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Rail Fares

Oral Answers to Questions — Transport – in the House of Commons at 2:30 pm on 10th March 2009.

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Photo of Ann Winterton Ann Winterton Conservative, Congleton 2:30 pm, 10th March 2009

What recent assessment he has made of levels of rail fares.

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Photo of Geoff Hoon Geoff Hoon Secretary of State, Department for Transport

We continue to regulate rail fares to balance the protection for passengers and taxpayers while allowing significant investment in rail. We have made it clear that the average cap—usually the retail prices index plus 1 per cent.—will be applied next year even if RPI is negative, leading to lower regulated fares in January 2010. From January 2010, the cap will also apply generally to individual regulated fares.

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Photo of Ann Winterton Ann Winterton Conservative, Congleton

The Secretary of State will be aware of the horror expressed by commuters and passengers about the huge hike of more than 6 per cent.—the figure is much higher in some areas—in rail fares this year. I welcome his reaffirmation on behalf of the Government that fares next year will be pegged to the standard formula, but will he also assure us that rail companies will not cut services?

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Photo of Geoff Hoon Geoff Hoon Secretary of State, Department for Transport

The hon. Lady refers to regulated fares. To deal with her last point first, the services are governed by the franchise agreement entered into by the train operating companies. Of course, we will not allow those agreements to be changed without a clear, good reason.

To deal with the generality of her observation, support for railways comes from two sources: fare-paying passengers and taxpayers. If we are to maintain the level of investment in our railways that I think we should have, we have a clear choice. We can either allow fares to be increased according to the consistent arrangements that have operated for many years, or we can increase the subsidy from the taxpayer. If she is unhappy about the balance that we have struck, she needs to say so, as does her party. Instead of simply making generalised complaints, I want to hear what specific proposals the Conservative party would make about fares and the level of taxpayers' subsidy.

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Photo of Louise Ellman Louise Ellman Chair, Transport Committee

Does the Secretary of State share my concern that high fares might price people off the railways, and will he look again at the financing of the railways, so that we can avoid the situation that is planned, whereby in 2013 the fare payer will be paying three times as much as the taxpayer?

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Photo of Geoff Hoon Geoff Hoon Secretary of State, Department for Transport

I do recognise that concern, and it is right that my hon. Friend should raise it, but I repeat the answer that I gave a moment ago: there are only two sources of finance for our railways. We have to strike a balance between the interests of fare-paying passengers and the interests of taxpayers. I believe that we have the right balance to maintain the necessary level of investment in our rail network.

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Photo of Norman Baker Norman Baker Shadow Secretary of State for Transport

Over the next five years to 2014, the money raised towards fares by passengers will increase from £23 billion to £39 billion, according to the Transport Committee, while the Government's contribution will be significantly cut. Given that our rail fares are already the highest in Europe, and given the swingeing increases this year, how can the Secretary of State possibly justify that massive increase in the take from passengers, and why did he not freeze rail fares this year, as the Liberal Democrats advocated? We indicated how we would pay for that, too.

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Photo of Geoff Hoon Geoff Hoon Secretary of State, Department for Transport

I have been doing a little research into what the Liberal Democrats advocate, and it is interesting that despite the hon. Gentleman's clear personal commitment to transport, he is unable to persuade any of his colleagues to support him. The Liberal Democrats would cut £1 billion from the transport budget, in the highly unlikely event of their being elected to take responsibility for anything. We need to put anything that the hon. Gentleman says about transport in context: he has not even been able to persuade his own colleagues that transport is a good thing.

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Photo of Rob Marris Rob Marris Labour, Wolverhampton South West

One of the things that rail passengers expect for their rail fares is a decent, modernised railway station. Will my right hon. Friend give me some indication of what encouragement he and his Department could give on the rebuilding of Wolverhampton railway station?

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Photo of Geoff Hoon Geoff Hoon Secretary of State, Department for Transport

I had the considerable privilege of visiting Wolverhampton railway station only last week. [Interruption.] No, I make it clear to the House that not only did I visit it, but I got out at the station, too. Thanks to the assiduous efforts of my hon. Friend, I was able to see for myself the exciting plans for the redevelopment of Wolverhampton station and the nearby bus station, to provide a real transport hub for the people of Wolverhampton. I congratulate him on his efforts to bring real investment to Wolverhampton and to his constituents.

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Photo of Stephen Hammond Stephen Hammond Shadow Minister (Transport)

The facts show that the Passenger Focus report published in February this year highlighted value for money as the most serious concern for passengers. The facts also show that the most packed trains are running at more than 170 per cent. capacity and that, since 2003, regulated and unregulated fares have risen by a third. Do not the facts show that after a decade of Labour control, the story is one of overcrowded trains, value for money falling, and the taxpayer having to pick up the tab?

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Photo of Geoff Hoon Geoff Hoon Secretary of State, Department for Transport

The Passenger Focus report is interesting. I look forward to meeting Passenger Focus and the Association of Train Operating Companies to discuss its contents.

I would not want the Conservative party to feel that I was letting it off the hook after the comments that I made about the Liberal Democrats. If the hon. Gentleman gets his way and eventually ends up on the Government Benches taking the decisions, he will have £840 million less to spend on the railways and on transport in general than has been spent by this Government. He and his party have to explain how they will manage to continue with investment in much-needed projects such as Crossrail at the same time as cutting the railway budget.

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