

          To what extent are buses subsidised?

          1. lifelogic
            August 15, 2013

            No VAT, preferential bus lanes and lots of local subsidies.

          2. lifelogic
            August 15, 2013

            the road space they use is largely paid for by car users.

          3. uanime5
            August 15, 2013

            In 2011/12 buses received £2.3 billion in subsidies. Though I’m not sure how much they will get this years as the Government made some changes in July.


          4. Mark
            August 15, 2013

            Local public transport gets around £3.6bn p.a. according to PESA data. That would include trams.

        3. lifelogic
          August 15, 2013

          Car and coaches are cheaper anyway than trains. So everyone can travel more cheaply and pay less tax too.

      2. A different Simon
        August 14, 2013

        Lifelogic ,

        What do you think would happen to the rental value of the property you let if local rail services and other public transport were closed down or the subsidy removed ?

        As a landlord you benefit from the location value that this sort of infrastructure provides yet you pay nothing towards it’s maintenance and repair or any sort of rental for it .

        If you own and let multiple properties which benefit from this infrastructure you are receiving a much greater subsidy than the people who travel on it .

        As a landlord you should be encouraging as much taxpayer funded expenditure and subsidised activity as possible to occur near your properties as you will be the one who collects the value they add !

        Be careful what you wish for !

        1. lifelogic
          August 15, 2013

          Well my properties are mainly central London so I think they would go up in value if commuter trains charged to cover their full costs.

          But anyway I am not saying what is best for me, I am saying what I think is best for the UK in general.

      3. Bazman
        August 14, 2013

        Take a look at mine and your comments in this post and stop writing the same propaganda.

      4. Credible
        August 14, 2013

        Why the attack Network Rail alone? The private train operators are taking your taxes to pay bonuses to board members, because they need to enrich themselves on the back of running monopolies at high cost to their customers who don’t have another option.

        – you say off-peak trains are empty and cheap. I’ve been on plenty that are full and expensive. At peak times many trains are full to the point of being dangerous because people are standing down aisles, except in first class where there are plenty of empty seats.
        How about another solution to stop “empty first class carriages hurtling around the country” – remove first class from peak times (or any time) and allow the whole train to be used by everyone.

        It is the rail operators that need to use “sales and marketing flair to fill enough seats” not Network Rail. Running a passenger train service is not the job of Network Rail.

        Reply Yes, some off peak trains are busy. I was querying the ones that are not.

    2. Hope
      August 14, 2013

      Because it is a mixture of both. The taxpayer still funds these allegedly private companies. A novel idea, make them private without any taxpayers’ help whatsoever or nationalise them. Look at the quangos who are are meant to improve service and value for money. Clearly not doing their job only adding to the taxpayers’ misery.

      Once more, look at the amount of money spent by the government on consultants. Why w as no minister held to account for the franchise fiasco? There should be consequences for incompetence, in politics there appears to be none. The EU project for HS2 needs to be scrapped now and the money spent to date written off, it will be a saving to us all. How can the public have any faith after so much waste and incompetence by the current and previous government. Anyone can follow we need leaders with good judgement and who make decisions- Cameron and Clegg need not apply.

      1. Leslie Singleton
        August 14, 2013

        My gut reaction is that HS2 hasn’t the proverbial pussy cat in Hell’s chance of making a profit and the fact that it is being built at such vast cost (that we don’t have) on the EU’s say-so makes me weep. How profitable is HS1 (if that’s what it’s called)? I hang my head in shame that I do not know, but I suspect the worst and if I am wrong and it is profitable I should bloody well hope so given that it leads to the Chunnel. Not sure I see how Birmingham can compete with the whole of continental Europe. And it cannot be repeated often enough that even for the hordes of people putatively desperate to get to Birmingham more quickly, only those who live in London or are willing to go in to London are going to take that particular train. Would the Victorians have built HS2 is the question for me and the answer for me is: can you be serious?

        Reply Of course HS2 will be loss making before subsidy.

        1. Leslie Singleton
          August 14, 2013

          Comment on Reply–That reads as if you support our taxes funding subsidies for such as this. A small, pump-priming, initial subsidy might be one thing but I suspect that it would be billions and forever. As to the answer to my question about HS1 I just read the following, viz

          “….the Channel Tunnel historically struggling to make money on a much bigger catchment area – the UK and continental Europe…”

          Given your “Of course”, I take it that HS1 has a (no doubt huge) subsidy but even so, as above, it is apparently unprofitable.

        2. William Long
          August 15, 2013

          If HS2 had a chance of being commercially viable, instead of being a project to enable politicians to beat their chests and claim they are doing something great, private funders would be queuing up to invest. The fact that taxpayers money has to be used says it all.

        3. Mark
          August 15, 2013

          Two thirds of the construction cost of HS1 has already been written off – some £4bn. To be break even against original cost it should make a profit of at least £300m p.a. – £100m to cover the extra depreciation written off, and £200m the interest on the financing written off.

        4. Leslie Singleton
          August 15, 2013

          2nd Comment on Reply (1st lost without trace?)–Having just read the ideas on alternative big infrastructure development (if such there indeed need to be), the one about HS2 being built down the East side of the Country over a new Bridge and presumably connecting to HS1, would seem excellent. Though I hate the EU, I, as we sceptics always say, of course by no means hate Europe, and I would have thought that everybody would see the obvious advantages of such a new line, which apart from all else would be long enough to make worthwhile not to mention actually achieving something. That is if we are talking Rail, but simply upgrading the A1 or even building a new Motorway alongside an Eastern HS2 would also be very sensible. The idea of there being a £100 billion need for a HS line between London and Birmingham just makes me laugh and that’s without considering relaying tracks on the old Grand Central in to Marylebone, which is already I understand on Continental height and width standards. Given, so we are often told, that we can work on the train these days what does it matter anyway if it takes half an hour or so longer?

