We’re pleased that the 2023 rail fare increases will be in line with earnings increases, not inflation, so announced as 5.9%. 

But this is rearranging the deckchairs on the Titanic.  The service currently being offered to passengers simply isn’t value for money, even when there isn’t industrial action.  Too many cancellations, a focus on cost, not the bottom line, so ignoring that most of the railways’ funding comes from passengers and that the service offered needs to meet their needs if revenue is to grow – at the moment, we see a service offering that is an active disincentive to optional travel and all those ticket sales that are lost are costing us as taxpayers money.  A switch in focus to managing the bottom line where growing revenue is at least as important as managing costs is essential.

And delivering that means that the railway needs to run itself like a business, not a cost centred Government Department, with accountabilities than span the entire product (costs, revenue, safety, customer service etc) and the power to take decisions local to the customer.  A culture that is focused on the customer and their needs, as well as the taxpayer and their needs (value for money) is essential.  Only by doing that can passenger and freight revenue grow and costs to the taxpayer kept sensible.

We can’t be optimistic though that the fare rise is a recognition of the trade offs of numbers of passengers versus income per passage – a classic commercial trade off, so we have no crumb of comfort on a focus on the bottom line.

On the chosen rate of 5.9%, we’re sad, though, that there was a reference to the difference from RPI, the benchmark in recent years.  We hope we won’t see a return to the obsolete RPI benchmark for 2024 and later years and that the same approach will continue.  It is also important to recognise that for many, their pay will have gone up by less than 5.9% (the median for July 2022) is 6.6%, so it will be a substantial minority where pay isn’t keeping pace.

We can also see that an increase in rail fares that is more than being offered to many rail staff (one example offer is 4% for 2022, and 4% for 2023, including productivity improvements, another is £1,750 / 5% for 2022 and 4% for 2023 without changes in conditions) will not help resolve the current industrial disputes (but at least it isn’t the ‘red rag to a bull’ that a RPI based increase would almost certainly involve).

And, at least, Rail passengers are not the only travellers who will pay more next year.  Absent any Government action, Fuel Duty will rise (the law provides for an increase in the absence of a specific override) by around 12p a litre (or c 7% based on current pump prices).  There’s no change though for Car Tax (except for zero emission vehicles), nor for Air Passenger Duty, where last year’s budget reduced the rates for domestic flights – something that we think is not good for the environment and climate change where rail is a credible competitor such as Edinburgh & London.