Uncharted Territory

September 16, 2011

Off the Buses in Ealing

I reported yesterday that TfL is planning to increase fares on average by RPI+2 each year until 2018, and Travelcard prices by RPI+3 over the same period, the supposed justification being that rail fares are to rise by RPI+3. I briefly discussed the implications of this discrepancy, but had a subsequent conversation which led me to consider a different case.

I don’t know about you, but I always feel short-changed if I buy a season pass for a transport network and then find I’d have been better off paying for each journey individually. How likely is this to happen for someone living in Ealing, but working in central London a) now and b) in 2018?

Case 1: A morning and evening peak commuter
This individual uses the tube during the morning and evening peak and sometimes catches a bus back from the station.

In the following table I’ve ignored inflation and just increased costs by 2 or 3% p.a. So in today’s prices a zone 1-3 Travelcard will cost £41.55 in 2018, compared to £34.80 in 2012.

Year   Travelcard cost       Less 10 peak tube fares      Bus fare cost         No. bus fares to break even
2012         34.80                     34.80 – 10*3.10 = 3.80         1.40                             3.80/1.40 = 2.71
2018         41.55                     41.55 – 10*3.49 = 6.64         1.58                             6.64/1.58 = 4.21

So whereas in 2012 our peak commuter would only have to catch the bus 3 times in 2012 to avoid feeling cheated on a weekly Travelcard, he’ll have to catch it 5 times in 2018. If, like me, he walks to and from the station most of the time, he’ll be in a bit of a dilemma by 2018 as to whether or not to buy a weekly Travelcard.

Case 2: A morning peak and evening peak/off-peak commuter
It gets even worse in the case I actually discussed yesterday. The evening peak is from 16:00 to 19:00, so many people working in London may not actually travel home until off-peak fares apply. If this happens 3 times in a week, then the calculation changes somewhat:

Year  Travelcard cost     Less 7 peak, 3 off-peak tube fares     Bus fare cost   No. bus fares to break even
2012        34.80               34.80 – (7*3.10 + 3*2.60) = 5.30              1.40                     5.30/1.40 = 3.79
2018        41.55               41.55 – (7*3.49 + 3*2.93) = 8.33              1.58                     8.33/1.58 = 5.28

By 2018 this commuter will need to use the Travelcard on more than one bus each work-day (or for leisure journeys) to justify the expenditure.

Personally I feel the Travelcard should be a better deal. In London, it seems, regular tube users are likely to pay as much per journey as occasional travellers. And it seems unfair for commuters to have a dilemma as to whether to by a season ticket or not – I haven’t even discussed the effect of Bank Holidays, leave, sick-days and occasional home-working. This is the opposite of the case for main-line rail commuters who get a tremendous deal compared to the occasional traveller.

From TfL’s point of view inflating the cost of Travelcards relative to pay as you go (PAYG) fares may also not make sense in the long-run. The result may be that more of us in suburban London stop buying Travelcards and instead cut out as many bus and tube journeys as possible. As I said yesterday, “maybe it hasn’t occurred to TfL that people might consume less of their product when they put the prices up”.

September 15, 2011

Off the Buses

Boris has announced the 2012 London Transport fare increases already. Do we always get an announcement at this time of year? Or is our leader trying to get the bad news out of the way as long as possible before the mayoral election in May 2012? I note that the last time I visited this topic was in January this year when the last fare rises actually came into effect. With a bit of luck there’ll be a double whammy with negative stories now and in January 2012.

Let’s get the ball rolling with a negative story, then.

The BBC provides a link to the documents issued by the mayor. I only looked at the first one (pdf), which seems to tell me everything I need to know.

It turns out that TfL has a Business Plan based on fare rises of RPI+2%. News to me, most likely totally unjustifiable, but certainly worthy of discussion.

First, are we to believe that TfL’s costs rise faster than general inflation? This seems unlikely, though we do know that many of their employees are extraordinarily privileged to the extent that they apparently deserve a bonus just for doing their job during the Olympics. A lot of people will be working then, and the vast majority will be paid their normal salary, and would expect nothing more. I don’t support the present government, but I was rather hoping they might look at strike law with a view to stopping Londoners being continually held to ransom.

Second, on the customer side, how is it possible to bear continual above inflation rises in transport costs? I’m thinking of low-paid workers travelling into central London. The cost of a weekly Travelcard (tube and bus) season in 2012 will be £34.80 to zone 3, £42.60 to zone 4, after rises of 8.1% in each case. That’s about £1 per hour of work! Surely the minimum wage for central London needs to be higher than elsewhere to compensate? Assuming your pay rises roughly in line with inflation (which is doing well these days), then, if you have to spend more on transport, you have to spend less on something else. That is unsustainable. TfL is not like national rail, which, as the Transport Secretary pointed out this week, is now a service for the wealthy. It is simply not realistic for TfL to increase its prices by more than RPI for a long period of time, unless the lowest wages are increasing by at least the same rate.

So why has TfL adopted the RPI+2% formula? Maybe the document I downloaded doesn’t tell me everything I need to know after all. There seem to be a lot of TfL Business Plans, but the 2009 one for 2009/10 to 2017/18 tells us what we need to know:

“…fares in January 2011 and in subsequent years are now assumed to rise at RPI plus two per cent.”

So it is indefinite. And the purpose is clearly to increase the proportion of operating costs covered by fares and therefore reduce what TfL term “Net operating expenditure”:

Excerpt from TfL Business Plan 2009/10 - 2017/18

Let’s just note in passing that the congestion charge is going to raise less in 2017/18 than 2009/10!

Bizarrely, TfL don’t state what the figures in the table refer to. Presumably they’re 2009 £s (i.e. adjusted for inflation). Assuming that is the case, TfL assumes a steady growth (several % p.a. varying erratically) in passenger numbers as well as a 2% annual increase in the fares. They say:

“As the economy recovers from recession, it is projected that demand will return to current levels by 2012 and then continue to grow strongly as London’s employment and population increase, with demand reaching record levels by the end of the Plan.”

This is a fairly heroic assumption, as it seems to assume a very low elasticity of demand – maybe it hasn’t occurred to TfL that people might consume less of their product when they put the prices up. I’ll return to this point in due course.

TfL’s Business Plan suggests they expect costs to also rise by several % p.a. more than inflation, and also erratically, with a bigger increase in 2012/13 presumably to reflect the need to bribe the staff not to disrupt the Olympics, and in 2017/18, perhaps because Crossrail comes onstream (though there is no concomitant increase in fare revenue).

