Scotland’s radical peak fares pilot: over and out?

The Scottish government has called time on its pilot scheme to abolish peak rail fares, but the calls for making public transport more accessible grow.

In this article:

• A year-long ScotRail trial scrapping peak fares saw a 6.8% rise in demand but failed financial viability tests.
• Critics claim the trial’s temporary nature hindered lasting behavioral change, despite offering commuters substantial savings during its run.
• Campaigners argue peak fares must be scrapped permanently for economic recovery, accessibility, and to meet climate goals.

Commuters have to pay attention these days - or they could be in for a nasty surprise.

In the first week of October 2024, the price of a peak-time commute between Glasgow and Edinburgh rose from £16.20 to £31.40 - a 94% increase.

That week marked the end of the year-long peak fares removal pilot on ScotRail. In the autumn of 2023, the Scottish government had announced that it was testing the water with a six-month trial that could result in the permanent scrapping of peak fares.

Rail unions, backed by transport and environmental campaigners, had originally proposed the measure, arguing that peak fares amounted to a “tax on workers” that would inhibit rail’s post-COVID recovery.

A year on (Scottish ministers had kicked the can down the line with two three-month extensions), the optimism of that original announcement had dissipated.

“The pilot will have been welcome in saving many passengers hundreds - and in some cases thousands - of pounds during the cost of living crisis, but this level of subsidy cannot continue in the current financial climate on that measure alone,” Transport Secretary Fiona Hyslop said in August, when announcing it would be scrapped.

Increased demand for rail as a result of the pilot was estimated at 6.8%. But Hyslop said this fell short of the 10% rise required for all-day off-peak fares to be self-financing.

However, if she thought that would be the end of the matter, she was guilty of wishful thinking.

In autumn 2024, the Scottish Parliament received a petition calling for peak fares to be permanently removed, at the initiative of the Scottish Trades Union Congress (STUC).

Hyslop’s local station was targeted in a leafleting flurry, with a QR code directing people to email her scanned thousands of times, according to campaign insiders.

But is there any realistic prospect of a permanent end to peak fares in Scotland - or a Scottish-style experiment taking place elsewhere?

That depends on a number of factors - including not just the financial resources that Hyslop bemoans are lacking, but also the political will for a railway dependent on greater subsidy.

Received wisdom in both the industry and politics is instead to get closer to the pre-COVID normal, when the fare box carried a greater share of the railway’s operating costs.

From the beginning, modal shift was to have been the key benchmark of the pilot’s success or otherwise.

Although this is still a rare incentive on the railway, it makes total sense in light of the Scottish government’s ambitious climate goals.

With 87.9% of Scotland’s energy now generated from low-carbon sources, and with the impending closure of Grangemouth oil refinery, transport is the biggest contributor to Scotland’s carbon emissions - and its share is growing.

Few infrastructure projects on Scotland’s railways receive approval unless they are in the name of “decarbonisation” - but this can only make a dent in the nation’s climate emissions if rail accounts for a greater share of journeys.

The pilot report released in August 2024 (a further report is expected, at an unspecified date, reviewing an additional three months of data) concluded that the project had been “somewhat successful in meeting the objectives of increasing awareness of rail and improving access, but has had minimal impacts on overall car travel”.

Where there had been modal shift, this had “tended to benefit those on higher incomes within the Central Belt”, which covers Glasgow, Edinburgh, and the surrounding towns and countryside.

There is no question that the lifting of all-day off-peak fares has hit many commuters hard.

Stewart Patrick, chief executive of Glasgow Chamber of Commerce, says it is “a concern for both businesses and commuters, particularly as we work to boost the city’s economic recovery”.

He points to the fact that large numbers of Glasgow’s workforce commutes from outside the city boundaries: “Increased travel costs could make it more difficult for businesses to attract and retain staff. Higher commuting expenses not only place additional financial burdens on employees, but could also exacerbate recruitment challenges, especially in key sectors such as retail and hospitality.”

That headline figure of a 6.8% increase in demand was not an actual increase in passenger journeys over the year, but rather an estimate of how many more journeys were made than would have been the case had lower fares not been in place.