        5. Leslie Singleton
          August 15, 2013

          Corrigendum–Have just been told by the barmaid at the Dog and Duck that (in one of my postscript replies to the above) I meant the Great, not “Grand”, Central Railway. Mea culpa.

        6. lifelogic
          August 15, 2013

          It will need huge subsidy and for nothing positive at all.

      2. uanime5
        August 14, 2013

        The purpose of quangos isn’t to make better decisions but to make decisions that ministers won’t be blamed for. Were ministers responsible for the decisions of quangos you’d soon find that they’d stop using them.

    3. The Shed
      August 14, 2013

      I’m not at all astonished by Network Rail’s response; though I’d confess to being mildly surprised that such a senior Parliamentary figure as our host just gets fobbed off like the rest of us. Not answering the questions raised is standard fare(!) these days.

      Ever tried raising a complaint to a ‘public’ body? If you have then you’ll be familiar with how their systems work: (1) acknowledge the fact of the complaint itself; (2) disregard its nature/subject matter; (3) answer a question which has not been asked in an attempt to close the matter down; (4) when in receipt of furtherance of the original complaint pointing out that it has not been addressed, go back to (2) & (3) etc ad infinitum. In others words, you are steered into a loop designed to send you round in circles until you give up.

      That’s not the primary objective, however, merely the means deployed to achieve it. No, the main aim is to avoid accountability at all costs. The “nothing-to-do-with-me, ‘guv” attitude now so prevalent. Of course, they are not alone: plenty of private sector behemoths use similar systems, but at least in those cases one can usually choose to go elsewhere for the goods or services required.

    4. oldtimer
      August 14, 2013

      I suggest you put the same questions to the Secretary of State responsible for railways, with the added comment that you wish him more success in getting an answer out of Network Rail than you have been able to achieve. The failure to reply is a scandal. No doubt you will follow it up.

  2. Gary
    August 14, 2013

    The railways are a disgrace. What we pay and what we get is surely the worst in the world?

    1. Jerry
      August 14, 2013

      @Gary: probably worse than during BR’s days, certainly worse than during the the pre WW2 period and the “Big Four” railway companies, the problem now -as it was during BR- is not who owns the railways but the fact that politicains and governments think they should be micro managing them.

  3. Mike Stallard
    August 14, 2013

    I love the railways. I really do. But they are now very limited in their usefulness.

    Where lots of things or people (power stations, factories, mines, large towns with lots of regular commuters and shoppers/revellers) are involved, they are very useful. Bangkok, London, Singapore, Perth West Australia, for instance.
    Out here in the country, they are pretty well useless. The nearest station to me is several miles away. The costs are astronomical. When you get to the run down, half closed station it is most unpleasant and very boring. Me, I just jump in the car.
    But for going up to London/Cambridge, they are useful! Overcrowded, very expensive, and lots of them.

    Of course you can cut costs – but that is not the spirit of the age, really, is it.
    Of course you can fiddle a bit more with bargains which are already very complicated.
    In my own opinion, however, you are flogging a very out of date method of transport – except in special cases.

    (PS What has the EU Directorate got to do with all this with their integrated travel plans!)

  4. margaret brandreth-j
    August 14, 2013

    Network rail seem to have taken a leaf out of politicians’ book then? Eulogising instead of answering the question is very prevalent in the house.
    Rail travel is something I don’t use often, however to get down to London from Manchester for early am , costs me more , by car parking or taxis to the station and then the return journey , than going by car to a motel overnight and traveling from Milton Keyes to Euston. This should not be. The times when I do occasionally have a day off and would like to see the attractions of our cities , I find the tickets are similarly too expensive, but I must say those times I have used this travel seats have always been full.
    If there are times when only 20% of the seats are used , then perhaps those train times should be streamlined by the rail companies for greater efficiency .

    1. Hope
      August 14, 2013

      Buffet’s railway made a huge profit in the US last year. Why can’t this be achieved here?

  5. Peter van Leeuwen
    August 14, 2013

    In the Netherlands, parliament and government, together with passenger associations, lean heavily on the railway sector to stop service deterioration (due to acknowledged past over-privatization). Improvement of the railways is such a longterm process that you might be best served with a vision and approach that can have cross-party support even though that may be complicated.

    Reply The UK achieved a big improvement in service quality and use of railway following privatisation, something Mr Prescott accepted when in office.

    1. Jerry
      August 14, 2013

      @JR reply: That is simply wrong, people are being forced onto the railways from the roads due to anti car policies and high taxation, there has been no improvement in service quality over BR, in fact they have got worse, poor on train catering etc., poor on train safety due to an increase in single manning, restriction s on what trains one can use – and woe betide anyone who buys a ticket but then mistakenly gets on to the wrong TOC service even though the train is going to the same place or along the same route.

    2. Mark
      August 14, 2013

      When I first visited the Netherlands in the 1970s, Nederlandse Spoorwegen was an efficient, well integrated system that knocked BR with its frequent strikes into a cocked hat. What seems to have changed in Holland is that the unions have become more militant and the rail service unreliable while in the UK we now only have rail strikes very rarely, and the Dutch politicians have insisted on investment in loss making rail big projects such as Fyra (the high speed train), and the Betuweroute dedicated freight line.