So in answer to my earlier questions, it seems that unlike every other field of economic activity, running London Transport becomes less and less efficient with time. And low-paid London commuters are expected to pay an ever-increasing proportion of their income on transport.

It seems to make sense that the fare-payer should cover the cost of the service, but let’s make a few observations:

1. Unlike many others, the London transport market is not segmented, so that those who can pay more do (compare walk-on national rail or air fares with advance tickets). I’m not saying I’m a fan of dramatic market segmentation. It creates its own problems, such as making urgent travel punitively expensive for everyone. But in an unequal society, it does allow some access to services for the less well off. Obviously it’d be better to have greater income equality in London, but until that happy day, subsidising fares helps alleviate the problem.

2. The fare-payer is not the only beneficiary of the London transport network. Just as, in the ’80s and ’90s, out of town superstores and malls benefited from the motorway network, such as London’s M25, (and generally improved roads), so the new millennium has seen similar developments – notably London’s twin east and west Westfields (or perhaps the new one should be an Eastfield?) – piggybacking on the city’s public transport network. Maybe these businesses should chip in and subsidise fares from the taxes they and their customers pay.

3. Just as for customers, businesses benefit from the availability of employees. They don’t pay a higher minimum wage even for staff having to travel into the centre of London. Maybe they should, but in the meantime it doesn’t seem entirely unfair for businesses and higher paid employees to subsidise the fares of the low-paid through the tax system. £1 travel cost for each hour of work is a lot for those earning little more than the minimum wage of £6/hour.

4. Today’s fares shouldn’t subsidise investment. That should be paid for by future fares, i.e. the beneficiaries of the investment. And in fact, the goal in TfL’s Business Plan is not apparently to increase fares to pay for more investment. So when Boris mentions investment in the same bluster as higher fares he’s actually being misleading and trying to deflect criticism.

And on top of this, there’s an anomaly in the pricing scheme – this is what really got my goat and prompted me to delve into the mire of transport fares once again:

“Travelcard season prices increase by 8% overall because of the link with National Rail fares which, as approved by the Secretary of State for Transport, are to rise by 8% (RPI+3%).”

What tosh.

Fares other than Travelcards are going to increase by RPI+2% (7% this year), but Travelcards are going to increase by RPI+3%, because you might get the train.

Do they think we’re stupid?

The price for a mainline train within London is the same as the price for the same journey by tube. I can go to Ealing Broadway and get a train to Paddington or I could get the tube there. I’d touch in and touch out with my Oyster card the same either way.

The daily limit applies just the same whether I use tubes and buses or tubes, trains and buses.

No, increasing the weekly limit faster than other fares (and remember this won’t happen just this year, but indefinitely until the policy changes) affects certain people disproportionately. The sort of people most affected are those who use the system most, that is, those dependent on it most likely to get to work, that is, those with least choice.

I’m in zone 3. If you need to get a bus and tube to and from work – and tube stations are thin on the ground out here, so often a long walk – then you’re going to need a weekly Travelcard (£32.20 in 2011; £34.80 in 2012), given that 10 peak pay as you go (PAYG) zone 1-3 tube journeys alone cost £29 in 2011 and £31 in 2012.

Of course, the tragic thing about all this is that many Londoners get the bus all the way into the centre to save a few pounds at the expense of perhaps an hour a day. But even they’re being screwed. The cost of a 7 day bus and tram pass is rising by 7.3% from £17.80 in 2011 to £19.10 in 2012. I can understand why the individual bus fare is increasing by 7.7% – that’s to keep a round number (£1.40 in 2012 after £1.30 in 2011). But £19.00 for the weekly pass would have been a 6.7% increase. Why not stop there? Gratuitous.

As far as I can see, the main beneficiaries of the fare changes for 2012 are off-peak occasional tube travellers for whom the zone 1-2 fare rises by only 5.3% (£1.90 to £2 – OK a nice round figure) and the zone 1-4 fares by a mere 4% (£2.50 to £2.60). For the last, £2.70 would only have represented an 8% increase. It seems fairer somehow to impact what is most likely discretionary travel a little more and that for people trying to make ends meet a little less.

What else could be done to help the low-paid? Besides fair pay, that is.

Well, here’s another curious anomaly. “Peak” in regard to the daily limit means 4:30-9:30am. That is, if you travel between those hours the daily cap will be the peak rate (£10.80 in 2012, rather than the off-peak £7.80). But if you don’t reach the daily limit and just pay as you go, the peak is 6:30-9:30am and 4-7pm (16:00-19:00). Odd. Why not give people more of an incentive to travel before 6:30am, when presumably there is spare capacity? Why not make the peak daily limit apply only if you travel between 6:30 and 9:30am? Wouldn’t this be sensible demand-management? It would help at least some of those who currently spend more than the off-peak daily limit because they take a bus and tube to work (e.g. in zone 3 in 2012 a pre 6:30am tube fare, a peak return fare and two bus fares would come to £2.60 + £3.10 + 2x£1.40 = £8.50, above the off-peak cap of £7.80 but below the £10.80 peak cap).

The case I’m most interested in is my own, of course. It’s the borderline case, where I may as well walk to and from the tube station rather than catch the 297 (or infrequent E10). If the service were more frequent I might take the 297 to Ealing Broadway. As it is, I never do, because I don’t know how long I’ll have to wait, at least until I get to the stop, when there may be a few clues. When I come out of the station, though, I can sometimes see the bus waiting, or at least a queue of people. I’d take it more often if they actually bothered to display a departure time. But sometimes it comes down to a cost consideration. Basically, I’ll rarely pay the full fare. I might take the bus, though, if I reckon I’ll hit the daily limit.

I note that for 2012 the daily limits for zones 1-3 are increasing by more than the relevant tube fares. The peak daily limit is going up from £10.00 to £10.80 (8%) whereas the peak tube fare is increasing only from £2.90 to £3.10 (6.9%). And off-peak, the daily limit is going up from £7.30 to £7.80 (6.8%) whereas the tube fare is increasing only from £2.50 to £2.60 (4%).

So, in 2011, an off-peak return tube journey to the centre, and a journey within zone 1 (£1.90) came to £6.90, leaving 40p of the daily limit to be taken up by a bus fare, but the same itinerary in 2012 would come to £7.20 before the bus, which effectively costs me 60p. OK, it’s a 50% price increase but I expect I’ll still hop on a 297 at Ealing Broadway station if passengers are boarding!