Demand for rail was still recovering following the pandemic, so the increase in demand had to be considered on top of what growth was already anticipated. Transport Scotland worked on the basis that demand would have returned to 90% of pre-pandemic levels without the pilot - “as reflected across the rest of the UK”.

Severe weather events also had to be taken into account. Even if at the same level of severity as elsewhere in the UK, these are more disruptive in Scotland because no trains are allowed to run if a red weather warning is in place.

With so many variables involved, any estimate of the impact of the pilot can only be that - an estimate.

“There’s a lot of uncertainty around the estimate, which I think perhaps hasn’t been reflected in the more general reporting,” says Rachel Scarfe, lecturer in economics at the University of Stirling.

“It’s very difficult when you want to know the effect of a policy like this to calculate something that’s very precise.”

Assumptions made about the baseline are crucial, she says: “Changing that assumption by quite a small amount can actually change your final estimate [of increased demand as a result of the trial] by quite a large amount.”

One aspect where Scarfe has identified the potential for uncertainty is around weather events.

“The assumption that Transport Scotland made in the report is that weather would affect demand equally, whether you had the more expensive fares or the cheaper fares,” she explains.

“Again, the final estimate will be sensitive to that. And that’s another assumption that you have to make.”

When Hyslop announced in August 2024 that the pilot would not be made permanent, opposition politicians focused on the positives of a 6.8% increase in demand.

This represents around four million extra rail journeys over nine months, of which two million were journeys that would have been made by car had it not been for the trial.

Transport Scotland rather dismissed this in its report, noting: “This is in the context of around five billion annual private car journeys in Scotland, and represents a reduction of less than 0.1% of car-based carbon emissions.”

But there are still remaining questions on whether the pilot - both in its core offer and its temporary nature - was sufficient to encourage modal shift.

Other countries have secured significant modal shift through cheaper ticketing.

In Germany, the DeutschlandTicket offering unlimited local and regional bus and rail travel increased the number of rail journeys of more than 30km (18.6 miles) by 30.4%, according to the Mercator Research Institute on Global Commons and Climate Change.

But this was for a fee of €49 (£41 - later increased to €58, £48), for a ticket announced as a permanent measure (and during this ticket’s pilot, the price was just €9 a month).

Even at the higher rates, the DeutschlandTicket is potentially significantly cheaper (to the consumer) than ScotRail’s abolition of peak fares. It was also structured in a way that encourages greater use.

The peak fares removal pilot, on the other hand, encouraged existing fare-payers to travel at peak times and cheapened the cost of commuting, but arguably did little to incentivise additional journeys. (It did, however, have the benefit of not requiring a large up-front cost).

It also did not give commuters the security of knowing they could travel cheaper on a permanent basis.

“It’s quite hard to make people make a modal shift,” says Scarfe.

“So, either you have to do something really dramatic in terms of price, which is going to require a bigger subsidy… or you have to do things for quite a long time, to give people time to make that shift.”

In the Scottish Trades Union Congress petition calling for permanent all-day off-peak fares, STUC’s just transition campaigner Tam Wilson says: “The short-term nature of the trial was insufficient to create lasting behavioural change or fully address the potential benefits of long-term fares reform.”

Michael Solomon Williams, from the Campaign for Better Transport, agrees: “The trial was not given enough of a chance to yield meaningful results, and should have been run for two years, as with LNER’s current single-leg pricing trial.”

But crucially, although modal shift was always front and centre of the communications relating to the pilot, it was tempered by a counter-metric of cost.

And it was this that sounded its death knell. In its response to the petition, Transport Scotland states: “The current fiscal climate makes the proposal to permanently remove peak fares untenable,” adding that it would require a “significant increase in subsidy” that “simply cannot be justified at this time”.

How long that argument can be sustained is another matter. The UK government’s Budget - with its significant increase of ‘Barnett consequentials’ allocated to Scotland, in line with the funding formula for devolved government - has also mounted pressure on Scottish ministers to reconsider.