      Fyra is in deep trouble, as it is forced to abandon high speed operation and will now use locomotives that are slower (160kph or 100mph) than the Mallard steam locomotive of 1936 (126mph), as the Belgians refuse to subsidise it.



      We would of course do well to take note before wasting more money on our own similar vanity projects.

  6. Acorn
    August 14, 2013

    Operating revenue on local bus services in Great Britain has increased by 13 per cent in real terms from 2004/05, but fell by 1 per cent between 2010/11 and 2011/12, with similar trends for England. Revenue per passenger journey has remained broadly steady since 2004/05, and was 120 pence per journey for Great Britain in 2011/12 and 116 pence per journey for England.

    For England in 2011/12, an estimated 55 per cent of operators’revenue came from passenger fare receipts, with the remainder from public transport support, concessionary travel and Bus Service Operators Grant (BSOG). Operating costs for local bus services in Great Britain (outside London) have increased by 16 per cent in real terms since 2004/05; the cost per vehicle mile has increased by 20 per cent over the same period (from 239 pence to 286 pence). The trends for England (outside London) are similar, with a 17 per cent real terms increase in operating cost per mile between 2004/05 and 2011/12.

    Government support. Total net public funding support for local bus services in England was £2.3 billion in 2011/12, a decrease of 5 per cent in real terms from 2010/11. This was largely due to a 10 per cent decrease in public transport support.

    Just in case you thought a Bus was a “business like manner that the unsubsidised public transport operators often manage”. (DFT data).

    Reply No I did not have subsidised bus services in my mind.

  7. alan jutson
    August 14, 2013

    Do not forget that the present system hits commuters twice.

    A fare rise, and a taxpayer subsidy through taxation.

    Certainly agree with the special offer principle.

    At present one of the best locally is £40 group return for 4 people, from Wokingham to Gatwick, which always seems to be busy.
    Thus we never bother to use the car when flying from Gatwick, which is because of the train our preferred choice of Airport.

    Since I am a rare train traveller, I am not aware as to any special away day, 7 day special offers being published.
    I guess there are some on the web somewhere, but with different franchises operating in different areas, I guess it could be very complex, and perhaps that is the nub of the problem.

    The idea of train travel is surely not to have to book many days. weeks, months in advance, but to simply turn up on the day and go to the destinaion of your choice at reasonable cost, in reasonable comfort and safety, and not to be robbed in the process.

    Perhaps the problem is:
    Too many different fares, with too many differing time restrictions, having to be booked too far in advance.

    1. Jerry
      August 15, 2013

      @alan jutson: Indeed, what some people forget is that the best deals on train tickets are ONLY available when booking well in advance (and often online, by card, meaning that whole swaths of the population are instantly disenfranchised), thus the headlines used but those suggesting that rail passengers have never had it so good are some what at odds with the average passengers experience, most people do not book/use trains like their do airline tickets – a great proportion of people still turn up and pay/travel on the day and are being stung for it by the TOCs for no good reason and the rail regulator/government are allowing it.

    2. lifelogic
      August 16, 2013

      Indeed absurd fare and ticket validity & complexity deters using the train, unless you have hours free to work it all out.

  8. Mike Wilson
    August 14, 2013

    As something of an aside, a young friend of my son’s works near Heathrow but lives in Reading. He is actively looking for a job within a few miles of his home to save himself over £200 a month on petrol costs. He wants to buy his first property and needs that £200 to go towards a mortgage.

    He is the second person I have spoken to in the last few weeks who has expressed the same sentiment.

    So, okay, keep putting transport costs up. But be prepared for London, for example, to find it extremely difficult to find people prepared and able to commute.

    1. A different Simon
      August 14, 2013

      So putting frequent users fares up would increase travel costs for lower earners who are already stretched so they couldn’t afford to work and would be better off on the dole .

      Interesting to speculate what causal relationship there is between rail usage and economic activity . If we reduce the former we may well find it costs us more than the current subsidy ; in which case there might even be a good business case for subsidising it more ?

      If so , should it only be taxpayers that subsidise it or should businesses be subsidising it too ?

      If a proper location value tax was brought in businesses , businesses/ individuals in London which/who benefit from the custom/appreciating prices which infrastructure projects like rail bring/underpin would contribute directly to their enhancement and maintenance .

      Seems like the differential between season ticket prices and one off fares will have to increase .

      It’s not unreasonable for people who only use trains 1-10 time a year to have to pay a higher price to maintain the infrastructure for when they decide to use it .

      Just cos they don’t use trains now doesn’t mean they won’t have to use them in the future . Many of us have medical conditions which may one day result in loss of driving entitlement .

    2. Robert K
      August 15, 2013

      Just to note, there is no direct rail service from Reading to Heathrow. Ludicrous.

  9. David Hope
    August 14, 2013

    There is a real problem in London now as prices in the capital are too high for people in low to middle income jobs. At the same time, trains coming in and out are too expensive. There is only one outcome which is numerous people crammed into homes – say 6 workers to a 2 or 3 bedroom home. Plenty of evidence shows this is happening all over. It can only get worse as things stand.

    I cannot believe the prices of the railways now, it is unbelievable and yet at the same time not at all surprising for a monopoly. There are no new tracks and no new stations. So how on earth can costs be so high.

    Your point about 960m on Reading perhaps gives the answer though. Is this figure for real? Surely not.

    My personal experience is a little different in terms of trains being crowded. Where do you typically travel. My experience on East Coast, transpennine express, northern and southern rail is that trains are typically very busy. Trains into leeds have london have people packed like sardines. In any other business new supply would be provided to meet demand.

