IT’S BROKE – TIME TO FIX IT!

Rail fares have risen (1.1%) today; something that will directly impact on regular and occasional rail travellers, at a time when they can least afford it. 

At present rail fare increases are determined with a calculation based on RPI (retail price index) – a system that has attracted repeated criticism from respected economists and rail travellers alike. 

Passengers and commuters should not be hit in the pocket because the Government is intent on clinging onto a broken and outdated system.

For 2016 the rail fare rise was relatively small as a result of low inflation but at some stage inflation will return to normal, and the RPI based rail fare calculator will hit rail passengers hard as they are exposed to the substantial annual increases. 

A much fairer way of calculating fares would be to use the CPI (consumer prices index) that is consistently lower than RPI. The UK Westminster Government already uses CPI to calculate its liabilities such as social security.

Plaid Cymru believes in the public ownership of railways, and the full transfer of powers over railways, including the transfer of full funding for railway infrastructure, to Wales. A Plaid Government would work to devolve Network Rail and set up a not-for-dividend company in which profits are reinvested into better services rather than used to pay dividends. 

Our priority in Wales must be to deliver higher standards and lower journey times for passengers and commuters in all corners of Wales and invest profits to improve services.

THE RIGHT CHOICE?

The sensible choice would be for the Welsh Government to follow Scottish example of freezing off-peak prices, as RPI inflation figures (3.1% in the year to July) threaten another 4.1% increase from January 2014 across Wales. It is worth noting that Trade union leaders and transport experts have called on the Government to follow Scotland’s lead and freeze or limit rises in train fares for passengers.  The Welsh Government’s default position is that fares should only rise by 1% above the July inflation figure. The problem is that while the Labour in Wales administration could choose to freeze or limit the fares increase (this deal has been made every year since 2001 for the Wales and the Borders franchise) this is not set in stone.

A choice: Not for profit or Profit before people?

The Western Mail’s sources revealed yesterday that although Scotland is freezing the cost of off-peak journeys. There is a distinct possibility that hard-pressed Welsh commuters may well end up having to face another 4.1% increase in January 2014, this would be on top of the 4% rise at the start of this year (2013).  In Scotland, the cost peak-rail travel will rise with inflation at 3.1% and the freeze in off-peak travel will cover about 40% of rail journeys. A 4.1% increase in rail fares would increase the cost of an annual commuter route season ticket between Pontypridd and Cardiff from £880 to £916 and between Aberdare and Cardiff from £1,040 to around £1,082.

The current franchise was awarded to Arriva Trains Wales in 2003 and runs for 15 years, and is due to end in 2018. There have been many persistent calls for the rail franchise to be run as a not-for-profit operation – with profits being feed back into the system, rather than vanishing to pay shareholders dividends. The Welsh Government has been considering this option for when the deal ends. Arriva Trains Wales is the only train firm covered by the Welsh Government’s transport remit. Any longer-distance services e.g. Swansea or Cardiff to Paddington, are currently operated by First Great Western, who have their fares regulated by the UK Government Department for Transport. They have stated that rail fares on the routes it controls would increase by an average of 4.1% from January 2013.

To make matters worse the announced rise in rail fares will come take place against a backdrop of squeezed incomes, with average earnings increasing by just 1% and many experiencing pay freezes. There have been calls for the ending the annual inflation-plus fares rise, with them being replaced by a new formula, RPI minus 1% from 2015.  The rail fare rises which will arrive in January’s rise will be the sixth time in seven years that rail fares have outstripped wages. It has been calculated that between 2008 and next January rail fares will have risen some 40%, compared with a 15% increase in average earnings.

It should also be noted that the cost of some season tickets may rise by 9% as some routes are not subject to regulation under franchise agreements. All these rail fare increases will take place against projections of a 2.4% increase in average earnings next year. The TUC has suggested that since the railways were privatised, they have cost taxpayers about £1.2 billion pounds a year and this with what has been described as “minimal” investment in trains and stations.  

The Department for Transport continues to insist that the UK Westminster Government is investing record amounts in the railways to help deliver economic growth and boost passenger capacity. Additionally the Association of Train Operating Companies has also insisted that only a small proportion of income goes on profits, with most going on staff costs and investment. They also say that railway companies only make modest profits with 3p from every pound earned going towards profit, 17p goes towards staff costs, and 48p goes towards maintaining and improving infrastructure (including track and signalling).

At the end of the day, this is good news for rail operators and shareholders but bad news for hard-pressed long suffering rail commuters who are having to hand over even more of their pay packets for poor-quality services. We are where we are because regulated fares, including peak-time journeys, have been set at RPI inflation plus 1% since 2004 because successive Governments (both Labour and Con Dem) have been trying to shift the burden of paying for the railways from taxpayers to rail passengers.

It is Somewhat ironic that the persistent attempts of successive Westminster governments to wash their collective hands of their responsibilities for rail transport infrastructure come at a time when annual passenger journey numbers have increased from 750 million to 1.5 billion. The day that the rail franchise in our country is run on a not for profit basis, with profits being reinvested into the business, cannot come soon enough.

HERE WE GO AGAIN?