Nevertheless, if TfL persists in increasing weekly Travelcard prices by more than other fares, there will be people who switch to pay as you go, and walk to tube stations rather than take the bus. Maybe this is all very healthy, but it seems a strange policy. It would make more sense to me to raise all TfL prices by exactly the same percentage and charge – now that it’s all electronic with Oyster – to the nearest penny if necessary.

May 27, 2011

The UK’s RTFO – Electricity Should Count

Filed under: Biofuels, Electricity, Energy, Global warming, Rail, Road, RTFO, Transport — Tim Joslin @ 4:14 pm

The UK’s RTFO (Renewable Transport Fuel Obligation) is the policy dating back to 2007 that enacts an EU Directive requiring member states to ensure that an increasing proportion of transport fuel is renewable. This meant biofuels. I’ve written previously at length about this folly, most recently here. RTFO, folly, policy, maybe we should talk about the “follicy”, the “RTFOlly” or even the “RTFOllicy”!

Anyway, the EU seems to have listened to at least some of the many organisations objecting to their biofuel policy. They’ve come up with not one, but two new Directives which affect national policies on the issue:

  • The Renewable Energy Directive (“the RED”), 2009/28/EC (pdf), is broader in scope than transport. It details the requirements on EU member states to meet the 2020 goal of 20% renewable energy in the EU as a whole. Whilst this is broken down into different targets for different countries (for example the UK has to get to 15%), the Directive reaffirms a uniform 10% renewable target for transport fuels. It includes a lot more detail on how this can be done, though, including sustainability requirements of various kinds.
  • A new Fuel Quality Directive (“the FQD”), 2009/30/EC (pdf) which amends an earlier FQD by introducing an Article 7 (actually I now see there’s a bit more complexity than that – you can’t take anything on trust, can you?), which introduces two extra requirements:
    • to reduce greenhouse gas emissions in transport fuel by 6% by 2020;
    • for transport biofuels to meet certain sustainability criteria.  Apparently these are to all intents and purposes the same as those included in the RED, so perhaps the FQD is a Directive too far and the RED should have just covered everything.

Accordingly the UK’s Department for Transport (DfT) has initiated not one, but two reviews (hey, we can create a legislative mess just as well as they can in Brussels!), with consultations on both open until next Thursday (2nd June):

  • The RED Public Consultation, which considers amendments to the RTFO, to meet the new Directive including biofuel sustainability criteria.
  • The FQD Public Consultation, which only covers the requirement to reduce by 6% by 2020 the greenhouse gas (GHG) intensity of transport fuel or energy.

One of the problems with biofuel policy in the EU – apart the very existence of quotas and subsidies in the first place – is that it has become hideously complex.  There are no doubt many little devils in the detail.  But all I’m going to cover in this post is one aspect of the RED.

It seems that the EU has actually done something sensible.  They’ve introduced a clause to ensure that the 10% renewable energy in transport target is technologically neutral.  That is, they’ve back-tracked on trying to second-guess what kind of non fossil-fuel powered cars many of us will be driving by 2030 or so.  Yeap, they’ve only gone and allowed renewable electricity (and hydrogen for that matter) to count towards the 10% target.

Here’s what they say in paragraph 4 of article 3 of the RED:

“4. Each Member State shall ensure that the share of energy from renewable sources in all forms of transport in 2020 is at least 10% of the final consumption of energy in transport in that Member State. For the purposes of this paragraph, the following provisions shall apply:

(a) for the calculation of the denominator, that is the total amount of energy consumed in transport for the purposes of the first subparagraph, only petrol, diesel, biofuels consumed in road and rail transport, and electricity shall be taken into account;

(b) for the calculation of the numerator, that is the amount of energy from renewable sources consumed in transport for the purposes of the first subparagraph, all types of energy from renewable sources consumed in all forms of transport shall be taken into account;

(c) for the calculation of the contribution from electricity produced from renewable sources and consumed in all types of electric vehicles for the purpose of points (a) and (b), Member States may choose to use either the average share of electricity from renewable energy sources in the Community or the share of electricity from renewable energy sources in their own country as measured two years before the year in question. Furthermore, for the calculation of the electricity from renewable energy sources consumed by electric road vehicles, that consumption shall be considered to be 2,5 times the energy content of the input of electricity from renewable energy sources.

By 31 December 2011, the Commission shall present, if appropriate, a proposal permitting, subject to certain conditions, the whole amount of the electricity originating from renewable sources used to power all types of electric vehicles to be considered.

By 31 December 2011, the Commission shall also present, if appropriate, a proposal for a methodology for calculating the contribution of hydrogen originating from renewable sources in the total fuel mix.”

I’m afraid I can’t be held liable for any migraines induced by clauses a) and b). I suggest we come back to those when we’re feeling at our best.

It’s clause c) that’s interesting. But when we look at the DfT’s RED Consultation document (pdf) this is what they say (on p.39-40):

“11.6.1. Allowing all renewable fuels to receive RTFCs

We propose to remove the specific list of renewable fuels which may count towards a supplier’s obligation to supply renewable transport fuel in article 5(3) of the RTFO Order. Instead the Order will allow the renewable part of any transport fuel to be eligible for an appropriate number of RTFCs.

We believe our proposal will reduce the burden on industry by enabling any newly developed fuels to automatically count towards the RTFO.

The RED permits all forms of renewable energy to be used to count towards the 10% transport target. While the Directive does allow for the use of renewable hydrogen to meet this target, there is not currently a methodology in place for calculating the contribution of hydrogen from renewable sources. However, the Directive does require the European Commission to come forward with a proposal for such a method by 31st December 2011. We do not propose any amendment to the RTFO to allow renewable hydrogen to be eligible for RTFCs at this time but we will keep this issue under review.

Similarly, we do not propose to allow renewably generated electricity for transport to be eligible for RTFCs at this time. Again, we will keep this issue under review.” [my stress]

This is a bit odd, since the EU clearly said in article 3, paragraph 4, clause a) that in calculating the total energy used in transport:

“…only petrol, diesel, biofuels consumed in road and rail transport, and electricity shall be taken into account.”

which is a tad imprecise (presumably the “only” is present because they assume member states will want to minimise this figure), but I think can be taken to mean:

“…all petrol, diesel, biofuels and electricity consumed in road and rail transport, and no other fuel, shall be taken into account.”

and in clause b) more clearly that:

“…all types of energy from renewable sources consumed in all forms of transport shall be taken into account.”

The DfT’s RED Consultation document, then, provides no evidence that we know what the RTFO target should actually be, because electricity used to power transport has not been taken into account.