    Reply £960 m was the figure quoted by the Transport Secretary in the Commons. I had previously heard £860m.

    1. Jerry
      August 15, 2013

      @David Hope: “Trains into leeds have london have people packed like sardines. In any other business new supply would be provided to meet demand.

      In the bad old days of BR (and I don’t mean the cash strapped 1970s and ’80s) extra trains would have been run or extra carriages put on the train, this was done because the railways were run as a public service and not to make money for faceless investors – yes it cost the “taxpayer” but as the majority benefited (and we lived in less selfish “me and my own” times) few complained beyond the road lobby.

      Extra trains and extra capacity can’t be provided these days as there is not the spare stock as no TOC wants to have expensive rolling stock sitting in sidings just in case it is needed, and even if there is spare ‘trains’ available it is not easy to schedule such trains into the timetable because there is no one person who can make the decision.

      Reply On crowded lines into London at peaks the main constraint is lack of train pathways. The old fashioned trains we use require large time and distance gaps between them, preventing traincos from running sufficient.If we had lighter trains with better brakes abd better signals we could perhaps run 45 trains an hour instead of under 30 at present.

      1. Jerry
        August 15, 2013

        @JR reply: The easiest way of creating more train paths is to reduce the line speed, the faster the train travels the bigger headways (space between signals, or more accurately the “Block”), and as for better brakes, well perhaps – if you strap people in like on aircraft’s and stop them from walking about etc, even at current average speeds an emergency stop can cause significant injury to anyone unlucky enough to loose their balance or grip…

      2. stred
        August 15, 2013

        On long distance journeys trains could link up, using automatic coupling, and travel in tandem outside the station after leaving from different platforms. They could, for example, travel together from London to Birmingham then, before arriving, decouple and go to different destinations and platforms. This might solve the capacity problem and be far less expensive than building new lines.

        1. Jerry
          August 16, 2013

          @stred: That was tried a hundred years ago, even if modern technology could perfect a much better coupling method (on what is already used today) to allow for the “slip” the same operational/safety issues remain, plus there would be few real savings as each train would require their own crew and -unless one was to stop the use of connecting gangways between trains , thus not have any doors that would need locking- it is quite possible that driver only and perhaps even driver and guard staffing levels would need to be increased.

          Also longer trains need longer signalling gaps, so coupling two 12 coach trains together will not provide any significant increase in train paths as there will actually be less capacity, certainly if train speeds are also increased.

          Better to simply run two trains, or run one train and split them whilst in the platform, lengthening platforms were possible.

          1. stred
            August 17, 2013

            The distance between trains must be far longer than the length of a doubled linked train, so your second point cannot be correct. As regards staffing, of course the two trains would need two drivers in order to split and go to two destinations, but they would need them anyway, so costs would be the same. I was envisaging a modern linking system, even with interconnection to perhaps a dining car between the two. Just because it was not a success 100 years ago does not mean that it could not work on the far more congested track today.

  10. JoolsB
    August 14, 2013

    Yet again, it is only one part of this so called United Kingdom feeling the pain on rail fares – ENGLAND just as it is only ENGLAND which is bearing the brunt of the UK Government’s austerity measures just as it is only ENGLAND’s young who are facing crippling £9,000 tuition fees just as it is only ENGLAND’s sick who have to pay for their prescriptions just as it is only ENGLAND,s elderly who still face having to hand over their their hard earned savings and homes should they need care and just as it is only ENGLAND’s elderly who the new £75,000 cap plus the rest will apply to in future. And all this from a Conservative party who only exist thanks to ENGLAND – what a thank you!

    Come on John, when are you or any of your English constituency colleagues going to do your jobs and say ENOUGH IS ENOUGH?

  11. Douglas Carter
    August 14, 2013

    I’ve waved goodbye to the railways in the past ten years due to my personally-observed conclusion that the Rail companies do not want me to travel with them. So I submit a posting here with that already in mind.

    Part of the problem results from the pretty shoddy mechanism by which the railways were privatised originally nearly twenty years ago, but they carried with them an already-established institutionalised contempt for the travelling public already well-entrenched from the BR days. I find it extremely difficult to look back fondly on BR, but in the same manner, by no means did I find the privatised replacement a superior phenomenon in terms of value for money or service.

    In terms, we never really had privatisation. We had a patchwork halfway house in which the traditional path-of-least-resistance (charging more to the passenger) became the established – almost sole – solution. There is yet extremely limited mandatory scope for the Rail Companies as they are to strive for excellence and a service level and price the respective customers would wish to reward.

    The ‘Competition’ element, as is critical for the free marketeer, is established solely in a contrived, highly-displaced form in the UK. To the traveller at the ticket booth, they see little more than a monopoly holding them in contempt. Nobody in their right minds would travel by rail simply to annoy dogmatic anti-train interests (which seem to exist around the bazaars…), there does exist a very large part of the populace who have a very genuine need to travel via this method. A captive audience you may say. Continued and never-reversing fare rises for the same contemptuous service simply rubs salt into these ever-festering wounds.

    With the privatisation as it was formulated, with the established Rail companies the heirs to the institutionalised ignorance of British Rail, I see no genuine chance for a network that actually deserves the long-suffering customers they have already.

    Reply The present railway is nationalised to provide and run the tracks and signals, and has monopoly franchise holders in each region running trains under contract control from the government. This is scarcely a privatised railway.

    1. Jerry
      August 15, 2013

      @JR reply: “This is scarcely a privatised railway.

      Then there will be no problems in bring back BR… 🙂

  12. A different Simon
    August 14, 2013

    Every homeowner , without exception , in a railway town like Wokingham or hub like London uses the railway every day .

