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Record Rail Fares Show Why We Need Public Ownership

This week’s rail fare increase is the highest in almost a decade. With fares rising at twice the level of wages since 2010, there’s only one solution – a return to public ownership.

Credit: Chris Jongkind / Getty

This week’s rail fare increase is the highest in almost a decade, with ticket prices going up by as much as 3.8% and the cost of the average season ticket rising to an eye-watering £3,300. These are only the latest in a series of punishing price hikes, with fares rising at twice the rate of wages since 2010. This, of course, is against a backdrop of falling real wages, tax rises and soaring energy bills that are deepening a cost of living crisis facing working people.

In the past year, poor reliability and reduced services plagued Britain’s railways. But at the same time that fares are being hiked, rail funding is being slashed with operators being told to cut costs by 10% over the next year. As a result, services have disappeared and rail companies have made clear that timetables won’t return to pre-pandemic levels. In short, passengers will be paying significantly more for significantly less.

The Covid-19 pandemic forced the government to provide unprecedented financial support for rail, as well as taking greater control over fares and operations in order to prevent the collapse of a vital public service. But while emergency support was necessary, a far greater opportunity for change on the railway was squandered. With diminished funding and increased fares, it’s clear that the damage caused to services by the pandemic and repeated lockdowns is likely to become permanent.

Making Passengers Pay

The number of people using rail services is still significantly lower than it was before the pandemic, with demand at around one third of pre-lockdown levels. This toxic combination of higher fares and lesser services will only discourage yet more passengers from returning. This threatens the sustainability of not just the railway, but of Britain’s climate goals: the need to cut car mileage by at least 20% by 2030 to align with the goals of the Paris Agreement won’t be met without a significant growth in rail usage.

The government’s plan is to ‘recoup’ money spent during the pandemic, and it cites the financial support provided over the past two years as justification for this week’s fare rises. Withdrawing funding for a public service with such demonstrable social, economic and environmental value as rail is wrongheaded at any time but especially so when the sector is struggling to recover from the pandemic. But it is in line with the Conservative Party’s long-term ideological commitment to make passengers foot more of the bill for rail travel, which has seen fares rise to almost 50% more than they were in 2010. 

Current rail policy is clearly damaging to passengers, the economy, and our environment, as well as to the future of the railway itself. Attempts to claw back money by forcing passengers to pay more is made all the more unjust by the continuation of rail privatisation – a system which fills the coffers of private shareholders at the expense of passengers. The alternative to this is both obvious and popular: taking the rail back into public hands.

Cost of Privatisation

Before the pandemic, it was estimated that a minimum of £725 million leaked out of the railway every year to fill the pockets of shareholders. This profit leakage occurs in many places, from train operation to Network Rail subcontractors to renting trains at exorbitant prices. 

Privatisation also facilitates another truly absurd situation. Subsidiaries of other countries’ publicly-owned rail companies from Germany, France, Italy and the Netherlands export profits which they make in Britain for the benefit of their own railways, a process which helps to keep fares down back home. This is an example of the contrast between a government policy which places the public interest first and one that is ideologically wedded to privatisation.

In Britain, this process of privatisation created a disjointed and inefficient railway over which no single body really has control. It is the opposite of what might be called rationalisation. Hundreds of millions of pounds are lost through inefficiencies where the parts of the fragmented railway interact. Meanwhile, reforms that would benefit passengers and drive growth – such as the simplification of fares, the introduction of London-style ticketing across the country and integrating rail with other forms of public transport – are ruled out.

A Failed Model

That rail privatisation has failed even on its own terms has become clear to those across the political spectrum. Transport Secretary Grant Shapp’s plan for a ‘Great British Railway’ is a good example of this. It was proposed last year as an effort to provide greater public regulation of rail, but was in reality an attempt to save face without dealing with the underlying issue. 

The scheme was trumpeted by Prime Minister Boris Johnson as a strategy to ‘deliver a rail system the country can be proud of.’ However, the policies set out by the government this week (and over recent months) look set to render the plan little more than a PR exercise where a new logo will be placed on top of a system in decline.

Alongside a nationalised railway, owned and run in the public interest, and serious levels of investment, what passengers need – and need now – is a fares freeze. After more than a decade of fare rises above inflation and wage growth, it is only right to demand that fares are frozen. The railway needs this too as it attempts to recover from the pandemic and grow. 

But as in so many other aspects of this cost of living crisis, a fares freeze is the opposite of what we will see. Time and time again, as our economy emerges from the pandemic, political decisions have been made to force the public to carry the costs while wealthy, private interests continue to profit. This is the story of our rail system as much as our energy one.

The lack of political ambition to deliver a railway that passengers need and deserve is a huge cost to our society, economy and environment. But with even the Labour Party unwilling to fight for public ownership, a better alternative will only come about if we organise for it ourselves.