News that the Westminster Government is preparing to save billions of pounds from public spending on the railways. The McNulty review (last year) recommended that running costs should be cut by one third to bring them into line with other European rail networks, may make many people wonder as to whether or not this is a case of here we go again.

McNulty also recommended that ministers should conduct a full review of fares policy and structures, and aim to move towards a system that is seen to be less complex and more equitable. He also said that this would aid the management of peak demand and the more efficient matching of demand with capacity. The devil will no doubt be in the detail, but, no amount of spin can hide the fact that rail privatisation was a  disaster and a chronically underfunded British Rail was broken up into different competitive contradictory rail companies, which much plundering and disposal of assets along the way.

The National Union of Rail, Maritime and Transport Workers (RMT) fears that we could be talking about the loss of as many as 12,000 jobs, the wholesale closure of countless ticket offices and the creation of hundreds of unmanned station around the fragmented network . Rather than putting their hands up and recognising that rail privatisation failed (New Labour also failed to do this) the Con Dems will try to reduce state involvement by enlarging the private sectors share.

Ironically, despite the failed privatisation, our railways are currently booming, as a partial result of high fuel costs, which have driven car users back onto the rails. At the moment taxpayers (but not necessarily some Conservative party donors) pay around 40% of the rail costs. In January 2012, we saw the usual annual rail ticket price rises, when the average cost of regulated fares, such as season tickets, rose by some 6%.

To be honest, if the UK government wanted to cut the costs of running our railways, then they could do at a stroke by removing them from the control of private companies, who are more concerned with shareholders dividends and profit that providing a decent service to rail customers. Transferring the rail franchise to not for profit operations would eliminate the profiteering that has bled money from the system, cut waste and reduce fragmentation.

LEADERSHIP NOT LETHARGY!

Plaid’s right with its call for the management of Welsh railways to be put in the hands of a 'not for distributable profit' company when the current franchise contract with Arriva Trains Wales ends in 2018. In challenging times our country needs real leadership not lethargy, we need ambitious solutions to our problems, not make do and mend, if we are to make Wales the successful nation that it can be.

At a time when people are looking for an alternative to the car due to high fuel prices we have a situation where near continual hikes in rail fares (which just happen to boost rail company profits) mean that more and more people are finding rail travel unaffordable as well. Simple common sense suggests that we need to change the way the franchise system works here in Wales.

Plaid proposed to put Welsh railways into the hands of a ‘not for profit’ company back in November 2010 before the 2011 Welsh General Election campaign. If the current Welsh Labour government is serious about doing this then most of the preparation work for the re-franchising needs to be undertaken during the current Assembly term, so that there is sufficient planning time to develop a delivery model that is better suited to the needs of the people in Wales.

The Plaid Cymru plans would also mean that, in creating a not-for-distributable-profit organisation to run Welsh railways, more money could be made available to invest in rail services. This money could be invested directly to create more frequent services in the South Wales valleys, more frequent journeys to West Wales and on the Cambrian line, as well as additional services between the north and south of Wales. This could also mean more investment in new rolling stock to help keep pace with increasing passenger demand.

Now even though we are in difficult economic times, the Welsh government should be prepared to take radical and innovative action in order to get the best deal for the people of Wales. Sitting back and doing nothing is not an option, as rail fares in Wales continue to rise by as much as 11% while so many people are struggling to cope financially. If you are going to spend public money it is important to work it extra hard. At time when we have shrinking public sector budgets it is extra important that the Welsh government gets the best possible value for money out of every penny of public funds.

The Welsh government needs to wake up and to step up to the mark and use the excellent example of how a ‘not-for-profit’ company, Glas Cymru, can operate as the model to ensure the delivery of our nations rail services. There is absolutely no reason why train services here in Wales could not be run by a company with a similar not-for profit model, with a board containing representation from the Welsh government, experts from the fields of integrated transport, customer service, accessibility, rail projects and finance.

We need long term benefits not short term solutions, the creation of a not for profit rail franchise would deliver long term benefits for the economy of Wales and help to tackle climate change. When it comes to improving infrastructure, rail, is crucial to the sustainable development of the Welsh economy. An all Wales not for profit rail franchise could be a further step toward creating a national transport system for Wales, beginning to integrate all modes of public transport under one ticketing scheme similar, as is used in the Transport for London model.

ABSOLUTE CERTAINTIES...

As one year passes and another one beckons there are some certainties in modern life, one of which is the post-Christmas train fare rises. As of January 1st train fares will rise by an average of 5.9%. For what it's worth, in his Autumn Statement last month, the Con Dem Chancellor of the Exchequer, George Osborne capped fare increases at 6%, instead of the expected 8%. Since privatisation, rail fare rises have been linked to inflation, currently 5.2% as measured by the Retail Prices Index.

The Association of train Operating Companies, has said that fare increase would be used to pay for "new trains, faster services and better stations". Verbally at least this makes a pleasant change from simply using the increases in fares to maximise the dividend for shareholders. At the moment, passengers make a contribution of around £6.5 billion to the running of the railways, with taxpayers picking up the remaining £4 billion.

