ATOC responds to Labour’s claim they are “ripping people off”

Responding to Ed Miliband’s claim that train companies are “ripping people off”, Michael Roberts, Chief Executive of the Association of Train Operating Companies, said:

“Ed Miliband is at best suffering from amnesia or at worst displaying rank hypocrisy. Train companies are subject to rules laid down by the Department for Transport, rules that were created and rigorously implemented by successive Labour Transport Secretaries. It was also his party in government that switched from annual below to annual above-inflation fares rises in 2004 to reduce taxpayer subsidies to the railways.

“At a time when Britain needs the private sector more than ever to boost economic growth, this unsubstantiated slur seems to confirm an anti-business bias at the very top of the Labour party and is a unwarranted insult to the tens of thousands of people who work on the railways day in and day out to help keep the country moving.”

Railways have become a ‘rich man’s toy’

From: Evening Standard

Railways have become a ‘rich man’s toy’ but factory workers will still feel the benefits of a new high-speed link even if they do not get to use it, the Transport Secretary said.

Philip Hammond said action was needed to bring down some “eye-wateringly expensive” fares so that the whole network became more accessible to people on lower incomes.

It was unlikely that the socio-economic make-up of passengers would be much different on the new HS2 line between London and Birmingham than the West Coast Mainline, he told MPs.

WCML Ticket Prices Range from eye-wateringly expensive to really quite reasonable

However the massive investment would not only benefit passengers who enjoyed the faster journey times, he insisted as he gave evidence to the Commons Transport Committee.
“If you are working in a factory in Manchester you might never get on HS2 but you would certainly be benefiting from it if the sales director from your company is routinely hopping on it to jet round the world from Heathrow in a way that brings in orders that keep you employed,” he said.

One study suggested average incomes in Birmingham could rise by £300 as a result of the link, he said. It is hoped that the high-speed line will be extended to other cities such as Manchester.

His comments came in response to questions about whether HS2 would be made affordable.

“Uncomfortable fact number one is that the railway is already relatively a rich man’s toy.
“People who use the railway on average have significantly higher incomes than the population as a whole – simple fact,” he said.

He added: “The assumptions underlying the patterns of use of HS2 assume similar pricing to the West Coast Mainline, which I have said before ranges from eye-wateringly expensive to really quite reasonable, if you dig around and use the advance purchase ticket options that are available.

“And therefore the assumption is that the socio-economic mix of passengers will be broadly similar to those using the West Coast Mainline.”

Mr Hammond tried to play down the significance of his “rich man’s toy” comment after the hearing, insisting he had simply stated a fact about rail users and denying blaming high fares.

But he came under fire from Labour and train user groups who pointed the finger at his decision to allow fares to rise an average eight per cent next year for pricing some people off the network.

Commuters reacted with horror last month when the Government changed the formula for calculating increases, allowing the higher than expected hikes.

Speaking to the BBC, Mr Hammond said: “Is the railway expensive? Yes it is. Is that because we have too high costs in our railways? Yes it is.

“The Government is determined that, with the rail companies and Network Rail, we will tackle excessive costs… so it becomes more affordable for taxpayers and fare payers alike.”

From next year rises to regulated rail fares, which include season and saver tickets, will be calculated by adding three per cent to the headline retail prices index (RPI) rate of inflation for July. Previously it was RPI plus one per cent.

But the eight per cent rise can be taken by train companies as an average, meaning passengers could face even higher increases in their commuting costs.

At the time, Mr Hammond said raising fares was “a difficult decision” but extra money was needed to guarantee improvements which could ensure the railways were better value for money in future.

But shadow transport secretary Maria Eagle said the Government was “totally out of touch with the cost of living crisis facing commuters” and failed to understand how “eye-watering rail fare rises” would add to the burden on families.

Stephen Joseph, chief executive of the Campaign for Better Transport said: “Philip Hammond’s description of rail fares as ‘eye-watering’ must lead the minister to reconsider the steep fare rises currently planned by Government.

“Far from being simply ‘a rich man’s toy’ trains are also vital for many of those on more moderate incomes who need to get to work, and the Government will price many off the railways if it carries on with its plan to increases rail fares at three per cent above inflation over the next few years.

“Instead, the Transport Secretary’s promised fare review must deliver simpler, fairer and affordable rail fares.”

A spokesman for the Association of Train Operating Companies said it catered for passengers “from all backgrounds who travel on a range of different tickets.

“The average price paid for a single journey comes in at around five pounds and the sale of cheap advance tickets has doubled in the last few years, with almost a million sold every week.

“The Secretary of State is right to point out that the benefits of rail are felt well beyond the people who travel by train. The nation’s railways support jobs and businesses and play a key role in the British economy.”