Fare rise will ‘do nothing’ to help the economy
1 March 2022
On the day that rail commuters face a 3.8 per cent fare rise – with commuters coming into London hit by a double whammy as bus and tube journeys in the capital go up 4.8 per cent from today – Paul Tuohy, Chief Executive of Campaign for Better Transport, said:
“Today’s fare rise will do nothing to ease the cost-of-living crisis, it will do nothing help to the economy, and it will do nothing to tackle climate change. If this Government is serious about shrinking transport’s carbon footprint and growing the economy, it must do more to address the high cost of public transport by prioritising fares reform, introducing more contactless and PAYG ticketing and providing a better value flexible commuter ticket to cater to the millions of new hybrid workers.”
Campaign for Better Transport has calculated that from today (1 March), the average full-time worker commuting from Brighton into London will have to work until 19 April (seven weeks) just to pay for their annual season ticket. A commuter travelling from York into Leeds will have to work over a month until 5 April (five weeks), while a commuter travelling from Burton on Trent into Birmingham will have to work until 12 April (six weeks).
Last week, a report from Clean Cities Campaign found that UK cities were the most expensive in Europe when it came to public transport. London, Greater Manchester and Birmingham came bottom out of 36 European cities on affordability of public transport with residents being asked to fork out 8-10 per cent of their household budget on monthly travel costs. By contrast, in Oslo, which came top overall in the report, passengers spend just two per cent of their household budget on public transport fares.
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Notes to Editors
- Regulated rail fares, including season tickets on most commuter journeys, some Off-Peak return tickets on long distance journeys and Anytime tickets around major cities, make up almost half (45 per cent) of all fares and increases are set by the Government. In recent years, fares have risen each year by either RPI or RPI+1%, based on the previous July’s RPI figure. In 2022, fares will rise by RPI.
- In June 2021, the Government introduced a flexible commuter ticket which was meant to provide people commuting part time a saving. We had long called for a flexible season ticket, but crucially one that offered a comparable saving to a full time one. These tickets do not and can in some cases prove more expensive than a full-time season ticket. The Government must address this and improve its offer to part-time commuters.
- The Government continues to use the Retail Price Index (RPI) to calculate annual fare increases, rather than the accepted and more accurate measure of inflation, the Consumer Price Index (CPI). RPI over-estimates real inflation so consistently that the Office of National Statistics ceased using it as an official measure in 2013 and the Government has already switched to CPI for most other sectors. In July 2018, the then Transport Secretary, Chris Grayling, indicated that future fare rises would be pegged to CPI, but gave no date for the switch. Had CPI been used to calculate this year’s increase, fares would be going up by 2.1 per cent instead of 3.8 per cent.
- There is mounting evidence to suggest that a rise in rail fares leads to a reduction in passenger numbers. A 2003 report by ITS Leeds found that for suburban rail, a fare increase of five per cent leads to a three per cent reduction in patronage, and for inter-urban rail a fare increase of five per cent leads to a 4.5 per cent reduction in patronage. This calculation was done at a time when commuters were a very large proportion of rail travelers and were a fairly captive market. Since widespread working from home has become established during the pandemic, commuter journeys are now much more discretionary, on a par with leisure travel. Hence fare increases will lead to an even larger reduction in patronage. A recent Institute of Economic Affairs report stated that “Even if rail companies hike fares, they may still receive less revenue than pre-pandemic, as a high proportion of what were compulsory commuter trips with a low elasticity of demand are likely to become discretionary with a higher elasticity of demand. For example, an elasticity of −0.5 would still allow the railway to generate more total revenue from a ticket price rise, but elasticities of −1 and higher lead to an absolute loss of revenue.”
- Transport is now the biggest source of greenhouse gas (GHG) emissions, accounting for 27% of all domestic GHG, but different vehicles make different contributions to this. Collectively, cars are the main contributor of GHG (55 per cent), followed by lorries and vans (32 per cent), while buses, coaches and rail collectively account for just four per cent. (Department for Transport, 2019, Table ENV0201)
- Driving in a medium petrol car with one occupant produces more than 4 times as much greenhouse gas emissions per passenger kilometre as travelling by rail. (Most cars have only one occupant) (Source: Our World in Data using the BEIS/DEFRA Greenhouse gas reporting conversion factors 2019)
- How long people will have to work to pay for their season ticket was calculated by dividing the season ticket cost by the average daily salary using the 2021 median gross annual earnings for full-time employees by region from the Annual Survey of Hours and Earnings (ASHE).
- Campaign for Better Transport operates in England and Wales. Campaign for Better Transport’s vision is for all communities to have access to high quality, sustainable transport that meets their needs, improves quality of life and protects the environment. Campaign for Better Transport Charitable Trust is a registered charity (1101929).