Furthermore, the argument for electricity is not “similar” to that for hydrogen, as the RED Consultation dismissively states in section 11.6.1 (above).  Unlike for hydrogen, the RED does supply a “methodology… for calculating the contribution [of electricity] from renewable sources”. In fact, it supplies two methodologies!  Pending a proposal for more accurate calculation (due by the end of 2011), the UK could elect to use either the proportion of renewable energy in the EU as a whole or in the UK (RED Article 3, paragraph 4, already quoted above).

Not including electricity makes the 2020 target more difficult to meet, because, both in the EU as a whole and in the UK, the proportion of renewable energy in electricity will be much greater than the 10% RED transport fuel target. Indeed the target under the UK’s Renewables Obligation scheme for the proportion of electricity from renewable sources by 2015 is 15% (keep on these numeric alliterations – must be a word for that – aren’t they?).

And it’s not as if the proportion of transport powered by electricity is trivial, since it already includes the majority of rail, including the London Underground a few trams and the odd remaining milk float!  That’s before we take account of the Climate Change Committee’s targets for electric vehicle uptake!

Why the omission? One possibility is that we don’t care, because we’re quite happy to promote biofuels to an even greater extent more than mandated by the EU.

But this hardly seems likely. Remember I said we’d have to come back to the EU’s clauses a) and b)? Well, I’ve steeled myself with a strong cup of coffee and am ready to tackle it. What these clauses say is that you can count renewable fuel used off-road (in farm vehicles and pleasure-boats etc – the DfT even have an abbreviation, NRMM, “non-road mobile machinery” for this set of vehicle categories) towards the target proportion of renewable road and rail fuel! Completely bonkers, of course. No doubt there’s a reason, some fix they got themselves into trying to implement the policy. Let’s not dwell on that.

The point is that the DfT proposes to scale back its RTFO targets to take account of the inconsistency between clauses a) and b). They lay out policy options (section 11.5, p.28ff) and note (on p.31) that:

Given our concerns regarding the sustainability of biofuel, at this stage we do not wish to see any additional increases in the volume of biofuel supplied in the UK above those already set out in the current RTFO [which did not take NRMM fuel into account]. We therefore propose to pursue Option B [to scale back the annual RTFO targets – which is actually done retrospectively (scaling back targets retrospectively? – we’re definitely not in Kansas any more!) in Table 3 on p.32].” (my stress as usual, as well as comments in square brackets)

A second possibility is that maybe the DfT hasn’t realised the significance of the inclusion of electricity. But this doesn’t seem to be the case. Because there’s another curious passage in the RED Consultation document. On p.50 we find:

“11.7.2. Preventing the use under the RTFO of renewable fuel that has already been used under another obligation

As discussed earlier, the RED has two targets for the supply of renewable fuel. In order to ensure that renewable fuel is not counted twice towards the different targets, we propose to require that suppliers submit a declaration stating that the renewable transport fuel for which they are claiming an RTFC has not been used to discharge any other renewable energy obligation (for example the Renewables Obligation).” (my stress)

But the Renewables Obligation relates specifically to electricity generation!

The DfT’s FQD Consultation document (pdf) adds even more confusion:

  • On p.6, in section 6, “Who should read this consultation?” it includes “a provider of electricity for use in transport”, a category not included in the corresponding section of the RED Consultation document.
  • On p.10 in section 7, “Overview of the FQD” they note very clearly that:

“Furthermore, Article 7a(1) requires Member States to ensure that providers of electricity for use in road vehicles can choose to contribute to the GHG reduction obligation if they can demonstrate that the electricity they provided was used in electric vehicles.” (my stress)

  • On p.14, in section 10, they note that they will:

Establish rules for grouping and the participation of electricity providers for electric vehicles;

  • And they discuss the issue on p.34, in section 11.12, “Electricity for use in road vehicles”:
  • “The FQD requires Member States to ensure that providers of electricity for use in road vehicles can choose to contribute to the GHG emission reduction obligation if they can demonstrate that the electricity they provided was used in road vehicles.We propose to designate electricity providers as being those entities that sell electricity for public consumption. In order for an electricity provider to contribute to the GHG reduction obligation we would require them to supply adequate proof that the electricity they provided was used in road vehicles.

    The European Commission is in the process of considering how to account for the GHG emissions associated with electricity. Initial proposals from the Commission have suggested that Member States would be able to choose between assigning the GHG intensity of electricity used in electric vehicles as being equal to either the Member State average, or the EU-wide average for electricity generally.”

    A strange reading of the RED, which to me is not an “initial proposal”, but an “interim measure”, allowing progress towards the 2020 target to be tracked – more thorough accounting would make the target easier to achieve.

Why, then, has the DfT (or at least the RED Consultation team) ignored the opportunity to meet the RED transport fuel obligation by – at least in part – using renewable electricity? My guess is that there are two main reasons:

  • They’ve baulked at the sheer complexity.  For example, different numbers of Renewables Obligation Certificates (ROCs) are awarded for a unit of energy depending on the technology used to generate the electricity.  Converting them into Renewable Transport Fuel Certificates (RTFCs) would require either knowledge of the energy source or assuming that they are representative of the mix.
  • Vested interests now exist in the biofuel supply market.  Perhaps, although the DfT is now concerned about the sustainability of biofuels, they feel politically unable to reduce the total amount of biofuel in the UK’s quota below that previously assumed (even though, to meet the original quotas more biofuel would have had to be supplied because some would “leak” into the NRMM market and be unable to receive RTFCs).

It seems to me that these problems – assuming my guesses are correct – can be overcome.  A rule (such as an average weighting for all renewable sources on the network) for converting ROCs to RTFCs is perfectly feasible.  And even this is not absolutely necessary, since – to point out once again something the DfT seems to have misunderstood – the EU has allowed assumptions about the proportion of renewable electricity supplied to the transport sector to be made.

If renewable electricity suppliers are denied the opportunity to benefit from the RTFO they have a clear case for complaint. The whole point of the latest EU Directives is surely to ensure that the latest EU thinking – including technological neutrality and effectively a lower biofuel target for 2020, as well as measures to ensure biofuel sustainability – is included in the rules for schemes operated by the member states.

It does not appear that the UK’s RTFO scheme will be compliant with the EU’s RED following the current review.

January 4, 2011

Subsidising Cambridge Commuters?

Filed under: Bus, Economics, Inequality, Rail, Tax, Transport, Tube — Tim Joslin @ 4:28 pm

Labour is choosing to attack today’s VAT rise as “the wrong tax at the wrong time”. I’m not so sure. It seems to me that stealth tax rises, such as on public transport, are far less fair.

