Page last updated at 14:25 GMT, Monday, 27 July 2009 15:25 UK

Rail firms reject fare criticism

National Express train
The report called National Express's rail operation a 'high profile failure'

The rail industry has rejected claims by MPs that train operators take passengers for granted and charge too much for tickets.

The Commons transport committee had warned the rail franchise system was in "a muddle" and allowed train companies to "take advantage" of passengers.

It also criticised "unacceptable" fare rises of up to 11% above inflation.

The Association of Train Operating Companies said four-fifths of passengers bought discounted tickets.

The MPs' report said companies were making profits in good times but forcing the government to step in when revenues fell.

They pointed to the "high profile failure" of operators GNER and National Express as evidence of underlying problems.

And they urged the government to run East Coast trains itself after the Edinburgh to London route was hit by dwindling passenger numbers.

State ownership

The government is set to take the National Express-run franchise into state ownership after ministers refused its requests for its contract to be renegotiated.

But National Express said it continued "to meet or exceed all of its franchise commitments" and had "made significant improvements in the performance of the service taking it from the bottom to the top of the long distance operators".

"It is recognised the challenges facing East Coast are purely financial as a result of the recession," a spokesman said.

The committee of MPs said nationalisation could be a way of comparing the performance of the public and private sectors.

The franchise mess is beyond reform and the only real solution is a return to public ownership of railways
Bob Crow
RMT general secretary

They also raised concerns about ticket prices.

Passengers had to go to "extraordinary lengths" to get cheap fares and fares had risen out of all proportion to the rest of the economy, the committee said.

However, tighter rules will now tie all prices to inflation plus 1% - and should mean most fares are cheaper by next January.

The chief executive of the Association of Train Operating Companies, Michael Roberts, defended the industry against the allegation that it is taking passengers for granted.

"If you think about some of the longer distance routes, the Virgin West Coast Mainline up to the North West from London, or the National Express route up to Scotland, then these routes are actually competing both with the car and with the domestic airlines.

"They have to fight hard through the quality of service and the fares that they offer to passengers. And they are doing that with some success."

The Commons transport committee's Labour chairman Louise Ellman said: "The fare rises we saw this year were excessive.

"Companies cream off profits in good times, but leave passengers to pick up the bill when hard times hit."

Transport Secretary Lord Adonis has now closed a loophole which allowed train companies to increase prices of certain journeys if average fares remained within rules.

'High profile failure'

Anthony Smith, chief executive of rail customer watchdog Passenger Focus, welcomed the report.

"Passengers tell us in no uncertain terms that they find the fares and ticketing system confusing and unfair," he said.

Shadow transport secretary Theresa Villiers said the report was "scathing about the way Labour has run the rail franchising system".

The system is run in a fragmented fashion by companies whose principal aim is profit
Penny W, Exeter

Bob Crow, general secretary of the RMT union, agreed.

"The franchise mess is beyond reform and the only real solution is a return to public ownership of railways," he said.

However, Peter White, professor of public transport systems at the University of Westminster, told the BBC having longer franchises for companies could have "substantial benefits".

"For example, they could invest in improved ticketing systems such as smartcards," he said.

"But the problem is that if you've made a long-term franchise commitment and the company runs into difficulty, you must have some means of curtailing that franchise over a shorter period."

Liberal Democrat transport spokesman Norman Baker backed longer franchises which he said would "end the bureaucratic costs of changing operators every few years".

Lord Adonis said reforms to improve the rail franchising system were being considered - including longer franchises.

"When the rail franchising system was examined by the National Audit Office last year they found that it was delivering good value for money, and steadily improving services," he said.

"The government will consider the committee's report and respond fully in due course."

Graphic of rail price increases
1997 is the first year after the entire rail network was privatised
Regulated fares, eg season tickets and longer-distance, off-peak fares, are capped by the Government at 1% above inflation, as measured by the Retail Price Index. Prior to 2004 they were capped at 1% below inflation.
Unregulated fares, eg most leisure fares including what used to be known as cheap day returns, and advance tickets, are not pegged to inflation

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