    They might not use it explicitly like traveler’s but they do use it implicitly .

    Close down the the railway station and house prices in Wokingham would plummet and some businesses would close .

    The railway is one of the many infrastructure projects which underpin house prices in places like Wokingham and add a premium to land prices .

    A proper location value tax (essentially not a tax but a fee for “exclusive use of the commons”) would capture some of the value provided by communal projects and infrastructure for the common good .

    All other things being equal a location in a town with a railway would attract a higher LVT than the same town would without a railway .

    LVT would also act as a disincentive towards runaway property price rises and because it would allow other taxes such as employment taxes to be reduced should help maintain accommodation affordability .

    It would ensure that people who benefit implicitly from things like railways pay their “fare” share for the maintenance of such facilities too .

    1. A different Simon
      August 14, 2013

      A landlord renting a flat near the station is using the railway just as surely as someone who travels on it . They both derive value from it .

      The railway needs to be maintained .

      Why should travelers have to pay for this maintenance and the landlord have to contribute nothing ?

      Why should travelers subsidise landlords of properties in railway towns ?

      1. A different Simon
        August 14, 2013

        Correction : a landlord LETTING a flat .

        1. Edward2
          August 14, 2013

          I realise from your many posts on the subject that you have a bit of an obsession with “wicked” buy to let landlords ADS and you would like them to be driven out of business, but I think this is taking things a bit too far!
          How far away from a Station would your idea of perhaps taxing the landlord for having a railway station near to a particular property apply?
          How would we know the tenants in said property are using the station and if so for what purpose and how often?
          How would you value the benefit from having a station nearby?
          Too close and it could be a nuisance and devalue the property.
          You say Landlords contribute nothing, but Landlords do pay something in that like all of us they pay taxes and the State provides various local facilities.
          What about us motorists who pay far more in vehicle excise duty than is ever spent on the roads?

          1. A different Simon
            August 15, 2013

            Edward2 ,

            Whether tenants or owner occupiers use the station is irrelevant as the fee for exclusive use of the land is based on location .

            A location value tax would apply to everyone who had land , whether it was developed , undeveloped , owner occupied or rented .

            The amount of rent a landlord is able to charge is partly a function of the rental value of the location so part of the tax he or she pays is too .

            A landlord will end up paying a greater amount of tax on a location than an owner occupier would .

            Now that we have democratised home ownership by credit the rent from the land mainly accrues to banks in the form of mortgage interest .

            Take a look at Winston Churchill’s writing on location value tax . He explains it much better than I can and it’s a good read .

            Land taxes should be less damaging than employment taxes . Income tax is the wrong tool for the job .

            Hong Kong and Singapore raise a high proportion of their tax take from property taxes and a much lower proportion from employment and industry . They seem to be doing OK .

            With regards to motorists I would zero-rate road tax , retain fuel duty and ideally reduce it .

            With a proper location value tax there should be less need to stiff the motorist to make up shortfalls in general taxation . I’m not saying LVT would cure all ills just that I people should look beyond the taxes we have today .

            Far too much tax which could be hypothecated ends up in the coffers of general taxation . Civil servants love general taxation and reduced accountability .

            I’d like to see national insurance retained but removed from general taxation and become a hypothecated tax with a proportion hypothecated towards partially funded state pensions administrated by a public body independent from the Govt of the day .

          2. Edward2
            August 16, 2013

            I fear your land tax would be passed on to the tenant on the form of higher rent and in the form of higher house prices for purchasers.

      2. alan jutson
        August 14, 2013


        Whilst I take the point you make, the landlord in your example would have paid more for the flat in the first place, as would have the owners in all of the surrounding houses if what you suggest is true.

        Thus by the higher purchase price of such properties alone, the Government would have collected increased Stamp Duty on every property purchase.

        On another issue.

        One would have thought that with a very high population, and with a railway system which covers a smaller area than most other National railway organisations.
        We should have a greater passenger capacity/usage per mile than many others.
        Thus our railways should surely be cheaper and more efficient to operate than those who carry less passengers per mile.

        If not, why not.

        1. A different Simon
          August 15, 2013

          Hi Alan ,

          My example of a landlord was unfortunate because a landlord inevitably will pay a higher proportion of the rental value of the land to the communal coffers than an owner occupier would .

          I am opposed to stamp duty as there is no need for a transaction tax to deter high frequency trading of land and houses . It’s just a tax the Govt levies “because it can” .

          Time of sale is the wrong time to try and collect the location value for society too .

          As you say , a buyer pays dearly for a house in a prime location – be that in walking distance to a station , town centre , a local A&E unit or increasingly within the catchment area of good state schools , far away from a ghetto , in a nice town or just a popular region .

          I’m saying that the location value has largely been created by society so should accrue to society as a whole . A civilised s0ciety can’t be run on fumes .

          The key point is who collects the location value if society does not collect it .

          What has happened in practice now , since home ownership has been democratised by credit , is that the rental value of the location has been puffed up and is captured by mortgage lenders .

          This leaves a gaping hole in personal and national finances .

          They even lobbied to make vocational pensions unviable so that money could be used to puff up location value .

          If the location value is captured by society in the form of a an annual charge it will not be available to pay to the banks in mortgage interest where it will stop circulating and doing good .

          A location value tax could even help stabilise house prices .

          Employment taxes are so unimaginative and designed to keep people in their place .

          Beyond a point they are the wrong tool for the job yet nobody seems to question this .

          I’m saying that some taxation should be moved from employment onto monopolies , land being the main one .

