Rail fare rules blamed for crowding


Published: Wednesday 11th February 2015 by The News Editor

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Government regulation of fares is to blame for severe overcrowding on rush-hour trains, according to a think-tank report.

Scrapping the annual inflation-linked fare-rise system would allow train companies to offer far more flexibility in pricing to make better use of spare capacity on trains, said the Institute of Economic Affairs (IEA).

Train companies could offer passengers a better deal if they choose to travel at less popular times, said the IEA.

It added that t he “harmful effects” of fare regulation had been made worse by the pegging of rail fares to the rate of RPI inflation as the taxpayer is left to make up the difference if rail industry costs rise at a faster rate than inflation .

The IEA added that the existence of price controls had artificially pushed up demand for certain services, fuelling political pressure for large-scale infrastructure projects that were costly to the taxpayer.

It said the cost to the taxpayer of propping up the rail network was around £6 billion a year, accounting for 40% of all spending by the rail industry.

IEA transport head Richard Wellings said: “Rail passengers and taxpayers continue to be left out of pocket thanks to the continual intervention of politicians in the sector.

“Far from protecting rail users, price controls have distorted demand, leading to intense overcrowding on certain routes whilst other services are left underused.

“Rather than proposing expensive infrastructure projects, which are extremely costly to the taxpayer, politicians should simply give train companies the freedom to set prices so that demand for rail travel can be spread more evenly.”

Mick Cash, general secretary of the RMT transport union, said: “The idea that complete deregulation of fares would solve the crisis on Britain’s railways is pure and utter nonsense.

“It would simply allow the greedy train companies to restrict services and whack up the prices on the profitable routes in an all-out free-for-all.”

A Department for Transport spokesman said: “Peak commuter services are often the only way for commuters to travel into work and operators have the powers to use flexible off-peak pricing to encourage passengers to travel at less busy times.

“As part of its long-term economic plan the Government is investing heavily in the nation’s rail network to provide more trains, more seats and more services for passengers to address overcrowding.

“Fares play an important part in this process, but the Government recognised the financial pressures hard-working families are facing and capped regulated rail fares at RPI+0% for the last two years.”

Published: Wednesday 11th February 2015 by The News Editor

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