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Thursday, 19 August 2010

Increased Fares Means Increased Transport Poverty

While tackling the deficit, the coalition government has also wedded itself to the idea of decreasing the divide between rich and poor and increasing social mobility. Yesterday, on the 100 day anniversary of the coalition partnership, Nick Clegg said, "Our determination to fix the deficit is matched by our determination to create a more socially mobile society." Yet, the government still aspires to do this on the backdrop of savage cuts in every area from health to defence. While I am sure that they understand the inherent contradiction in trying to improve the lives of Britain’s poorest, while at the same time cutting their benefits and employment opportunities, I don’t think, with the level of cuts proposed, it can be done.

I am not alone though and the coalition’s proposed policies have been frequently attacked from the left, right and all those in between. There is an increasing body of comment and detailed statistical analysis in the blogosphere and elsewhere, that shows that if anything the proposed cuts will only serve to increase divisions in Britain between rich and poor. Kevin Meagher at Left Foot Forward recently quoted Danny Dorling, professor of Human Geography at Sheffield University, as saying that “Britain is a country pulling itself apart” along a North-South rich-poor divide (To be found HERE)Meagher went on to argue that the removal of Regional Development Agencies and their replacement with Local Economic Partnerships, will only exacerbate this divide as the latter will not have the scope because of their smaller sze to make an impact on the national economic imbalance. Indeed, he again quotes Dorling as saying that “The recession is exacerbating those [existing] differences and I suspect the dividing line will also move southwards as the government’s cuts take effect.”

Additionally, the TUC released yesterday a list that showed that cuts in education, health, housing, welfare and social care have the greatest impact on the poorest in our society. The 100 cuts that they can be found HERE. Furthermore, cuts in government run organisations and local authorities will disproportionately affect people above the north-south divide, as in these regions government is the largest employer. Therefore, the result is that the inevitable redundancies may lower many individual’s and family’s standards of living, and may even force them into poverty. These two examples are simply a small portion of the attacks on the government’s claims of fairness. Overall, my assessment is that the coalition government cannot really talk about ‘fairness’ and ‘social mobility’ when it is demonstrably true that their policies so far will only serve to breed inequality.

So what does this have to do with the railways? I have always been an advocate of the idea that there is a concept of ‘transport poverty,’ a divide between richer and poorer travellers. Many people are simply priced out of rail travel, and choose to make their journeys solely by car, because of their financial positions. This, therefore, has the obvious negative effects on the environment and the congestion on the roads, but it also disproportionately affects the poorest in our society. It was for this reason that I was pleased to see that in the Lib Dem manifesto there was a commitment to lowing fares. This was, however, watered down in the coalition agreement to simply a promise of ‘fair rail pricing.’ While less direct than the original Lib Dem manifesto, I originally thought, in the context of my own beliefs of course, that ‘fair’ meant exactly what it said on the tin; reasonable prices for all, which would subsequently increase accessibility to the rail network.

We have since learnt from the Secretary of State for Transport, Philip Hammond, that ‘fair’ is a word that can be twisted to mean whatever you want it to do. At the House of Commons select committee on Transport, in response to the question ‘You are committed to fair pricing. Fair to whom?,’ he stated ‘I think there are two aspects on this. First of all, there is the question of overall fairness policy on the railway and ensuring that any increases in fares can be justified in terms of improvements in the service that passengers receive. [....] It is not just about fares; it is about value for money for passengers. [...] It is about making sure that [passengers] are given proper information about the most advantageous fare available to them, that the information that is published is clear so that passengers can get the best deal that is possible within any given framework of any given fare structure.’ So basically, the coalition meant that prices would be ‘fair’ within the existing pricing framework. But then again, prices are not ‘fair’ if large numbers of people won’t use the railways because of the pricing structure, if the prices are some of the highest in Europe (in some places 60% higher) and if rail travel is therefore reserved for the better off half off society.

But rail prices, I suspect, are about to become more unfair. In years past the Train Operating Companies (TOC) have been allowed to raise ticket prices by the retail Price Index (now at 4.8%) plus 1%, a total of 5.8% this year. But it has been reported this week (To be found HERE) that in an attempt to reduce the £5 billion annual subsidy the Department for Transport (DfT) gives to the TOC’s, it may be ready to break this rule and allow the companies to increase the ticket prices by up to a possible 10%.

I think that this is a severe mistake for a number of reasons. If prices did rise by this much, a greater proportion of the population would be priced out of using rail travel. This would put greater pressure on the road and motorway network, increasing congestion on both long-distance and suburban routes. With increased car journeys being made this would, of course, be detrimental to the environment. The other possible implication could be that individuals would be more inclined to search for work in their locale, rather than further afield, because they would be unwilling to pay the higher train fares on long-distance journeys. Thus, this would also affect their economic situation. Lastly, it would increase the hardship on people who cannot, or do not, drive for whatever reason and who have no option to use the railways for work or leisure.

But, I do feel strongly that there are other ways to keep the level of the subsidy to the TOCs constant, while at the same time maintaining (or reducing) current fare levels. It is no secret that Network Rail, one of the biggest draws on the Department for Transport’s finances, is terribly managed. Figures put the cost of maintaining Britain’s railway infrastructure at 30-50% above continental networks. Yet if the management was improved, efficiencies made and the organisation was streamlined, then some of that saved money could be used to keep the cost of fares down and keep the subsidy at the current level. This would increase access to rail transportation and reduce ‘transport poverty.’

Given the Government's track record on fairness so far, I’m afraid all I can foresee is that the fares will go up as reported. However, this will only serve to increase the numbers of people who won’t pay the extortionately high price of railway travel, increasing the ‘transport poverty’ divide.

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