          We already tax monopolies like extraction of mineral rights and transmission wave bands , there is benefit in extending the principal to surface rights .

          You may be right that our rail is costing more than it should .
          High frequency of trains and the complexity of the network around London creates it’s own problems .

          One thing to learn from the last depression is not to cut back on maintenance – or when the recovery comes everything falls apart . The Govt should be encouraging infrastructure spending – it also creates jobs – and a job makes such a difference to a whole family .

          1. A different Simon
            August 15, 2013

            Alan ,

            Correction : The Government should be encouraging Infrastructure MAINTENANCE .

    2. Mike Wilson
      August 15, 2013

      I’m not sure a few hundred people getting on trains every morning, or not, would have that much affect on house prices.

      What about the A329M? And the M4? I’d say they are far more significant in making Wokingham a desirable place to live.

      1. A different Simon
        August 15, 2013

        Mike ,

        Whether it’s the station or the roads , the point is that house prices and rental values are created largely by current and historic taxpayer spending on infrastructure and it’s maintenance .

        Without that infrastructure rental values and house prices would plummet .

        Because the money comes from centralised taxes rather than local taxes , landlords in areas well served by infrastructure are benefiting from the taxpayer completely out of proportion to the amount they contribute to maintenance of the infrastructure .

        It hasn’t always been this way .

        Income tax was brought in as a temporary measure to fund the Napoleonic wars and the landed gentry decided that by keeping it they could reduce the taxes they paid on land .

        The country could do a lot better if the people in power agreed to start taxing monopoly positions rather than by massively over-using income tax .

        Look at Hong Kong and Singapore to see the advantages decentralising taxation and shifting the taxation from employment to monopolies such as land .

        Failure to collect a reasonable amount of the rental value of the land for the common good is the main reason why employment taxes have to be so high .

        People arguing about whether income tax should be 40% , 45% or 50% are missing the point .

        Income tax is the wrong tool for the job .

  13. Neil Craig
    August 14, 2013

    One way to phrase the question of who Miliband would tax more is to say that each £1 billion is 0.3p on income tax. Thus if the extras he intends to spend come to, say, £10 billion, this means “Labour are committed to raising income tax by 3p or equivalent. If not that income tax rise he must know what other tax he intends to raise so please tell us”. If he doesn’t the conclusion that it is 3p on income tax can be drawn. So also can the conclusion that he hasn’t got a clue what he could do in power. According to preference.

  14. Atlas
    August 14, 2013

    I read that pensioners eligble for a bus-pass in London can also use the local Railways and the Underground in the same manner. Is this true? If so, I wish it could be extended country-wide as this would reduce the necessity of many driving by car to the nearest large town when they actually have rail connection, but only an infrequent and limited bus service. So doing would do something to reduce the congestion on the roads to the benefit of those who really have no choice but to have to use them.

    1. Leslie Singleton
      August 14, 2013

      Last time I was dragged screaming in to London it was to meet a friend of 50 years for lunch in the City. He is a millionaire living in Mayfair (could be Belgravia) and thought it vastly amusing that he had used his Bus Pass. Bonkers, absolutely bonkers. BTW, No I did not take the train, even in the middle of the day.

  15. Woodsy42
    August 14, 2013

    I suspect the problem with the railways is the same problem that afflicts all government, council and agency costs. Somehow all these bodies manage to make a minor job of improvement or a small job of work into a huge multi-million pound “investment”.
    The amount these people end up paying – £10,000 for some simple road humps was one press example yesterday – is totally out of proportion to what a normal person would consider sensible and what a job should cost. They have lost all sense of reality and proportion.

  16. lojolondon
    August 14, 2013

    You are dead right here John. With our protected interests, EU laws and old ways of doing things, unfortunately UK railways are the most expensive and the worst performing in the world. A very sad state of affairs, we need someone who doesn’t care about the status-quo to completely sort this out.

  17. Mark
    August 14, 2013

    A large part of the problem with rail fares is the need to defray the capital and employment costs associated with meeting peak rush hour demand. Largely empty services are an alternative to massive marshalling yards for “storing” trains in between rush hour peaks – but even with these you would still need the same peak capacity in terms of trainsets and drivers and rail paths and signalling.

    There is little likelihood that capacity utilisation, and thus average cost, can be evened out much further through fare yield management. Commuters are a captive market, forced by their employment to travel at set times. The real consequences of this are not felt directly by employers. If employers had to pay the premium for peak travel over off-peak they would have an incentive to consider flexitime working, and even relocation, home working and establishing offices away from city centres. This would be further aided by having a proper FTTP communications network that could be paid for with just a single year’s rail subsidy.

    Vehicle technology will also start to impose a greater competitive threat to rail in the not too distant future. The ability to handle more traffic density with automation will alter rush hour journey times for cars.

  18. Vanessa
    August 14, 2013

    JR – I am surprised you do not mention the EU in your piece. I understand that the railways were privatised because the EU runs our transport. The EU is also responsible for our train timetables. We, in England, used to have Winter and Summer timetables but that did not suit the EU and so they now run the timetables to suit their train system.

    No wonder Network Rail did not answer your question, you are not responsible for running the railways any longer. Have a look at the EU website and you will see its plans for the regions of Britain (part of the EU) regarding rail.

    Reply I was on the Cabinet Committee that worked out the scheme to privatise BR – I backed a minority report which was unsuccessful.At no point did we consider EU requirements or regard ourselves as under an EU obligation to privatise.