Let's be honest, the sooner our railways are run as not for profit organisations, with the profits being reinvested back into the railways the better. The public have tolerated what has become on occasion an often shoddy minimalist unconnected service. Most reasonably minded people would concede that historically the Department of Transport’s interest in Wales has been peripheral at best.

We need to prioritise investment in our railways and provide a decent affordable and reliable service for the passengers. We should get in a few years time a single rail franchise that directly answers to and works for Wales, rather than boosting company profits. A not for profit railway company that serves Wales could break up the cosy financial relationship that exists between the political establishment and the franchise holders – which would be no bad thing.

NORMAL SERVICE HAS BEEN RESUMED

So much for encouraging people to use the train, the Con Dem Government (much like its predecessor New Labour) has looked the other way as rail fares in Wales go up by an average of 6.2 percent. The rail operating companies have said that price rises will pay for newer trains - don't hold your breath! It's worth asking just how much will be left over from any monies secured for investment in our railways after the shareholders dividend (and the Government) have been paid off? No wonder, that despite the rise in petrol or diesel prices which might be expected to encourage people to find other means of getting to and from work, amongst other things that rail passengers (sorry customers) are somewhat disillusioned by the rail franchise holders latest spin.

How much longer are we going to tolerate a shoddy minimalist unconnected service? We need a single rail franchise that directly answers to and works for Wales, not servicing company shareholder dividends and ultimately the Department of Transport who's interest in Wales could be described as peripheral at best. We need to prioritise investment in our railways and provide a decent affordable and reliable service for the passengers. We need a not for profit railway company that serves Wales and we need to break up the comfy cosy financial relationship that exists between the Westminster establishment and the franchise holders whether they railway or power companies.

LETTING THE PASSENGERS TAKE THE STRAIN

News that overcrowding on trains in England and Wales will get substantially worse over the next four years despite rises in ticket prices should come as no surprise to passengers. The House of Commons's Public Accounts Committee (PAC) has noted that the Department for Transports own plans for suggested targets for increasing passenger places would be missed.

The PAC blames the failure on the absence of any requirement to improve capacity within train operators' contracts. The Con Dem government has said plans to improve the situation would be unveiled soon. However, consider that the Conservatives privatised the railways in the first place, it might be best not to have any great expectations on any firm hand being taken with the privatised rail companies. It's also worth remembering that New Labour actually said when they came to office that if the railways had not been privatised then they would have privatised them themselves.

Westminster MPs have expressed their concern about that the "already unacceptable levels of overcrowding will simply get worse and ever more intolerable". Public Accounts Committee - Fifth Report - Increasing Passenger Rail Capacity - makes interesting reading notes that the fundamental problem was a lack of any real incentive for the industry to supply extra capacity without additional taxpayer support.

Basically the current franchise agreements, train operators are required to make "reasonable endeavours" to give peak passengers "a reasonable expectation of a seat within 20 minutes of boarding", but there is no legal burden upon them to expand fleets or improve stations to achieve this.

So what this means is that it has fallen to the taxpayer to provide funds to Network Rail to carry out any upgrade work And that the franchise agreements are merely allow the privatised rail companies to milk their franchises for all they are worth at our expense. This is somewhat ironic because as a result of the economic downturn, the Association of Train Operating Companies actually expects demand for rail travel to grow by around a quarter over the next five years. So the long suffering rail passengers will get a double whammy - having to pay more to be less comfortable.

And this after 13 years of New Labour Government - what a mess!

HAVING IT BOTH WAYS!

Now it used to be said that you could not have it both ways - unless of course you are a private railway company. When it's convenient for the Rail Companies, they compare their annual price rises with predicted inflation, whereas a year ago, when inflation was on its way down, they compared their price rises with the previous year's inflation.

In reality what they should be doing, is comparing their price rises with last July's inflation which was minus 1.4%. This is about blatantly lining the rail company’s pockets at tax payers and rail passenger’s expense. On average UK train fares are already some 20% higher than the European average and if the UK Government is serious about reducing road congestion then it needs to urgently review the way that rail fares are regulated.

The Association of Train Operating Companies (AToC) faced criticism in early 2009 for failing to itemize each train company's average unregulated fares rise. However, some companies revealed their fare increases; Virgin Trains increased unregulated fares by an average of 2.8%, ScotRail's fares rose by 3%, and turn-up-and-go fares on Southern trains rose by 4% and the Southeastern train company’s unregulated fares rose by 7.3% and other fares rose by 2.8%. A number of companies, including National Express East Anglia, First Capital Connect, TransPennine Express and Merseyrail have frozen their unregulated fares.

As tax payers it is worth remembering that the private rail companies are receiving approximately some £ 5billion per year from the taxpayers, so there can be little justification for rail companies having the right to increase rail fares every year by inflation plus.

The real question is why rail passengers should have to pay higher fares regardless of the quality of service they receive, with UK rail passengers currently facing fares that are twenty percent higher than those paid by our European neighbours.

It’s time to face facts, to most people it is pretty clear that the privatised rail experiment has failed, it’s time to re-unify our rail service and to bring the rail services back under responsible public ownership where service and efficiency comes before profit at passengers expense.