Virgin Trains: Fares (Hansard, 3 May 2001)

§ Lord Macdonald of Tradeston
My Lords, we made clear that we found the intention by Virgin Trains to increase rail fares regrettable. We asked the Strategic Rail Authority to meet Virgin Trains to express Ministers' concerns, which they did on 12th April.

§ Lord Hoyle
My Lords, in view of the increase in rail fares by Virgin Trains of almost 10 per cent, can my noble friend tell the House whether an assurance was received by him from Sir Richard Branson and Virgin that they would not continue to exercise a monopoly position on the West Coast Main Line or continue to increase fares well beyond inflation, thereby inflicting further suffering on customers on that line?

§ Lord Macdonald of Tradeston
My Lords, the Strategic Rail Authority expressed its disappointment at the magnitude of the proposed increases and its concern that that would not assist the drive to encourage passengers to use the railway. The Strategic Rail Authority and Virgin Trains agreed that more effort had to be put into communicating to passengers details of cheap fares so that they clearly understood the alternative offers available. Virgin will proceed with the proposed increases, which are permissible under the franchise agreement.

Lord Berkeley
My Lords, does my noble friend agree that as the Government are putting over £6 billion into the West Coast Main Line, on which Virgin Trains operate, that it would be reasonable for them to have some control over the fares paid by the taxpayer for using that line?

§ Lord Macdonald of Tradeston
My Lords, there are legally-binding contracts between the Strategic Rail Authority and the train operating companies which limit increases on regulated fares. The cap on such fares is RPI inflation minus 1 per cent. The 60 per cent of unregulated fares have not increased above inflation over the past three years. We have here an unfortunate example of a standard open return ticket which Virgin has increased by 70 per cent. To put that in perspective, on other regulated fares there has been a fall in real terms of 18 per cent over the period. The difference is contained in a market strategy.

§ Lord Bradshaw
My Lords, can the Minister explain to the House the factors which the Government would take into account, apart from the question of affordability, in deciding whether to extend the scope of fares regulation?

§ Lord Macdonald of Tradeston
My Lords, I am in the ironic position of being asked a question by a member 816 of the Strategic Rail Authority on whose advice would depend for the answer. I imagine that the Strategic Rail Authority will associate the need for a clearer outline of fare options with whatever new franchising proposals it is judging. No doubt future franchising agreements will reflect what success that has.

§ The Countess of Mar
My Lords, much of the income of Virgin Trains is derived from train fares paid by warrants through government departments. Many of those are for first-class tickets. I declare an interest in that the Lord Chancellor pays my train fare on a regular basis. Why have not the Government negotiated with Virgin for senior citizens such as me to charge to the Government the equivalent of a senior citizen's fare rather than the full fare? In my case the difference in fare is between £139 and £93. Overall, that is a substantial amount.

§ Lord Macdonald of Tradeston
My Lords. I shall certainly look further into that matter! There are concessionary rail cards for young persons, as well as senior citizens and the disabled, which are protected. There are others, such as the Network Card, of which the noble Baroness may be aware, which are offered on a voluntary basis. I shall certainly consider whether we can allow everyone the advantages which clearly the Lord Chancellor affords.

§ Lord Dubs
My Lords, can my noble friend confirm that Virgin Train fares are probably the highest in the world charged by any railway company; that the service must be one of the worst; that even if there are cheap fares on special offer it is virtually a lottery to try to discover whether they exist, when they exist and how to acquire them, and that the whole situation is a shambles?

§ Lord Macdonald of Tradeston
My Lords, the House will not be surprised to hear that it is virtually impossible to draw international comparisons of the cost of rail journeys. United Kingdom train operators offer a wide range of standard and discounted rail tickets. Discount tickets are not so widely available in other countries, where fares are typically based on a simple price-per-kilometre basis.
After Questions today, I have a meeting during which I look forward to hearing from the rail industry that 98 per cent of services are scheduled as normal and that 82 per cent of those are running punctually as against 86 per cent before Hatfield.