Want lower rail fares to lure people out of their cars? We need a rail revolution

Independent

04-03-2025

Train tickets in England and Wales cost 4.6 per cent more than they did last week. After I wrote about the rise, Michelle Hockley was prompted to ask: 'Why a huge hike in prices when we claim we want to curb traffic pollution and protect the environment?'
Britain is not alone in having some very high fares. Nor are we unique in suffering chronically unreliable trains. And other countries also subsidise their railways to the tune of billions of pounds each year. But no other nation combines all three characteristics quite like the UK.
Routinely, one in 25 trains is cancelled; northwest England is particularly prone to axed departures. Taxpayers, many of whom never go near a train, pump £12.5bn a year (or £400 per second) to keep the railways sort-of running. Yet, despite the Treasury's munificence, fares in England and Wales are rising faster than inflation.
By normal political standards, transport secretaries tend to have brief lifespans; five different ministers have held the role in the UK in the past 30 months. Such a short tenure bestows at least one benefit: mercifully, these women and men need not endure responsibility for the excruciating conundrum of the railway for long.
The fare increase certainly does not make the government look determined to shift people from road to rail in pursuit of net zero targets.
I am currently travelling through Germany on a nationwide Deutschlandticket. For the right to travel anywhere in the country on all public transport except the fastest trains for an entire month, I paid €58 (£48). Germany also subsidises rail heavily, and its trains are also unreliable. But at least the fares are low.
Ms Hockley's sensible question usually gets a stock answer: the railways cost a fixed amount to run, roughly £25bn a year. Conventional wisdom says the cost can be met only by rail passengers and the public purse. Last year ticket sales covered less than half of the total bill. To ease the burden on taxpayers, the argument goes, the financial needle must be tilted towards the traveller.
This reasoning is lazy. It regards revenue and costs as fixed. For another source of revenue, let's tackle domestic airline passengers. Bizarrely, Rishi Sunak halved Air Passenger Duty (APD) on flights within the UK. Northern Ireland certainly deserves a break, as do isolated regions such as Cornwall and Scotland's Highlands and islands. Yet the Tory ex-leader's tax cut chiefly benefits relatively well-heeled travellers between Edinburgh and London – a route on which three different rail firms compete.
Add £20 or more APD to journeys where trains provide a perfectly good alternative. Such a tax would be easy to avoid: just don't fly when you could take the train on links such as Newcastle to London or Birmingham to Edinburgh. The cash collected would be augmented by higher rail fare revenue as people switch from plane to train. All of this would ease the burden on 'normal' taxpayers, and the environment as airlines cut back on these short flights. That is the easiest of wins.
Much harder – and more important – is to reduce the cost of the railway. More driver-only operation of trains looks inevitable. Productivity reforms not tied to wage hikes are essential. And deeply controversial issues such as closing ticket offices will doubtless come back to the table.
These changes will take resolve from the current transport secretary, Heidi Alexander. Last month she told Parliament: 'We will be increasing value for money in the way we operate our railways. To start off with, we will be getting rid of up to £100m a year in management fees that we are currently paying out of the public purse to the train operating companies.'
Every little helps, but Ms Alexander will be aware that the sum represents just 0.4 per cent of the cost of the railway. She added: 'We are determined to drive up performance on our railways and give better value for money to the taxpayer.'
Labour's mechanism for the rail revolution is Great British Railways. This new organisation will subsume all the train companies who are currently instructed by the government what services to run and how much to charge, as well as Network Rail – the publicly owned infrastructure provider.
The transport secretary says: 'By bringing together the management of track and train, we can strip out duplication in our railways, provide better value for the taxpayer and ensure that trains are turning up on time, with reliable and punctual services. That is what we will deliver.'
I hope she has the staying power.