The first steps on the path to fares reform?

Change is coming to the system of fares and ticketing on Britain’s railways.

But just like those tickets allowing “any permitted route”, while the final destination might seem set, how will we get there and how long will it take?

Well, that depends. The Great British Railways Transition Team (GBRTT) is keen to get things under way.

“Progress can be made while it (the bill) works its way through the political system,” says GBRTT Programme Director for Fares, Ticketing and Reform Stewart Fox-Mills.

“I think we just have to look forward to try and get the task done as quickly as possible, because it’s going to make a huge difference to the railway.”

Fox-Mills sees himself and GBRTT as a facilitator of the change, although ultimate responsibility for Britain’s Railways will still lie with the Transport Secretary.

And that means the real power, as always in Whitehall, lies with HM Treasury, which has its own reasons for seeking change.

“There’s a challenge for recovering rail revenue, and we operate at quite a significant subsidy from government at the moment,” he says.

“But what we’re identifying is that there’s great opportunity by simplifying things and, where available, passing on value - particularly where there are available seats and smoothing demand, and that has considerable revenue opportunity.”

LNER leads the way on simpler ticketing

First out of the blocks has been LNER.

It had already scrapped return tickets and introduced single-leg pricing.

But that was only to pave the way for even bigger changes at the start of February.

Under the banner of ‘simpler fares’, LNER did away with Off-Peak and Super Off-Peak tickets on trains from King’s Cross to Newcastle, Berwick-upon-Tweed and Edinburgh.

In their place came the ‘70min flex’, a ticket allowing passengers to travel 70 minutes either side of the service for which they had booked.

Together with advance and anytime fares, that means there are now just three types of ticket per class, compared with a total of 11 before, and 23 prior to the introduction of single-leg ticketing.

This has been no overnight change, according to LNER Commercial Director David Flesher.

“What we’ve been working on, for five years or so, has probably been in the making for over 30 years. It’s tackling the complexity, the confusion - those barriers that customers have told us for a long time is what stops them using rail.”

“It comes down to things such as overcrowding, complexity, flexibility, and value for money, so our fares reform programme is really about trying to tackle those problem statements,” adds Senior Programme Manager Paul Smith.

“If we can make headway against those, we can make rail a more attractive proposition. And we’ve had to do this in a way that isn’t only fit for LNER, but has the possibility to be transferable, at least to other long-distance UK rail.”

Rail Delivery Group CEO Jacqueline Starr describes what is happening as “steps in the right direction”, adding: “We need to see the outcome of those trials, to move forward with further implementation, so that over time there’ll be a more logical fares structure and one that’s easier for people to navigate.”

LNER says the trial has got rid of off-peak fares after their use had dwindled over the last 20 years, falling from around 50% to 10% of sales as customers switched to travelling on advance tickets.

Nevertheless, says Flesher, this “was always going to be a little bit more impactful and drive more debate”.

That could be seen as an understatement.

North of the border

The SNP, which has embarked on its own fares reform, scrapping all peak-time tickets and making ScotRail “4% busier” while shifting demand across the day, has been among the critics.

In February, Owen Thompson, the SNP’s Chief Whip at Westminster, attacked the changes, saying: “LNER has pushed up prices for thousands of tickets, in some cases costing passengers going to and from Scotland hundreds of pounds extra.”

In response, Flesher says: “The noise we’ve heard around simpler fares is around price and increasing price - and that’s not our objective.”

Smith adds: “More than half of customers who have bought this product have actually paid less than the old Super Off-Peak fare and have got flexibility for cheaper than ever before. We feel quite confident we’ve made the right decision, but the proof will be in the pudding. And that’s why it’s a pilot.”

Five weeks after the new flex tickets had gone on sale, and less than three weeks after the scrapping of off-peak fares, LNER was saying it was too early to draw any conclusions.

But it has been encouraged by their take-up.

“We’ve seen over 5,000 sales of that product on those three flows already, so that’s encouraging,” says Smith.

“But we are also identifying how intrinsically linked fares and retail are. On those platforms where we are optimising the simplicity of the fares to the customer, they are outperforming those spaces where they have not adjusted to the new structure as well.”

Put simply, sales were going well on LNER’s own website, but lagging on those operated by third parties.

Meeting the needs of the leisure market

The company believes having single-leg fares allows customers to mix and match - for example, buying an advance ticket for an outbound journey and a semi-flex ticket for the return.

Flesher believes that while this might be useful for the business traveller, worried that a meeting could over run, it will have an even bigger impact on the leisure market where travellers might fear a football match going into extra time, want to have one more drink with friends, or worry how long it will take getting children back to the station.