Pre-empting arguments over the figure, Labour are cunningly pointing out that the Lib Dems claimed during the General Election that the VAT rise would cost “the average household” £7.50 a week.

Curious. £7.50 extra VAT a week at 2.5% implies £300 of spending that qualifies for the tax – that is, £300 of spending that doesn’t include mortgage or rent, food, children’s clothes, books or newspapers, lottery tickets, gas, water, electricity, public transport or Council Tax. Difficult to manage on an income of ~£30K, that is, a weekly spend of ~£600, I’d have thought.

On the other hand, multiplying £7.50 by 52 weeks and the ~20m households in the UK gives around £7.5bn, which does seem about right. I suspect VAT is in fact a progressive tax.  The wealthy spend proportionately more on the sort of things that qualify – restaurant meals, expensive booze, nibbles and confectionery, new cars, designer gear and other big-ticket items.  The poorest – getting by on Tesco bogoffs, saving up for the odd bus ticket, buying all their clothes from charity shops and so on – must have eff all VAT-qualifying expenditure.

I strongly suspect that this is a case where Mr & Mrs Average do not in fact actually exist.

Maybe Labour would gain more votes by instead pointing out what appears to have been another case of dissembling during the election campaign by those (allegedly) lying liar Liberals.

Or perhaps they could have focussed instead on the increases in public transport costs which are in many cases seriously regressive.

Take the Zone 1-4 Travelcard (and daily Oyster limit) which will affect those working in the centre of London.  It’s rising from £6.30 to £7.30, off-peak, that is, by nearly 16%, not the 11% the BBC calculates, bless. What’s more, if you happen to live near muggins here in zone 3, the peak Travelcard/Oyster limit has increased from £8.60 to £10 – that’s over 16% even if you’re the BBC – to match the unchanged rate for zone 4.

Curiously, bargain of the year for 2011 is the 7-day zone 1-3 Travelcard which remains less than that for zones 1-4 at £32.20 against £30.20 last year, a mere 6.6% increase.  This could now pay for itself in 32.20/10.00 = 3.22 days, against 30.20/8.60  = 3.51 days last time out.  Even off-peak it’s worth considering at 32.20/7.30 = 4.41 against 30.20/6.30 = 4.79 days.  More realistically a mix of peak and off-peak travel into London over 4 days (2*£10.00 + 2*£7.30 = £34.60) would justify buying the Travelcard for £32.20 whereas last year you were much more likely to need to travel on 5 days (2*£8.60 + 2*£6.30 = only £29.80, still less than a £30.20 Travelcard).  Where’s the logic in that?

Having to decide in advance whether to invest in a weekly Travelcard is an unnecessary irritation, since the system could cap weekly expenditure in the same way as daily.  I understand TfL’s IT experts will get round to doing this by around 2013.

Hours of amusement, perhaps, though maybe deadly serious if, like me, you fall into the category of zone 3 residents who travel into London on an irregular basis.  A category that is being seriously screwed by the latest fare rises.

Who will this arbitrary unfairness affect the most?  The poorest of course.  Consider those who live in zone 3 and can’t afford the higher price of property near a tube station.  In 2010 two off-peak tube fares to the centre at £2.40 each, for example, brought you within striking distance – £1.50 – of the daily limit of £6.30.  You didn’t end up spending full whack on the bus each way to the tube station – the cost was capped at another £1.50.  In 2011, though, those two tube fares will set you back £2.50 each, but the daily limit has been disproportionately raised to £7.30, so the buses will cost you £2.30.  The tube fare – which is all Mr Rich who lives near the station has to worry about – might have gone up by only 4%, but the bus fare will have risen by 80/1.50 = 53%!  The percentage is even greater if one of the tube fares happens to be at the afternoon peak rate (£2.70 in 2010, £2.90 in 2011, charged from 16:00 to 19:00) when the off-peak daily cap still applies. [In 2010, £2.40+£2.70 left £1.20 of the £6.30 daily limit for the bus; in 2011, £2.50+£2.90 leaves £1.90, so the cost of choosing the bus rather than walking has risen by more than 58%!].

I happen to fall into the category of those who live near enough to a tube station to be able to walk if I’m not feeling lazy.  I now have much more of an incentive to do so.  What TfL has done is make it much more expensive for zone 3 travellers to use a bus as well as the tube.  So more people will walk instead and TfL may not even realise the extra revenue they may expect from the daily cap increases.  Leaving everyone worse off.

Boris may want to take note that with another 8.3% increase (from £1.20 to £1.30) in the flat-rate bus fare, following the 20% increase at the start of 2010 (from £1) he’s making short hops in general more and more expensive.  The flat-rate fare makes a lot less sense in a purely fare-based system than in a subsidised one where the fares don’t recover the full cost.

Commuters who make one tube journey each day haven’t been hard hit, but it’s difficult to find categories of bus user who aren’t much worse off after these latest changes.  The daily bus limit has only increased by 2.6% – from £3.90 to £4 – this time (though it was £3.30 in 2009).  This is good news only for occasional bus commuters to the centre, who most likely have to change – and it’s a disgrace that some people are paid so little that they can’t afford to use the tube (and note that you face no penalty for changing tube routes) – since the 7 day bus pass has increased by 7.2% from £16.60 to £17.80.  [And now represents 4.45 rather than 4.26 daily maximum fares.  Where’s the logic in that?].

All this has been rather a digression as what I really wanted to do was provide an update on the cost of mainline rail travel.  ‘Cos if you want to get about the UK within a finite time you need serious money.

A couple of years ago I introduced the Cambridge Day Travelcard (with Network card discount) fare index, which is admittedly not yet perhaps quite as famous as the Economist’s Big Mac Index.  Here’s the full series, brought up to date:

2003     £11.55

2004     £12.60     9.1% increase on previous year

2005     £13.85     9.9%

2006     £14.85     7.2%

2007     £15.20     2.4% (presumably lower because of the new afternoon restrictions – the return can no longer be used on trains departing King’s Cross between 16:30 and 19:00, which is inconvenient, to say the least)

2008     £15.85     4.3% (lulling us into a false sense of security)

2009     £17.50     10.4% (out of the blue – it’s a record!!)

2010     £17.50     0% (but still a real-terms increase! – according to the RPI, prices in July 2009 were 1.4% lower than a year earlier)

2011     £18.50     5.7% (close to the July RPI of 4.8% plus 1% which I understand was allowed for the average of each operating company’s fare increases)

So the cost of a day Travelcard from Cambridge to London – for a degraded service, remember – has risen a whopping 60.2% in the mere 8 years since 2003.