  19. Kenneth R Moore
    August 14, 2013

    Yo Redwood!,

    £960,000000 for a station upgrade. The great train robbers got 40 years for confiscating considerably less money.
    Railtrack is run primarily for the benefit of (the producers ed). Why aren’t the directors being hauled before a commons select committee instead of being rubber stamped by the transport secretary who should know better ?

    Reply Building a new station is not comparable with a train robbery. As someone who welcomes improved and bigger stations, I was merely asking what we could have got for a lesser sum as it did seem a lot of cash.

    1. Mike Wilson
      August 15, 2013

      Yes, I heard that figure a few years ago – 850 million I think it was, at the time.

      How on earth have infrastructure projects become so LUDICROUSLY expensive.

      Now, getting on for a BILLION pounds to upgrade a railway station? When I was in the construction industry in the 1980s you could build a massive building – Williams and Glynn’s Head Office in Islington, for example, for £32 million. Now we spend a billion quid upgrading a railway station. Someone, somewhere, is having a laugh at OUR expense.

      1. alan jutson
        August 15, 2013


        I think the problem (and part of the reason for the high cost) has been in keeping the Station open for normal business during the couple of years that redevelopment is taking place.
        By neccessity this means that you can never do things in the most efficient manner or logical order.

        Our Daughter uses Reading Station every day to go to work, and whilst she has often said that there have been late notification of platform changes, the trains have continued to run almost to timetable.

        No, I am not suggesting that £960 million is justified, but certainly if you were building a new Station, in a new location, it would probably be completed in half the time and at a quarter of the cost.

        Do also remember that Reading Station is reported as being one of the more busy Stations outside of London, and even more platforms and tracks have been put down..

  20. English Pensioner
    August 14, 2013

    If the railway industry need the present level of subsidy and huge fare increases to run the present railways, how much can we expect that they will demand to run, and for people to travel on, HS2?

  21. Chris Rose
    August 14, 2013

    We should do more to encourage open access competition on the main lines. On the East Coast Main Line, two non-subsidised open access operators, Grand Central Trains and First Hull Trains, have been permitted to operate in competition with East Coast, the nationalised company which holds the franchise. This has led to lower fares and more passenger journeys on the line. I quote from the Centre for Policy Studies website:

    “The Centre for Policy Studies publication in March showed that passenger journeys increased by 42% at stations that enjoy rail competition, compared with 27% at those without it; that revenue increased by 57% at those with competition, against 48% at those without it; and that average fares increased by only 11% at stations with competition, compared with 17% at stations without it.”

    1. Iain Gill
      August 14, 2013

      Rather ironically Grand Central Trains are owned by the German state owned railway company. On the East Coast line there is a competition between the British state owned company (East Coast) and the German state owned company (Grand Central). You couldn’t make this up.

  22. forthurst
    August 14, 2013

    I see that Deutche Bahn has also been selling bonds in foreign currencies and then swapping back into Euros.


    Looking at other financial pages, it does seem to have a more logical management and operational structure than Network Rail; of course it operates trains as well. The financial summaries also look more healthy in terms of capital investment and current operational performance despite owning assets abroad including English DB Schenker Rail (UK) Ltd.

  23. uanime5
    August 14, 2013

    I suspect that off peak tickets are cheaper because everyone has to get to work and school at much the same time, so everyone wants to travel at the same time. Thus unless employers offer very flexible hours it’s unlikely that off peak trains will have more people in them.

    I’m unsure what people would need to regularly use the trains other than those going to work or school. The unemployed are unlikely to be able to afford to travel anywhere and groups going to the cinema are likely to be sporadic.

    Subsiding the fares to reduce their cost will make it more affordable for people to travel by rail, which may result in more people using it. However the majority any increase in passengers will probably still be travelling at peak time.

    Reply Of course peaks are more popular. The issue is how many trains you run not at peaks and how you sell the space on them. You do not have to trundle largely empty trains around the countryside ou5tside peaks.

    1. alan jutson
      August 14, 2013

      Reply -reply

      I am sure many pensioner groups would welcome a day out on the train if it was cheap enough.

      Many places to visit.

      With National Trust Membership (if they can afford it) and bus passes, these groups of people could help fill up some trains.

      Trips to the coast, bus rides along the prom (bus passes again) etc etc.

      All far more interesting than sitting in front of the TV .

      Aware not all pensioners could afford it, but many perhaps could and would even if it was only once or twice a year.

      The other problem the railways have is the security, cost and lack of parking space available at stations.

    2. Jerry
      August 15, 2013

      JR reply: John, unless one is selling one-way tickets people need to return, hence around here trains are often empty going up to London but full on their return, and what if you fill these off peak services, if we already have full trains in the other direction how are these extra passengers go8ing to get back, unless extra trains are provided – could it be that is is cheaper to run near empty trains that have expensive trains sitting in sidings for much of the day earning no income (one of the criticisms that BR had in the 1980s).

      Reply Most lines have an outbound peak and an inboundpeak each day so I do not agree with your problem.

      1. Jerry
        August 15, 2013

        @JR reply: I can only assume that you didn’t actually bother to read what you replied to, it makes even less sense is you did read my comment! 🙁

  24. margaret brandreth-j
    August 14, 2013

    I loved those trains with separate cubicles which seated 6-8 and a corridor running outside. Travel was fun and it wasn’t quite as scary as the cubicles without a corridor. This is what is missing: travel for fun, food and drink served within a spacious cubicle ,( not first class) good clean loos, a bar, TV’s and radio’s , gadgets to track the journey, children and disabled friendly carriages. sponsoring by say, people selling art pieces or other. Fantasy rides from place to place for children going back to the future.Instead what have we got now ? utility orientated sardine cans!