“All that has put them off in the past, thinking that they’d end up getting charged an extra amount. You just don’t want them to take that away as an abiding memory of rail,” he adds.

While the change might be rolled out in future to other long-distance operators, the problem for now is that even if it has reduced the types of ticket available for LNER, the travelling public may not make the distinction between operators. Instead, they see it as yet another fare to add to an already confusing, long list of ticket types.

Mark Smith, the man behind the seat61 train travel site, sums up the plethora of fares simply.

“It’s a complete mess. Fares need to be understood to restore trust and confidence, and also to be simple enough for today’s self-service channels - website, ticket machines and apps.”

The problem with LNER’s plan, as he sees it, is that it has been designed around the operator and not passengers: “What they’ve done is make inter-city rail mere transportation as opposed to providing mobility.”

People making shorter journeys want flexibility, while those taking longer trips are more prepared to build their plans around the cost of the journey, he says.

“If you go with LNER’s structure - which is basically any time, semi-flexible, advance - that isn’t going to work on the medium distance, say Peterborough or Stevenage to London, where people pop into London and need flexibility.

Even the industry does not claim the East Coast trial is a one size fits all.

West Midlands and North West

In the West Midlands and North West, operators are looking at pay-as-you-go on urban routes.

Around London, too, Transport for London is expanding the reach of its own tap-in and tap-out technology - not only east and west beyond Greater London via the Elizabeth line, but also south down to Gatwick Airport.

“I remember in the old days at Gatwick,” says Deputy Mayor for Transport Seb Dance. “You would get off the plane, get to the ticket machine, and be presented with three different train operating companies and three different fares policies.

“For a ticket to London you’d have about 16 different options, and they were completely different prices.

“I just remember standing staring at the screen, along with hundreds of other people, taking forever to try and choose the right ticket and not having a clue.

“Now, of course, you just tap-in and you tap-out and are charged a peak or an off-peak fare. And it doesn’t matter what train company you use.”

This does away with the ‘soft barrier’ to people using the railway. It’s a very different scheme to LNER’s, but once again it aims to make things simpler.

Andy Bagnall, chief executive of Rail Partners, which represents private sector train operators, says we are reaching the point of no return on single-leg ticketing, with the extensions of pay-as you-go around London alongside the Birmingham and Manchester trials.

All combined, he says: “You’re getting towards 500 stations operating this way. What pay-as-you-go and that [LNER] approach have in common is single-leg pricing at the root of them.

“People want to tap-in and tap-out on shorter journeys, and they want single-leg pricing on longer journeys in a way that spreads demand more efficiently. 

“We are not there yet.

"But we are reaching a point where enough components of the system have been unbundled that it will complete the delivery of pay-as-you-go in urban areas and single-leg pricing on all long-distance routes. At first it will create more anomalies, more inconsistencies, but will soon make it the inevitable thing to do.

“Without consciously creating a Big Bang moment, it will become clear that enough of these schemes together will add up to fares reform. We will reach a point where the only sensible thing to do is roll it out everywhere.” 

But it would be wrong to think this is a sign of different parts of the rail industry moving in lock-step.

London's fare freeze

Far from it - while single-leg fares at LNER were always designed to be revenue-neutral, the mayor in London (like the government at Holyrood) is putting more public money into the system.

In London, the result will be fares freeze. In Scotland, for many it will be a reduction.

Deputy Mayor for Transport Seb Dance makes no bones about it - the decision is political. But that does not mean it is aimed at encouraging people to vote for his boss in an election year. As in Scotland, the politics is about getting more people onto public transport.

“It didn’t make sense for the additional burden for that policy to come onto fare payers, so that’s why we took the decision to use GLA budget,” he says.

All this comes at a time of change outside operators’ control, with alterations in passenger flows which accelerated under COVID.

“It’s imperative that we offer people new, more flexible options to reflect their changed travel patterns,” says RDG’s Starr.

Dance adds: “We’re looking at the Friday peak fare at the moment, and running a trial to determine what the impact of having all-day off-peak fares on a Friday will be. We also want to look at the pattern of travel and work with partners in the leisure industry and business to see what impact it has, if any.”

LNER’s Smith notes: “Fares reform is not something that is going to happen overnight.”

GBRTT’s Stewart Fox-Mills agrees.

He says other trials beyond the East Coast one are “not imminent” but are under discussion. And the plan is not to limit the experimentation to the train operators.

“We want as much innovation as we can get. If you’re buying another customer experience, can rail be integrated into that?

“One of my favourite examples is if (say) you’re going to the Reading Festival. Why can’t you just buy your rail travel at the same time? It probably helps the festival out by having less cars turning up. It’s a good thing for the customer and a good thing for the railway.”