What about inflation?  Really we should compare the RPI for a month from December 2010 to December 2011 (reflecting general prices when we’re actually travelling) with the same month in 2002-3, but the latest data available is for November 2010 when the RPI index was 226.8.   It was 178.2 in November 2002, so prices in general over the same 8 years have risen only roughly 27.3%.

That is, in 8 years, the day Travelcard from Cambridge to London (with Newtork card discount), for a degraded service, has risen about 25.8% in real terms.

And the formula for the next few years is RPI+3%.

But what really got my goat, and prompted this post, was reading the comments of an RAC spokesman in Saturday’s Guardian:

“The RAC Foundation, a motoring thinktank, claims that the annual £5bn subsidy of the rail network disproportionately benefits Londoners and the well-off, with 40% of households earning more than £50,000 a year using the railways at least three times a week – double the figure for those on less than £25,000 per year.

Stephen Glaister, its director, said: ‘The rail subsidy comes from the Treasury and, in that sense, it is paid for by everybody. But the benefits are weighted towards the south-east and the relatively well-off. If government policy is intended to help redistribute wealth and help the less well-off, rail subsidies are a poor way of doing it. Spending the money on helping road users would be a better way of doing it.’ “

Well, of course only the wealthy can now afford to use the railways!  There’s not much point taking a £15K a year job in London if it’s going to cost you £5K of that just to get to work, is there?

But I rather dispute that the benefits are “weighted towards the south-east”, or at least towards commuters on busy routes, such as Cambridge to London.  What I suspect happens is that commuters subsidise those travelling off-peak; busy routes subsidise those at the periphery of the network; and busier regions, especially in the south-east subsidise less-busy regions.

The Guardian could, for example, have taken a peak at the latest (2009-10) National Rail Trends (NRT) Handbook from the Office of the Rail Regulator (ORR).  On p.62 you’ll find table 6.2c which gives the 2008-9 passenger subsidies for each Train Operating Company (ToC).  I crudely show it here:

As can be seen at a glance, First Capital Connect (FCC), which operates the Cambridge-London route, is not directly subsidised, but in fact pays 3.4p per passenger kilometer for the privilege of running the trains.  Now, this is for the whole franchise, which must include peripheral routes that are less heavily used, as well as the most overcrowded trains in the country from Cambridge.  But those peripheral routes at least help to bring some passengers onto the network, so let’s take the figure of 3.4p to be realistic.  A round trip to London must be in excess of 100km, so travellers from Cambridge are on average paying in at least £3.40 every time they buy a return ticket.

But the franchise payments are not the main subsidy to the railways.  The taxpayer provides around £4bn a year in direct support to Network Rail (see Table 6.2a of the ORR’s HRT handbook – self-serving obfuscation in Network Rail’s financial statements reveals no more detail).  Table 6.2c shows a total of around 50bn passenger kilometers per year (note that some operators are outside the franchise system so the distance total in table 6.2c is not complete).  Making the heroic assumptions that Network Rail’s subsidy is evenly spread and not used to support vanity investment projects, rail passengers do indeed appear to be subsidised to the tune of around 8p per passenger km.

Combining the two subsidies suggests FCC passengers are on average subsidised by around 4.6p per km (8p – 3.4p) whereas those on, for example, Northern Rail receive around 12p/km (8p + 4p from Table 6.2c).

The Guardian notes that an annual season ticket from Cambridge to London costs around £4000.  If this is used 250 times, that works out at around £16 per day return, not bad at all compared to the £13.85 price for an off-peak day return with a Network card. It seems commuters in fact get a relatively good deal since their season ticket entitles them to unlimited travel to London at times when the day return fare would otherwise cost an absurd £34.

This isn’t quite what I expected – as always, it pays to delve into the numbers.  It seems a bit daft for an annual season ticket to represent no more than 120 daily trips (£4000/£34).  I don’t really see why anyone making fewer than that should be so severely penalised.  This discourages all kinds of business and other activity, part-time working, working from home and tourism, for example.

It remains conceivable that even commuters on the Cambridge to London route are still being subsidised, though the trains are so busy I’m confident that the Cambridge to London route in fact subsidises the rest of the FCC franchise.

The people really being fleeced are:

– those adults without a Student, Senior or other railcard – since anyone can buy a Network card for around £25, this means occasional users are penalised, which hardly helps to bring new passengers onto the railways;

– all non season-ticket holders forced to travel at peak times (which, since 2007, includes 16:30 to 19:00 from King’s Cross);

– purchasers of single or open return tickets. An Anytime (i.e. including peak-time trains) open return from Cambridge to London now costs the same as two peak singles, at £40, a ridiculous two and a half times the effective rate (£16) for a season ticket-holder occupying the same seat – or more likely standing on the same train.

The numbers suggest these categories of passenger from Cambridge to London are definitely not being subsidised.

If the strategy is for costs of rail travel to be attributed to those using the service, then it makes no sense for some categories of passenger to pay substantially more than the cost.  The open return ticket price should be reduced to that of the day return and single tickets should be half the return price.   For Cambridge to London, the non season-ticket peak fare is way out of line and should simply be reduced to say 1/150th of the season ticket price, that is, around £27 (from £34).

The TOCs effectively have monopoly pricing power.  Prices therefore reflect expediency rather than the cost of providing the service.  If there were a decent level of competition they’d soon find another operator could afford to undercut them on those fares that are out of line.

What’s more, allowing peak fares of effectively twice the off-peak rate gives no incentive to rail companies to increase passenger numbers, for example, by running more late-night and pre morning-peak trains.  Allowing an afternoon peak is insane – the rail company has a disincentive to ease over-crowding.

The whole rail franchise system is dysfunctional.  What’s effectively being sold is the right to charge monopoly prices.  This is absurd.

In an ideal world, there would be no need for peak and off-peak fares – sufficient trains would be run to meet demand at all times.  In the meantime, though, the need for demand management skews incentives for the TOCs.  It’s therefore necessary to divorce ticket-pricing from financial rewards to the TOCs.  The TOCs should be paid just for the service they provide – that is, the same rate per passenger regardless of when they travel and how much they’ve paid for their ticket.  And less per passenger on trains that are more than 70% full. The TOCs should have an incentive to increase use of the railways, not screw more money out of fewer passengers.

January 20, 2010

Parking Paralysis (and Housing Horror)

As we head towards what promises to be a fascinating General Election, the absurd first past the post system has ensured the parties are united in their zeal to pander to Middle England. And Middle England, it seems, is consumed with localist fervour.

What is localism, anyway?

