Passengers have long wearily accepted that their trains might be delayed by the wrong sort of weather or the wrong type of leaves on the line. They are about to discover that some of them are buying the wrong sort of ticket. It was announced yesterday that Arriva had won the competition to run the Cross Country service previously operated by Virgin. In the small print of this agreement was the detail that this company will be able to impose price increases of more than 3 per cent above inflation every year until 2016 on what are known as “unregulated fares”.
There are now basically two different regimes for ticketing pricing in this country. The first consists of “official” or “regulated” fares where the Department for Transport has a direct influence, and these (mostly season) tickets will only have their prices increased by a shade above inflation. The prices of all other (“unregulated”) tickets, by contrast, which represent 60 per cent of those sold, will rise by much higher amounts, theoretically at the behest of companies such as South West Trains and Arriva but in practice because of the terms of new franchise agreements that have the approval of ministers. The agreements are framed so that ministers can distance themselves from the price rises.
It is not difficult to see why this is happening. The subsidy to the railways hit a record £6.3 billion in 2006 largely because of the escalating costs associated with Network Rail. The Department for Transport wants to see this sum reduced and that can only occur if fare income improves. It is profoundly dishonest, nonetheless, for price increases to be disguised in this manner. Fares should be fairer.