The great train fare robbery: We already pay up to 10 times more than in Europe… now they’re rocketing again
Commuters heading to London pay nearly 10 times more than those on Italy’s state-run network do to go the same distance to Rome
The Mirror can today reveal how the fat controllers of our privatised railways run a gravy train of profit – with passengers ripped off compared to our European neighbours.
As the latest rises send rail fares crashing through the buffers, we highlight how much more Brits are charged than those on the continent for similar-length journeys.
Commuters heading to London pay nearly 10 times more than those on Italy’s state-run network do to go the same distance to Rome.
In most cases, customers here are forced to stump up three-and-half times extra for an annual season ticket to travel into their capital.
This is before yesterday’s bombshell announcement that they will soon be clobbered with a rise of up to 11% – sparking the fury of commuters, union leaders and transport campaigners.
It means hordes of passengers will now be paying £100 a week just to get to work from January – adding to a growing clamour for our railways to be re-nationalised.
Operators claim the rises are needed to fund improvements but TSSA rail union leader Manuel Cortes said: “This is all about squeezing a captive audience, the commuter, until the pips squeak.
“It’s little more than daylight robbery.”
The Mirror can also today lay bare the lie that putting our network in private hands improved efficiency.
In the years leading up to privatisation – which came into force in 1994 – British Rail was supported by Government money to the tune of between £988million and £1.6billion, averaging £1.14billion.
Yet last year Network Rail was subsidised by the taxpayer at a cost of £3.96billion.
The huge increase has come as millions of pounds a year find their way into the pockets of rail firm shareholders.
But the Tory-led Coalition is insisting on passengers paying more in fares to reduce the taxpayers’ subsidy and brought in the 3% above inflation formula to hike ticket prices.
Yesterday’s announcement came with the release of the Retail Prices Index figure for July, which is used to determine how much regulated rail fares, including season and saver tickets, are allowed to increase in January 2013. RPI rose to 3.2% from 2.8% the previous month – and the average fare increase for England is calculated by adding 3% to it, meaning a hike of 6.2%.
But some tickets can go up by a further 5% as long as they are balanced by cuts on other fares.
Our research shows a 2011 season ticket for a 23-mile journey from Woking in Surrey to London, including Tube travel, was already £3,268 – yet in Italy, a 22-mile annual pass for a trip from Velletri to Rome costs just £336.17.
Elsewhere, a Manchester to Liverpool (32 miles) season ticket costing £2,688 will go up by more than £160 in January.
Commuting from Manchester to Leeds (40 miles) will go up from £2,344 to £2,489 and from Newcastle to Middlesbrough (59 miles) will rise from £2,044 to £2,171.
And this Government is committed to raising fares by 3% above inflation for the next three years.
The cost of the running the railways is about £11billion, of which £7.2billion (65%) comes from fares.
The Government wants to raise that share to 75%.
At noisy demonstrations at 40 railway stations around the country, the increases were branded “untenable” because fares are rising three times faster than salaries.
Union leaders also warned train travellers could see a deterioration in services as 20,000 jobs are at risk under cost-cutting plans.
Tens of thousands of commuters will join the “£5,000 a year club” – the amount they’ll have to pay for their season tickets when the fares rise in January.
Figures produced by the TSSA rail union show those travelling from the Home Counties to London will have to spend more than £100 a week.
And the Campaign for Better Transport says commuters are spending up to 15% of their salary on travelling to their jobs.
RMT rail union Bob Crow said there was a growing case for the re-nationalisation of Britain’s railways.
He declared: “This is the ConDem Government handing out a massive kicking to commuters.”
He added: “This money will not be invested back in services, it will be trousered by the greedy train operators as another windfall profit.”
Campaigners also warned disabled people could no longer afford rail travel as they are more likely to live in a poorer household.
Labour’s Shadow Transport Secretary, Maria Eagle, said yesterday: “To cut the costs of the rail industry to both farepayers and taxpayers, we need to reform the costly fragmented structure of the industry which is the legacy of a botched privatisation and look at the impact caused by money leaving the industry in private profit.”
Rail industry experts say estimates of the dividend payments made to shareholders from the profits of train operating companies are difficult to pin down.
Company annual reports do not separate profits for train operations from those for bus or international operations – but in 2009, dividend payments from the “big five” transport operators (Arriva, First Group, National Express, Go-Ahead and Stagecoach) totalled £227million.
Over the period 1997-2010, research by the rail union RMT found that the same operators had paid total dividends of £2.1billion, of which they suggested at least half came from rail.
But Rail Minister Theresa Villiers said: “We are pressing ahead with a massive programme of rail improvements to tackle crowding and improve services and rail fares are making an important contribution to delivering this at a time when taxpayer funds are limited by the pressing need to tackle the deficit.”
Taxpayers AND passengers worse off under privatisation: political editor Jason Beattie’s analysis
Among the worst legislation over the past 50 years, it is hard to top John Major’s Railways Act which came into force on April 1, 1994.
Defying all logic, responsibility for the tracks was handed to Railtrack, which soon went bust, and the trains to the train operating companies.
The Government also flogged rolling stock leasing firms, costing an estimated £1.1billion.
The result has left Britain with the most expensive fares in Europe.
Before privatisation, railways received an average £1.14billion in subsidy. Last year it was £3.96billion.
During this period, the private firms have paid about £1billion in share dividends and the rolling stock operating firms up to £2.5billion.
Taxpayers pay millions each year because of £20billion debts racked up by Railtrack and Network Rail.
Transport Secretary Justine Greening has said renationalisation is the last thing the railways need.
But many wonder whether it is a better deal for passengers who have been taken for an expensive ride.
Passengers have been betrayed: Campaign for Better Transport chief Stephen Joseph’s analysis
In the 1990s, the privatisation of British Rail was highly controversial and, in an attempt to appease critics, the Government agreed to regulate many train fares to protect passengers.
The aim was to ensure that where a train company was essentially in a monopoly, it couldn’t exploit its position by big hikes in fares.
And most fares were pegged at the rate of inflation – but in 2004, it became a system of extracting more money from passengers.
They rose at 1% above inflation year on year.
In 2010, George Osborne announced fares rising even higher at 3% above inflation for 2012-14, saying it would “make life better for passengers” as part of a wider investment.
But the policy of protecting passengers has been turned on its head – they are being squeezed more and more.
Commuters already have reason to complain – we have the most expensive fares in Europe – and a 10th year of above inflation rises only worsens the situation.
This is an example of what happens when Gov’t engages in privatization. This is not to say privitization could not be cheaper, but these agreements tend to have the private sector double -dipping….ie subsidies for Gov’t and fare increases… the devil is in the contract details.