Thank you for contacting me about rail fares, the future of the railways and Eurostar.
Currently, some fares are regulated by the Government, which controls their price, while others are not, as train operators are free to set them on a commercial basis. Around 45 per cent of rail fares are ‘regulated', with increases directly influenced by Government policy. This includes season tickets on most commuter journeys, some Off-Peak return tickets on long distance journeys and Anytime tickets around major cities.
Train fare revenue is crucial to funding day-to-day railway operations and rail investment, which benefits passengers. For instance, rail operators have been investing in more trains, better stations and faster journeys. Any rise in rail fares helps to allow this to be maintained.
Nevertheless, I appreciate that fare prices may be of concern to some people and that is why the Government has frozen increases in regulated rail fares in real terms for the past seven years. Whilst there is currently some press speculation around rail fare increases for 2022, I understand the Government has not yet made a decision on ticket price increases. Indeed, the Department for Transport is currently considering a range of options as part of a "rail recovery" package aimed at getting passengers back on the network.
I welcome that the Government also recently proposed the biggest change to the railways in 25 years, bringing the network under single national leadership. A new public body, Great British Railways, will own the infrastructure, receive the fare revenue, run and plan the network and set most fares and timetables. Reforms will also include a simplified ticketing system, including the rollout of new flexible season tickets to reflect new working and travel patterns, as well as making significant roll-outs of pay as you go, contactless ticketing and digital ticketing on smartphones.
In the meantime, it may also be useful to know that there is already a number of concessionary travel schemes available – in particular, two new railcards for young people are on sale and the Government has just brought in a Veterans’ railcard. More details on these can be found at the following link:
Since privatisation of the railways, demand for rail travel in the UK has grown hugely, and more rapidly than on other major rail networks in Europe. Indeed, pre-COVID-19 figures showed rail demand more than doubling since privatisation in 1994/5, with a record 1.8 billion rail journeys undertaken in 2018/19. Before the coronavirus pandemic, there were more trains running than at any time in the history of the railways.
Privatisation has also resulted in billions of pounds of private sector investment in the network. A net total of £1.1 billion was invested by private companies during 2018/19, including £112 million invested in stations.
There is no doubt, however, that the increased popularity of rail travel has brought about a number of challenges. The network is one of the most congested in Europe. In addition, while passenger satisfaction in the railways has substantially improved since 1999, and is among the highest in Europe, satisfaction for 2018 dropped to a ten-year low owing to performance issues.
I am assured that Ministers are alive to these challenges and have confidence that they are determined to deliver genuine, lasting reforms to improve the experience for passengers, and to secure the continued success of privatisation.
Indeed, in 2018 Ministers commissioned the Williams Rail Review, tasked with recommending ambitious reforms to bring about better customer service, more reliability, greater accountability and innovation.
The Williams Rail Review was in the final stages of drafting at the outbreak of COVID-19, and while I know my Ministerial colleagues remain as committed as ever to delivering wholescale reform of the rail industry, understandably further work now needs to be done to reflect the impact of COVID-19 on the sector. I understand that this work is progressing.
It remains the case that the Government is committed to delivering the biggest investment in the railways since Victorian times, with investment between 2019 and 2024 expected to be £47.9 billion.
In recent years key hubs such as Birmingham New Street and Manchester Victoria have been rebuilt, while commuter routes have and will continue to expand through projects like the Thameslink programme, the East-West Rail vision and the Great North Rail Project.
Connecting smaller towns is also important. I am pleased that the Government has committed £500 million to start reopening lines closed following the Beeching report, reconnecting smaller towns, regenerating local economies and improving accessibility to jobs, homes and education.
New trains are also being rolled across the network on both intercity and commuter routes, for example the new Azuma trains on the East Coast Main Line and new trains on Greater Anglia and on West Midlands Trains. These new trains will modernise travel, with more comfortable seats, improved accessibility, free WiFi as standard, power sockets and air-conditioning.
An £80 million investment has also seen smart card and bar code ticketing become available across almost the entire network, and the Government’s ambition is to see pay-as-you-go rolled out across more regional and urban commuter areas, delivering the kind of system that already exists in London.
In addition, targeted investments are being made to help reduce delays and make more effective use of the network. For example, £450 million has been committed to increase the use of digital technology for managing the railway.
I appreciate that the international rail sector, with other international travel sectors, has faced significant challenges during the coronavirus pandemic, as passenger demand has declined substantially.
I therefore welcome that ministers and officials, have been in regular contact with Eurostar since March 2020 in relation to its financial situation. The Department of Transport continues to work closely with Eurostar to consider all commercial financing options available to the company, which include drawing on existing support schemes where eligible and appropriate.
I understand that Eurostar has reached a refinancing agreement with its shareholders and banks, and has secured a £250m rescue package to begin its recovery, as restrictions ease and travel begins to gradually resume.
I understand the department will continue to discuss Eurostar’s financial situation with the French Government, and both Governments recognise that Eurostar’s services bring significant economic benefits for both the UK and France. I trust that ministers will also continue to closely monitor the financial impact of Covid-19 on Eurostar and the international transport sector more broadly.
Thank you again for taking the time to contact me.
Craig Whittaker MP