Have train fares gone up or down since British Rail?

 
Ticket machine

It is 20 years since rail privatisation was set in motion. Are fares higher or lower today than they were under British Rail?

January is the traditional time of year for teeth gnashing from rail passengers as fares rise again.

Twenty years ago, the wheels of rail privatisation were set in motion. In January 1993, John Major's government enacted the British Coal and British Rail (Transfer Proposals) Act 1993.

At the time, the message was that fares would rise no faster under the new privatised railway than under BR. It was suggested that they might even fall.

"I see no reason why fares should increase faster under the new system than they do under the present nationalised industry structure," Transport Secretary John MacGregor told the House of Commons in February 1993. "In many cases, they will be more flexible and will be reduced."

So two decades on, what has happened?

Since the last set of British Rail fares were published in June 1995, inflation measured by the Retail Prices Index (RPI) has been 66%, according to research by fares expert Barry Doe for Rail Magazine.

Doe's figures show a huge variation in fares since privatisation.

A single from London to Manchester has gone up by 208%, up from £50 in 1995 to £154 today. That is more than three times the rate of inflation.

But a season ticket for the same journey has risen by only 65% - just less than inflation.

Comparison of increase in fares since 1995

Doe's research considers walk-on fares, which include season tickets, but not tickets that are bought in advance. Advance tickets are cheaper but there is no solid data on the cost or number sold.

Peak-time single tickets have risen sharply. For example, a single from London to Glasgow, which was £65 in 1995, is now £169 - a rise of 160%. A single to Exeter was £37.50 but is now £114.50 - a rise of 205%. London to Swindon has gone from £20 to £58.50, a rise of 193%.

Percentage increase in fares since 1995

Yet at the same time, season ticket price rises hover just below or slightly above the rate of inflation, with an increase of between 55% and 80%. A season ticket from Nottingham or Norwich to London has risen by 55% and 63% respectively.

Like season tickets, the price of off-peak returns has been capped by government since privatisation. A return - coming back within a month from London to Birmingham costs £49 today compared with £31 in 1995 - a rise of only 58%, well below the rate of inflation. This is with Virgin, the same company that operates expensive singles to Glasgow and Manchester.

There are anomalies. Train operator C2C, for example, operates the line from London to Shoeburyness, in Essex. The cost of the journey is far cheaper in real terms across all ticket types than it used to be. A single has risen by just 17%, while a season ticket has gone up by 57%.

At privatisation, it was felt that certain customers needed protection, says Mark Smith, founder of website The Man in Seat Sixty-One, who used to set fares at the Department for Transport.

The theory was that at certain times of day, such as during rush hour, the market would not operate a level playing field.

Ever since, the government has protected season tickets and off-peak returns. Before 2004, rail operators could only raise regulated fares by inflation -1%. From that year, this became inflation +1%.

Meanwhile, other fares were unregulated, meaning the train companies were allowed to set them as they wished.

The feeling was that those travelling long distance in peak time would be mainly business travellers who could afford it. But the system has led to massive variation, says Doe.

"Because operators were forced to introduce capping, they were forced to put unregulated fares up a lot." Commuters have been "featherbedded" but other passengers have been hit hard, Doe argues.

There is a double reason why unregulated fares rise faster than regulated fares, says Christian Wolmar, author of Broken Rails.

Previously in the Magazine

Searching for the most expensive train journey

Rail fares rose by 6% in January 2012. The Campaign for Better Transport suggested that season tickets for commuters around London cost more than three times those of their Spanish and German equivalents, and 10 times more than those in Italy.

First because they can, he says - there is no government control. But second, the rail companies keep all the money they make on price increases on unregulated journeys. On regulated fares, the government receives the above inflation increase.

"The system has an incentive to put unregulated fares up by more than the amount of regulated fares because the train companies retain all the money," Wolmar says.

But the Association of Train Operating Companies (ATOC) says that Doe's figures miss out the million advanced tickets it sells a week.

"Mr Doe's table quotes London to Edinburgh as costing £152 for a single," an ATOC spokesman says. "But one check of the East Coast website and you'll find that you can make that journey for less than £29. That's significantly cheaper than in 1995."

It points out that only between 2% and 4% of tickets sold are the flexible Anytime tickets, such as the single ticket measured by Doe.

ATOC admits it doesn't have figures on the proportion of tickets sold that are "advance". According to Lennon rail ticket sales database, about 4% of tickets sold between November 2010 and November 2011 were "advance".

So while few people travel on the most expensive single or on advance tickets, most rail users use season tickets or off-peak returns.

There are no figures showing the average cost per passenger mile.