  25. Daedalus
    August 14, 2013

    I quite simply cannot believe it cost almost £1 Billion to do up Reading station. Is it fully gilded and encrusted with precious jewels?

    This is absolute madness, if we as a country have to spend that amount on a station we are really well and truly up the river without a paddle.

    Maybe we should get the Chinese to quote and see what it can really be done for!!


  26. Martin
    August 14, 2013

    Given your remarks about London and cities the other day I find your tone today rather odd.

    London depends very heavily on rail commuters. Close the railways and I doubt if Boris’s rich supporters who can afford to live in Zone 1 would be happy at thousands of multi-storey car parks being built so folk could drive in.

    Eventually there comes a point when rail commuters will say this is pointless. Why pay even more thousands in annual seasons and commute for hours when eventually a minimum wage job in the local town becomes more worthwhile adding to unemployment and welfare costs as somebody else gets displaced from a job.

    As for costs well you (MPs) could scrap the conservation laws. I get annoyed when I see useless Victorian buildings being kept that should have been flattened years ago.

    The culture of outsourcing by network rail is also not clever. (I’ll refrain from my customary moan about out sourcing in general available for the price of a few pints….)

    Reply I am on the side of the rail commuters and agree rail is an important contributor to peak travel into and out of major cities. I was talking about off peak travel, and rail costs.

  27. Martin
    August 14, 2013

    I spend £10 a day on fuel to get to work – of this the government takes around £6 in fuel tax.

    By subsidising the railways, every rail commuter gets a government handout to reduce the ticket price that they would otherwise pay.

    Is it fair that I have to pay the government for the privilege of going to work while others receive a subsidy ?

  28. mart
    August 14, 2013

    Dear John, I would like to respond to two of your points:

    1. Trains are often empty. Yes, though this does not concern me much, on the basis that the presence of spare capacity on a train must surely be of little incremental cost compared with the overall cost of running the train in the first place.

    But more important, in my view, is, sometimes at peak times they are *too full*, which leads to great indignity for the travelling public (standing room only, families unable to get a seat for children, etc.).

    I humbly offer the suggestion that we develop (if they do not already exist) trains to which it is simple to add one, two, three more carriages at peak times.

    Then, by all means, remove these extra carriages at off-peak times, if you believe it’ll save costs.

    2. On ticket prices. Ticket prices are much too high, in absolute terms. This makes train travel a non-starter for (say) a family of four, when compared to car travel. The same goes for bus travel too, actually, but that’s another subject.

    Whatever our continental neighbours are doing right, we should copy it. I do not think this is a complicated subject, though. I also do not think sales and marketing is needed to sell train tickets. You do, however, need to make the tickets affordable, and provide enough capacity at busy times.

    Reply On crowded services the reason they do not add extra carriages is often platform length. Of course it costs extra to pull so many empty carriages around for the rest of the day, especially on the fuel bill. One of my queries is whether they run the wrong trains off peak, increasing the number of empty seats

    1. mart
      August 16, 2013

      Dear John,

      Platform length might be an issue, but not if you are running only 2 carriages, where you ought to be running 4 or more. I already conceded implicitly that it would cost more to pull more carriages, but I don’t expect the incremental cost is of much significance compared to all the other costs of running the train and the railway it is running on. Anyway, from your reply we possibly to have common ground that the best solution would be to be able to change train lengths to fit the circumstances.

      By the way, it is not always as simple as peak/off-peak. I have a personal experience of not being able to get on a train just before lunch on a Saturday (not a noted peak time, as far as I was aware), because it was too full to enable me to get on. It was only running 2 carriages, so platform length was not a consideration.

      Reply On the lines serving my area we are short of peak capacity and the trains are already full platform length.The main constraint is lack of train slots at prime times.

  29. Robert K
    August 15, 2013

    A return bus fare from Oxford to London is £17. The return train fair is £54.
    Why is the bus fare a third of the price?

    Reply Because it is a more efficiently run operation.

    1. lifelogic
      August 16, 2013

      Because buses are better run and do not need their own track. Inherently more efficient in cost terms.

    2. margaret brandreth-j
      August 17, 2013

      Efficiency is not the total solution…do we remember that good old term creative management?

  30. Richard
    August 15, 2013

    The business model for rail privatisation is completely wrong because there is no element of competition.

    [Which by the way is the reason why the sale of the letters side of the Post Office is also completely wrong]

    The current system involves the government selling monopoly franchises to the highest bidder. The successful bidder then fleeces their customers to pay for their high bid. This includes setting fares so high at peak travelling times that these trains run empty with later trains full to exploding. This is not a sensible way to use train capacity.

    If a competitive element cannot be introduced (as seen on the East Coast mainline) then a better business model would be for the government to award the running of the trains to the lowest bidder.

    1. Iain Gill
      August 15, 2013

      The “competitive element” on the East Coast mainline is between two nationalised industries. On the one hand we have the British nationalised rail company “East Coast” and the competiton is from the German nationalised rail company “Grand Central”.

      What we need is proper commercial organisations bringing proper competition.

    2. Jerry
      August 15, 2013

      @Richard: “If a competitive element cannot be introduced (as seen on the East Coast mainline) then a better business model would be for the government to award the running of the trains to the lowest bidder.

      No! Didn’t RailTrack teach us anything?…

      The whole franchise model is wrong, I have no problem with the railways being privatised -if they must be- but they need to be much bigger, be both passenger and freight and the railway company needs to be responsible for the infrastructure. Think the pre-WW2 UK railways…

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