Railways need more competition, not less

Millions of commuters will end their Christmas break and return to work today to face yet another increase in ticket prices. Regulated fares, which cover 45 per cent of the total and are based on last July’s inflation figures, have risen by 3.1 per cent, while some set outside the scheme, such as off-peak leisure tickets, will go up by even more.

Over the past 10 years, because wages failed to keep pace with price rises, rail fares became an added burden on hard-pressed travellers, and commuters in particular, since they have little option other than to use the railways.

But there are straws in the wind. After a long period of growth in passenger numbers, these declined in 2017 as more people worked at home, put off travelling by high fares. Season ticket sales among commuters fell steeply, casting fresh doubt on the viability of some struggling franchises. It is not yet clear whether this trend has continued, but previous assumptions that higher costs would not deter passenger growth need to be revisited.

It is widely accepted that extra money from fares is needed to improve track and rolling stock. A political decision was taken years ago to load more of the network costs on to passengers instead of the general taxpayer, and this must still be the way forward. This was a position Labour accepted under Tony Blair and Gordon Brown but now, under the party’s new Left-wing leadership, it wants to use disgruntlement over the railways to argue for their renationalisation. Whatever the flaws of the existing system, however, it still works better than when it was nationalised and it is getting investment that a cash-strapped state would have denied the railways.

Many of the complaints about late trains are often not the fault of the operators but of Network Rail, which is effectively state-controlled. Overall passenger satisfaction remains higher than under British Rail. The old nationalised system was not a golden age. This does not mean there is not ample room for improvement in rolling stock, stations, timetabling and fare structures. More competition, not less, needs to be injected with greater opportunities for new entrants to break into the market.

Writing in the Telegraph today Chris Grayling, the Transport Secretary, makes a significant statement that “the franchising model cannot be the path for the future” of the railways. But assuredly, neither can renationalisation.