The politicians would have you believe that the first stop on the road to true democracy is to “empower communities”. That is, they assert the moral right of the current residents of a given area to make a broad range of decisions without reference to the general interest.

The idea that the primary unit of a complex modern society is a “community” of people living near one another is, of course, absurd. In fact, our personal networks – including families – are, in general, becoming more and more geographically dispersed. We have little in common with most of our neighbours, other than the area where we live.

Harking back to an outmoded idea of the community masks what is really going on. What’s really happening is that the political process is becoming more and more skewed towards vested interests and against the general interest.

Take housing, for example. This morning I heard the Housing Minister, John Healey, on the Today programme, promising to clamp down on “garden-grabbing”.

Let’s put to one side the fact that John Prescott was right: we need to increase housing density. Labour has caved in on this principle as the Tories have gradually captured local government. But below a certain threshold of population density local shops are not economically viable; nor is public transport. Pretty soon everyone’s driving to Tesco’s. And the same nauseating nimbys who prevented “overdevelopment” are complaining about the loss of local shops and whinging about “Tesco towns”.

I consider it absolutely ridiculous that I’m in London Transport Zone 3, but 10 minutes walk from a pint of milk and a newspaper. If there were a few more flats nearby and perhaps fewer large private gardens, maybe there’d be enough people in walking distance to sustain a local corner-shop. If it could get planning permission.

Let’s ignore the “community” narrative and instead consider what’s really happening with the “clamp-down” on “garden-grabbing”. What John Healey is really doing is strengthening the rights of neighbours over the owners or prospective owners of property – despite the fact that the size of gardens has marginal impact on neighbouring properties, or, for that matter, their value. If they reduce the size of a garden, those bogey-men, the developers, are not simply being bloody-minded. The market is telling them that the land has less value as a garden than as building. If the opposite was the case they’d increase the size of gardens.

Obviously, the reason why “building” is more highly valued than “garden” could have something to do with the lack of available housing in many parts of the UK. But clearly our leaders don’t see this isn’t a good enough basis for a decision. The visceral feelings of neighbours are obviously far more important.

A few weeks ago Secretary of State John Denham rejected plans for a development near Ealing Broadway station. He acknowledged that the proposed “scheme would comply with some specific development plan policies relating to the regeneration of Ealing Town Centre and would bring many benefits to the area”, including 567 homes, but judged that all this value was outweighed by his subjective judgement (in response to local concerns) that “the bulk, massing and certain aspects of the design of the scheme would be inappropriate in its surroundings. It would fail to preserve or enhance the character and appearance of the Town Centre conservation area and the setting of the Haven Green conservation area, as well as harming the setting of the Grade II* listed Church of Christ the Saviour.” One person’s fears about their “visual amenity” (an irritating phrase repeated ad nauseam in planning documents) trumps another’s need for somewhere to live.

Look, Haven Green is a mess. It’s simply not that pleasant a place. It could conceivably be improved by removing the buses which stop and indeed park (for driver breaks, I gather) on the diagonal road across the Green. A recent Ealing Council document (pdf) noted that: “A major consideration, as part of both the Crossrail and Arcadia redevelopment proposals, is the provision of better interchange with local bus services.” But Arcadia is not going ahead, and, if I understand the document correctly, Crossrail has no budget to pay for a proper bus station.

The planning process is bad enough, but nowhere is localism more evident than in the battle for control of scarce road space.

Ealing Council, to my horror, is also consulting on a dreaded CPZ (controlled parking zone), which would affect me.

OK, the proliferation of CPZs can be largely explained in terms of local government bureaucrat empire-building, but there is clearly at least enough tacit public approval to allow them to get away with it. Let’s therefore consider the CPZ in my novel terms of the “local” (or “vested”) interest and the “general” interest.

Before a CPZ is implemented in a given street, everyone has an equal right to park there. After its implementation, car-owning residents generally have absolute priority. In fact, often the schemes are implemented with the shocking inefficiency that non-residents can’t even use the space when it is unoccupied! (Schemes variously allocate a few metered bays or, better, allow metered parking albeit for limited periods and at limited times in residents’ bays).

So, in approving a CPZ, residents in effect extend their property a couple of metres into the road in one fell swoop!

Do they pay a fair price for this asset, though?

Of course they don’t.

Permits for residents’ parking on public roads are often less than £100 per year, and rarely more than a few £100s. The market value of such parking – determined by the rates in the few metered bays typically provided or in nearby car-parks – is usually at least several pounds a day – £1000s, not £100s a year.

It’s not just outsiders who, in effect, subsidise permit-holders. Residents who don’t run cars are massively inconvenienced, as is everyone when they have visitors, or use local services. Estate agents, for example, have problems parking when they quite legitimately want to show properties to prospective purchasers or tenants.

What CPZ schemes fail to take account of is that residents’ cars are part of the problem, and not the only injured party. Personally, it seems to me that there would be more social utility in reserving parking places for estate agents than for residents who just want to leave half a tonne of steel and moulded plastic outside their house for 6 1/2 days a week.

If we’re going to have CPZ schemes, then, let’s charge a market rate for the parking space – upwards of £1000 a year (and allow the option of paying a daily rate for those residents who park their car elsewhere most of the time). Then we’d reduce car ownership, spaces could be allocated to car clubs and for visitors and our parking problems would be much reduced.

What Ealing really wants, though, is not an ever-growing CPZ area. What’s happened is they’ve tried to solve the problem of commuters parking near Ealing Broadway and West Ealing stations. Entirely predictably, the small CPZs implemented have just moved the problem. Now they’re consulting on more CPZs. Nice work, if you’re in the CPZ implementation business.

Is there another policy that might make more sense than the inefficiency of selling the public parking space asset at a discounted rate to residents who think they own “their” road? It is entirely legitimate to discourage car rather than bus or shoe-leather use by commuters. Why not, therefore, consider a congestion-charge scheme for non-residents coming into the centre of Ealing? One might hope that some of the London congestion-charge infrastructure could be fairly cheaply deployed just in the centre of Ealing. I’d suggest vehicles entering and leaving are monitored and the software programmed to charge only for those non-residents who stay in the area more than, say, an hour, since the objective in this case is not to penalise through-traffic but relieve pressure on on-street parking.

Perhaps it will take PR to slow the tide of localism. Certainly though, until the political process weighs the general interest more carefully against vested interests, our society will continue to be held back by dysfunctional and misguided decisions.

April 3, 2009

Train Stress and the 20:52 from King’s Cross to Cambridge

Filed under: Rail, Transport — Tim Joslin @ 9:53 am

I’ve mentioned before that it is possible to write an essay about every UK rail journey. I have something of a backlog – I hope soon to find time to explain to the world the horrors of weekend engineering work – but want to give yesterday’s journey a mention.