ATOC says that in 1994-95 the average cost of a single journey was £4.82 compared with £4.95 in 2011-12. This is a rise of 2.7% when adjusted for inflation, the spokesman says. But combining all journeys both long and short, it doesn't give a breakdown of which journeys are rising in cost and which are falling.

Train platform

The organisation adds that four out of five journeys today are made on a rail card or advanced ticket.

Advance tickets are all very well, but don't suit everyone, says Christian Wolmar, author of Broken Rails.

"They (the train companies) have people over a barrel," Wolmar says. "If you have to travel at 8.30 in the morning you have to. You don't have the choice of waiting for the 9.30."

But Smith believes privatisation has delivered a more intelligent fare structure.

People might assume that fares would have gone up slower under British Rail, says Smith. But for commuters, the reverse might have been true as there was no capping of fares under BR, he points out.

On longer distance routes, he says, price variation has allowed the rail companies to compete with both coach companies on the bargain advance tickets and airlines for the expensive peak time seats.

"In practice it's been a success. It's been one of the factors at getting more people travelling longer distance by rail while at the same time raising more revenue. So in some ways privatisation has been a good thing."

There is more to a railway's success than just low fares. Other measures are safety, punctuality, comfort, frequency of service, convenience and simplicity. On many of these, the privatised railways have a good record.

On simplicity, the network seems to get a big fail from commentators. Triangular journeys (returning via a different route) are harder now than under British Rail, says Smith.

South West Trains

And some fare rises are exceptionally complicated, according to Doe's research. In a few cases, off-peak returns have risen hugely even though these fares, in theory, are regulated. A London to Leeds return is now £154, up from £55 in 1995.

Start Quote

There were far fewer trains under British Rail and more of them ran late”

End Quote Rail Minister Simon Burns

Doe says these big rises occur when a train operator gets around the government cap by removing the super saver and replacing it with a more expensive super off-peak ticket, before then bringing in a more expensive saver, known as off-peak return.

Confused? Most people are, says Matthew Engel, author of Eleven Minutes Late. Visitors to Britain are regularly forced to pay more than they should simply because they don't understand the multiplicity of ticket types and conditions, he says. "I'm convinced the train operating companies have not allowed any rationalisation because they make money from this. They know that there's only Barry Doe who understands (the correct fare)."

Critics argue that privatisation has led to big fare rises despite increased public subsidy. Money has had to be found for salaries and dividends, they claim. And no-one knows why rail infrastructure costs so much more in Britain than the rest of Europe.

According to ATOC, train companies make only "modest" profits, averaging 3% of revenue.

Total government subsidy for the railways increased from £2.17bn in 1992-93 to £2.59bn in 2002-03, according to figures from the Office of Rail Regulation. It peaked in 2006/07 at £6.3bn, before falling back to £3.9bn in 2011-12.

Electric Locomotive, British Railways Class 84

Rail Minister Simon Burns says privatisation was "the right decision 20 years ago and is the right decision for today's railways."

Under British Rail there was a lack of investment that today's privatised railway has had to make up for, he argues.

"There were far fewer trains, more of them ran late, when they arrived at all, and since privatisation passenger satisfaction has improved significantly."

Re-nationalisation is not a possibility in a cash-strapped country. But Doe's research raises the question of fairness. Are commuters being overprotected?

Most of them don't work out how many miles a year they do, he says. "Brighton to London is 500 miles a week." But there's no appetite to tinker with the status quo, Doe says. Commuters are a "big lobby group" who neither the Conservatives or Labour want to antagonise.

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  • rate this
    -3

    Comment number 61.

    53. "If you need to make a profit as well as provide a service it will always cost more."

    Untrue, one of the main advantages of private companies is they often run things much more efficiently than the government can. It's a shame we haven't got a fully privatised railway, just the worst of both worlds.

  • rate this
    +5

    Comment number 60.

    The answer is not to renationalise.

    The answer is to stop giving private companies our money through subsidies and force them to run an, efficient, punctual, regular train service. If they cant do that - penalise them. We are not asking for champagne and caviar here - this is the very basics.

    If I ran a train company I would have done this without prompting.

  • rate this
    -7

    Comment number 59.

    Surely it is natural that peak time fares should be cheaper?
    The cost to move the train is the same. Staffing seems the same, but 100x the passengers.
    Therefore the per passanger cost is more expensive off peak and there is no reason this should not be reflected in the prices.

    Yet peak time travellers are ripped off because the torys 20 years ago thought "they can afford it"

  • rate this
    0

    Comment number 58.

    35. Dr_Ads
    What was the tax payer subsidy PRIOR to nationalisation? Zero."

    You're having a laugh..

    In the years leading up to nationalisation, British Rail was subsidised between about 1 and 1.6 billion pounds a year.

