£13.20? You’re having a laugh!

In case my Martian readers are online today, I should describe the background state of affairs: the UK has not only screwed up its trains, the dental service has also been seriously dysfunctional since at least the 1990s.  The main problem tooth-wise is expense, since the NHS service we all pay our taxes for is chronically under-resourced – dentists aren’t paid enough for NHS patients, so have taken their drills to the private market. Nowadays, when a new dentist announces they’re taking on NHS patients, it’s like when fresh fruit arrived in the north of the Soviet Union.  People drop everything and queue.

Obviously, we’d all be better off without the NHS provision (not that I actually advocate this solution, I’m just making a point), now, since not only would our taxes be lower, the (lower end of the market) private prices are elevated by the fact that some people have managed to keep themselves on an NHS dentist’s list (though a significant number of people resort to the use of pliers for self-extraction).  Come to think of it, it’s a similar type of screw-up to the housing market, really.  I was removed by my previous dentist from his list in around 1998, for not going often enough!  I had a couple of extremely painful experiences at the next dentist I tried (on the second occasion she still hadn’t found the nerve after 5 local anaesthetic injections).  Once I found a good dentist, then, naturally, I stuck with him, even after I’d moved away from the area.  And, no, I’m not telling all and sundry who he is!

So this morning I rose bright and early (actually I could have had a lie in, because, as will become clear, it’s better to wait until the commuters have left the city), brushed, flossed, rinsed and made my way to Cambridge Station in good time to catch the 10:20 to London, the first train for which you can buy the cheapest tickets.  I stress that I arrived at the station in good time, since the queue for tickets at either machine or desk, was (as I’d expected) a good 5 minutes.  I mention this – it’s usual at Cambridge Station at many times of the week, with a minimum of a 5 minute waste of time to be expected on Saturday mornings and Friday afternoons, as well as, it seems, for the first cheap train of the day – because I’ve just had a look at the latest Passenger Focus report on value for money(!) on the UK’s trains.

Section 9, p.20 of the report suggests passengers should not have to queue for more than 3 minutes off-peak, 5 peak.  I can’t help noting that the peak/off-peak times make no sense for ticket sales, since most peak-time travellers are commuters with season tickets, so don’t need to buy a ticket.  Perhaps this explains what is evident at a glance from the Passenger Focus report, that the 3 minute off-peak target is achieved much less often than the 5 minute peak-time target.  The data looks a bit – how do I put it? – stupid.  I suggest they just have one target, 3 minutes.  And bring in some fines to make sure 3 minutes is actually achieved.  But what is also needed, it seems to me, is an edict that machines should be added to stations until there are no queues at them (as is the case in some European stations I know, den Haag Centraal, for instance).  Today, I used the multi-queue for the ticket desks at Cambridge Station (6 desks now, I acknowledge, in a rare, but insufficient improvement).  The point is, if you have to queue for a machine, you may wait for a long time behind someone having difficulty with the options (it’s not surprising that this happens, maybe some design of the screens is called for – just perhaps?), or the bloody thing may refuse your card.  And whatever you do, buy any complicated tickets from a real person at the counter!  The cost of the machines must be small compared to the value of the time passengers spend queuing.  And the marginal cost of each extra machine is even smaller – the cost to produce them is surely (like for other manufactures) mostly attributable to design, software, and tooling up for manufacture.  Queuing for machines!  They wouldn’t have believed you 50 years ago – it’s like a science fiction dystopia!  If there’s no queue, people will at least try to use a machine rather than what is the most expensive resource – the human ticket-seller.

Actually, I don’t think it’s cost that explains why there are uniformly too few machines in railway stations in the UK.  I’m beginning to wonder if it isn’t too difficult (or at least too much hassle) to deal with the inevitable consequence – a reduction in the number of ticket-counter staff – because of the militant RMT and other unions.

