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Taken for a ride

The Times: November 30, 2005
Leading Article

The rail companies should not price themselves out of public favour

Little infuriates consumers more than deception. The old trick of attracting sales with bogus prizes, fraudulent offers and non-existent bargains has long been outlawed, as have most sharp commercial practices. It is disappointing, therefore, to see these things returning at Christmas — and not in unregulated flea markets but on the main lines of Britain’s rail network. For the mysterious shortage of cheap fares over the holiday period and the attempt by train operators to make passengers pay premium rates smacks of old-fashioned consumer gouging.

Nothing has been announced. There has been no warning that the quota of discounted tickets has been reduced. Instead, rail companies maintain the fiction that the cheapest are still on offer, but tell those calling, even within days of booking lines opening, that all seats have gone. For 11 months of the year tickets from London to York can be bought in advance for £9.50; on the few days when families, rather than businessmen, think of taking a train to visit distant relations, they find that the cheapest fares after 8.00 am start at £39.50.

Rail companies, muttering about “commercial secrecy”, shy away from admitting that they are cashing in on their busiest few days in the year. They speak of “dynamic pricing” and point to airlines as an example of fares that vary according to demand. No one, they argue, complains when air fares go up at peak periods. But there is a crucial difference. The airlines receive no public subsidy. The railways, by contrast, are receiving £6.5 billion of public money this year — more than three times the highest subsidy ever given to British Rail and the equivalent of more than £6 per passenger. Airlines are purely commercial undertakings, and competition gives travellers the chance to shop around. Rail, even after privatisation, is still a public service, and most travellers are served by a monopoly provider.

This dickering with the normal fare structure is not only dishonest; it is commercially short-sighted. Rail accounts for only a very small percentage of private leisure travel. Train companies, like the Government, are eager to get people out of cars and on to the railways. But already they have introduced a myriad of promotional fares that is far too complex. Many people are confused and become suspicious that they have been deceived into paying more than they need have done. For most of the year rail operators spend heavily on marketing rail travel, with advertising campaigns urging passengers to take advantage of special offers by booking online and booking early. To change the rules over the Christmas period — while hiding behind bureaucratic vagueness — not only annoys the very people the railways need to woo back on to trains, it also gives the impression that a public service is taking the public for a ride.

Rail travel is now at levels not seen for 50 years. There is little spare capacity to lay on extra trains. But operators who ration demand by high prices may find after the holiday that those who could not afford the seats available do not try booking a second time.