    The subsidy as a proportion of revenue was not much different to today.

  • rate this
    +13

    Comment number 57.

    These, "What would be the price be if the service wasn't privatised," arguments really make me laugh. Greedy people just trying to justify the extortionate costs they charge.

  • rate this
    +1

    Comment number 56.

    The whole privatisation vs nationalisation debate is a red herring.

    The biggest change since the 1990s is that rail passenger numbers have rocketed but the number of rail lines has barely grown. So it doesn't matter whether it's BR or First Group running the services, they are having to squeeze more passengers and more trains on to the same lines.

    Until this is addressed, little will change.

  • rate this
    +2

    Comment number 55.

    @49 Blame the government for the above-inflation fare rises. It is the government that sets the level of fares and its purpose in setting them at above-inflation rates is to make the passenger pay more and the taxpayer less for the railways. Improving quality doesn't come into it.

  • rate this
    0

    Comment number 54.

    I must admit I always assumed the mega-cheap advance fares were as rare as hen's teeth, but recently I got a return ticket from Guildford to Birmingham for £21, booked 4 weeks in advance, which even included the tube journey across London. Admittedly this was a weekend in January and maybe I was just very lucky to get one, but it shows things aren't all bad.

  • rate this
    +1

    Comment number 53.

    I never believe statistics on rail privatisation ever since a week before it was privatised they raised my fare by £1 and then a week after dropped it by 50p and claimed fares had fallen! If you need to make a profit as well as provide a service it will always cost more.

  • Comment number 52.

    All this user's posts have been removed.Why?

  • rate this
    0

    Comment number 51.

    Ahh but they get you other ways!! I can no longer buy a periiod return, which would for example be £10, for failrly short trips. Wheras a day return may be say £8 I have to buy 2 singles at around £7 each a Total of £14 if I want to come back the following day.There is no comparison then for a period return, and they can rip you off even more.......

  • rate this
    +1

    Comment number 50.

    "Re-nationalisation is not a possibility in a cash-strapped country."

    Why not? Why would we pay for it? We've paid massive amounts in subsidies to shareholders for years for literally nothing in return from them. I don't see any need for a nationalization programme to pay a penny more.

  • rate this
    +3

    Comment number 49.

    How is this even a valid question? Rail fares have increased beyond recognition since privatisation. They continue to rise above inflation despite no noticeable improvement in quality. It's extortion, same as utilities and the same will happen with healthcare if we allow it.

  • rate this
    -2

    Comment number 48.

    It is NOT the visible profits of operators that is important, it is the profits of parent companys who act in the same imoral but legal way that Starbucks/Google/Amazon act, via creating a money merry-go-round that distorts/deceives to enable profiteering from over-inflated costs that companys charge themselves.

  • rate this
    -1

    Comment number 47.

    Privatisation was supposed to I summise create cost savings and improve efficiency. So surely RPI comparison only tells half the story inaccurately!

    Season ticket holders see no improvement certainly in handling engineering projects and running a railway under stress. Less staff helping customers and greater reliance on technology has not improved my experiences or my rail expenses pallatable.

  • rate this
    +1

    Comment number 46.

    40. "I suspect there are a token number of these [Advance Fares] actually on offer"

    Then you may be suspecting incorrectly. This study suggests otherwise:

    http://www.seat61.com/uk-europe-train-fares-comparison.html

  • rate this
    0

    Comment number 45.

    ~"Back then our railway system not only worked, but it was the envy of the world and it was all created by private enterprise."

    Completely wrong. Massive direct and indirect state support, including a forced merger into the four big companies - the railways were bankrupt and reliant on the state.

    The current operators are subsidy junkies - massively increased subsidy & massively higher fares

  • rate this
    0

    Comment number 44.

    #12 Terrana
    http://www.brfares.com/#fares?orig=CDF&dest=EDB&rlc=&expert=on

    £160 return with flexible times (unlike your plane) or various fixed-time-of -travel singles from £30.

    Never believe a booking engine unless you understand first

  • rate this
    +1

    Comment number 43.

    What galls me is the blatant rip off where single fares are concerned. A return costs me £2.80 and single £2.60.

    I can understand a single costing slightly more than half price say 60% but this is 93%.

    Good old rip off Britain at its best.

  • rate this
    0

    Comment number 42.

    I use East Coast mainline (London-Leeds) every week and generally pay £60 return standard class - I always buy Advance tickets but travel during peak hours. The trains are reliable and comfortable, stations clean and safe and staff friendly. I consider the service remarkably good value and cannot believe that this would've been possible in the nationalised days of BR. Stop knocking the railways!

 

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