“With almost £5 billion extra in resource spending by next year, [Scottish] government ministers have delayed the scrapping of peak fares for far too long,” says STUC Assistant General Secretary Dave Moxham.

“Making public transport affordable and accessible is good for workers, the planet, and our economy. The Scottish government must look again at their inexplicable decision to reinstate peak fares and, with speed, scrap them once and for all.”

Although the current Scottish Parliament term runs until May 2026, the SNP lacks a majority at Holyrood. That allows other parties to influence the Budget process, and to make policy demands in return for support.

The Greens have said they would include peak fares on their wishlist, with Green MSP Maggie Chapman declaring: “If we are to reduce pollution and encourage people to leave their cars at home, then we badly need to cut the cost of public transport.”

Labour, meanwhile, has condemned the reinstatement of peak fares as “environmentally and economically illiterate”, although it has stopped short of saying it would abolish them again if it wins the next Holyrood election.

And if the SNP cannot find a supporter for its Budget, that could take place early. “Affordable rail fares are the key to getting people back onto trains and ending the spiral of decline facing ScotRail,” says Scottish Labour’s transport spokesperson Claire Baker.

Her Scottish Conservative transport conterpart Sue Webber says: “We remain committed to scrapping peak rail fares in order to ease the burden on hard-pressed passengers.”

While the pilot was ultimately a politically directed project, ScotRail was key to its implementation - and board members were given regular updates on its progress.

These documents, released to RailReview under Freedom of Information laws, offer some additional insights into how the project was considered at the top level.

“After trending above £1 million per day, [ScotRail’s] revenue dropped below this benchmark at the start of the trial but has recently achieved the £1m per day level again,” ScotRail Chair David Lowrie told the Scottish Rail Holdings board in June 2024.

This highlights that the measurement of impact can be influenced by more symbolic metrics (in this case the £1m milestone) as well as scientific ones.

A briefing to the board in March also includes a promise that the impact of the trial on Scotland’s wider economy would be measured, too - but Transport Scotland’s report does not include this.

ScotRail’s step back from abolishing peak fares altogether is likely to slow down experimentation elsewhere.

But there is no denying that travel patterns have changed for good across Britain’s railways - and demands for a fares system that reflects that are likely to percolate in the coming years. The pressure will surely reach boiling point as Great British Railways takes over the running of English and cross-border operators.

“We understand peak and off-peak pricing can cause challenges on many long-distance journeys, which is why we are trialling alternatives on a number of different routes - including anytime fares and flexible ticketing,” a Department for Transport spokesman says, in response to the lessons being learned from the Scottish experiment.

The Welsh government says it is making fares fairer through a new “distance-based pricing system”, including automatic daily and weekly capping, while London Mayor Sadiq Khan cites his five-year fares freeze.

The DfT, meanwhile, points to the current suspension of off-peak fares on LNER, which (suffice to say) has been significantly less popular than scrapping peak fares.

Which brings us to a point made by Transport Scotland in its response to the petition: that the peak fare is in fact the “full price” for a journey, “with off-peak providing a discount… to encourage passengers to travel at quieter times”.

However, with fares (especially at peak times) having risen to such an extent, many passengers no longer see it that way.

“Our research has shown that peak fares vary widely across routes, with some commuters paying 5% more to travel on a peak train, while others face a 130% premium on the cost of the equivalent off-peak ticket,” says CBT’s Michael Solomon Williams.

“Many people, particularly those most in need, do not have the luxury of choosing when to travel, so this raises questions about who is benefiting from peak fares.

“Action is needed to help passengers cope with the ever-escalating cost of rail travel, and a full root and branch reform of the fares system is needed as a matter of urgency.”

And as climate change becomes more urgent, so a high level of state subsidy for the railway (at least initially) is likely to attract more mainstream support.

“Bringing down fares is a win-win-win of a positive climate policy that will be widely supported, improve people’s lives, and bring down emissions,” says Imogen Dow of Friends of the Earth Scotland.

“Peak fares should be scrapped again, and this time for good.”