What I really wanted to write about (as I said before, you could write an essay about every train journey in the UK), though, is the exorbitant cost of the journey.  I used to buy One-day Travelcards – which include use of the tube and buses – when travelling to London, for the flexibility.  But, partly because of the new restriction that you cannot use the return portion of Off-peak (i.e. reasonably priced) tickets between 16:30 and 19:00 (though, unbelievably, if you buy a cheap ticket from London to Cambridge, you can use it at these times!), I now usually just buy returns to London, rush back rather than spend an hour or two in a museum or whatever, and use an Oyster card whilst there.

The last Off-peak Travelcard I bought from Cambridge to London (via King’s Cross) cost me £11.90.  But that was in 2008.  Today the price was £13.20, a 10.9% increase!  Frankly, this is getting ridiculous, as I’ll explain.

But first, let’s compare like with like.  Some years ago I wrote to Douglas Alexander, then Transport Secretary (there’ve been a few since then – does that tell you anything?), noting the rise in price of One-Day Off-peak Travelcards (with Network Card discount) from Cambridge to London.  I can now extend the series:

2003     £11.55

2004     £12.60     9.1% increase on previous year

2005     £13.85     9.9%

2006     £14.85     7.2%

2007     £15.20     2.4% (presumably lower because of the new afternoon restrictions)

2008     £15.85     4.3% (lulling us into a false sense of security)

2009     £17.50     10.4% (out of the blue – it’s a record!!)

Overall, in 6 years the ticket-price has risen by 51.5%!

In comparison, the ONS provides the latest RPI figure – 210.1 for January 2009.  It was 181.3 in January 2003 (I downloaded the table a while back).  That is, prices in general have only increased by 15.9%. The difference – 51.5% versus 15.9% – is, frankly, ridiculous.

That’s right.  Prices in general (RPI) have risen by 15.9%.  The train ticket I’ve relied on since I moved to Cambridge has gone up by 51.5%.  And the service has been seriously degraded by the introduction of the draconian restriction on when you can use the ticket to travel back to Cambridge – you have to return either too early to do anything in London in the afternoon, or too late to do anything in Cambridge in the evening (like eat at home at a normal time).

What really pisses me off, though, is that I think I know the reason for this injustice (besides RMT members’ belief that they have a God-given right to earn more than their work would merit in a different environment).  The point is that the franchise system in the UK works by awarding monopoly pricing power to the highest bidder.  The price to the franchisee in some regions is negative (i.e. some routes are subsidised), but for the franchise that includes Cambridge it is in the tens of millions of pounds per year (there’s no way to determine the value of the Cambridge route, and therein lies part of the problem).  The cost of the ticket therefore bears no relation to the cost of providing the service. This is a crime.  There is no mechanism – tragically, as there is even competition from Cambridge, you can travel a little more cheaply to Liverpool Street, though that happens to be usually way out of my way – for supply and demand to determine the correct price for the route.

The Passenger Focus report notes that the cost of tickets into London is higher than to other cities in the UK, yet there are more frequent services.  I found no real discussion of why this should be the case.  Have these people never heard of economies of scale?  If the market were functioning correctly (so that comparative prices reflect comparative costs), prices for travel into London would in all likelihood be considerably lower than to other cities.  Passengers in the busiest parts of the network are massively subsidising those in other areas.

The reason train travel into London is so expensive is, I suggest, because the market will stand it.  The train price reflects the cost (in money and time) of the alternatives.  Only the nobility can really afford to drive into London: you have to be stupidly brave, wealthy and have a lot of time on your hands.

The tragedy is, the rail network should be allowed to expand in the areas where a profit can be made.  There should be even more (e.g. fast, late night, early morning, every 15 minutes, not 30) services between Cambridge and London.  If parts of the network were allowed to grow, then, over time, the network as a whole would become more profitable.  The franchise system and consequent monopoly-pricing of rail tickets is one factor preventing the growth and modernisation of the UK railways.

As I said, it’s a crime.

I’ve skimmed through most of the latest Passenger Focus report.  There’s not a mention of the effect of the deeply flawed franchise system on ticket-pricing and hence value for money.  In fact, it reads like internal company market-research.  But of course, that’s what you’d expect from an organisation that appears to have no true independence from government.

Rather than sponsoring this flannel, the DfT should be getting its teeth into the task of making the rail franchise system work for passengers.