I went on a day-trip to Birmingham, taking in the National Trust Back to Back houses and the Barber Institute of Fine Arts. Both well worth-while.

But as ever with UK trains, as much emotional energy is expended on the journey as at the destination.

I bought advance tickets for £8 outward (11:03 Euston to 12:27 Birmingham New Street), £14:50 return (19:10 Brum to 20:34 Euston) weeks ago. There are no reservations (phew!) on Cambridge trains so you can take any you want to London. This in itself is daft, since, if I’d wanted to, I could have added to the crush on the country’s most overcrowded train, the 07:15 from Cambridge – incidentally shortly to be increased from 8 carriages to 12, which will still not be enough for everyone to have a seat, as passengers might expect, given the extortionate fares at commuting times.

I passed on the 07:15 yesterday morning and instead took the 09:15, which actually goes at 09:20 (virtually all the other fast trains are on the quarter hour in both directions), since keeping things simple for the travelling public is not very high up First Capital Connect’s priority list.

The fares were cheap, but this is not the product I want. Nor do the vast majority of the travelling public. What we require are reasonably priced walk-on fares.

The point, of course, is that the penalty for missing the train applicable to your ticket is severe. I read somewhere of someone having to fork out £200 for a new ticket on the Birmingham train. So one reason I took a train (the 09:20) to arrive at King’s Cross (a few minutes walk from Euston where my Birmingham train departed at 11:03) shortly after 10am was to minimise the possibility of missing my connection.

The stress continued through the day, of course, as everything had to be timed to ensure I was at the station in good time for the 19:10. All this, of course, adds considerably to what I term the effective journey time. You end up creating a lot of dead time making sure you don’t miss the sodding trains.

But Virgin managed to increase my train stress levels still further. Get this: when I looked at my train tickets the evening before I saw that the reservations were correct (I’m sure I checked these when the tickets arrived the day after I bought them online). But somehow the actual Cambridge to Birmingham tickets – referred to by number on the reservations – both said “From: Cambridge; To Birmingham”. How could this happen? It seems that when you book tickets online they’re not, as you might suppose, printed automatically. The operation, it appears, is not entirely controlled by computer. No, room for human error has been allowed. I strongly suspect someone takes your online booking and types it again into the ticketing system!

Reflecting on this, and the melee of ticket inspectors at Euston, a cynic might conclude that the UK railways are in reality a very expensive job creation scheme. I couldn’t possibly comment.

Anyway, more stress, as I had to check at Euston that Virgin Trains weren’t going to get arsey and leave me stuck in Brum without a valid return ticket. Then I had to get a replacement ticket issued at Birmingham New Street, which required supervision by a supervisor apparently, though I was careful to explain the problem carefully and the staff were reasonably reasonable – though an expression indicating he’d scented blood flickered across the face of the ticket inspector on the return journey, before I wheeled out my careful explanation again, in my most polite deferential manner. Advice: keep on the right side of these guys!

Still, the trains ran moreorless to time. The 19:10 left Brum a little late, but must have arrived at Euston a little early, as I reached King’s Cross at 20:42, which would have been pushing it if we’d pulled into Euston at the scheduled time of 20:34. Perhaps I should explain how such an early arrival can happen. The point, of course, is that the train timetables are padded. The LSE reported recently (pdf) that “on many routes… it is now no faster to commute into London than in the immediate post-war period, and it is substantially slower than in the 1970s”. I suspect a large part of the reason is an unintended consequence: my guess is that the rail companies have more to gain from ensuring their punctuality targets are achievable than from attempting to speed passengers to their destination as fast as the expensive technology will allow.

Luckily, then, I was at King’s Cross in time to catch the 20:45 fast train to Cambridge. Except there isn’t a 20:45. I took the 20:52 slow train, but this arrives at Cambridge after 10pm, around about the same time as the 21:15. In other words after 20:15 there is effectively only an hourly service to Cambridge. If you can’t control when you arrive at King’s Cross very accurately – assume you arrive there at a random time – then your average effective journey time is 15 minutes longer once the xx:45 fast trains stop running. Explanation: earlier in the evening you have to wait an average 15 minutes for a fast train; after 20:15 you have to wait an average 30 minutes. Catching a slow train at 20:52 or 21:52 or 22:52 gains you virtually nothing (especially as these trains are even slower than the xx:52 services during the day).

Of course, I could hardly argue that a 20:45, 21:45, 22:45, 23:45 and so on should be operated if there were no demand. But there is. Even with the current service, when a lot of people must choose to carry on what they’re doing in London a little longer to catch the fast 21:15 rather than rush for the 20:52 – heck, a lot of people must choose not to take the train to or via London so often in the first place because the evening return service is so poor – the 20:52 is packed when it leaves London and at least half full (that’s a hundred or two passengers, paying probably at least £6.00 on average for the return leg of their journey – do the math) when it reaches Cambridge.

And, to rub salt in the wounds, the 20:52 only has 4 carriages. Last night people were standing when it left London, although I managed to get a seat near the toilet. Luxury. To me this represents a complete breakdown of public control of the train operating companies, because it is completely unnecessary to reduce the train to 4 carriages. The line supports 8. No doubt the train company saves a few pounds, but this must be far exceeded by the cost in passenger inconvenience and discomfort. It seems to me it would be fairly simple to sort this out. Just apply a levy to the ticket revenue for any trains over 70% full. Above this level the passenger experience degrades. You have to sit in seats you don’t want to, couples and groups can’t always sit together and so on.

I simply can’t understand why politicians aren’t falling over each other to propose solutions to the mess that is the UK railways. Don’t they want our votes?

It’s simply a matter of setting the rules to prevent the operating companies short-changing passengers and to give them the right incentives – sticks and carrots – to run the service people want.

February 23, 2009

£13.20 revisited: Cambridge Evening News asks the public

Filed under: Rail, Transport — Tim Joslin @ 7:37 pm

I love the polls that, every day or so, appear on the Cambridge Evening News (CEN) website.  Some seem designed to elicit a particular answer – one can hardly be surprised, for example, that 96.5% of 1552 respondents answer the question: “Can Cambridge sustain a population the size of Manchester?” in the negative. Perhaps the findings would have been a little different if they’d asked: “Do you think Cambridge could grow to be larger than Manchester by late in the 21st century?”

Other questions do seem to tap the wisdom of crowds. The 28.9% of 724 who selected the option “Bin bag” to the question “What is the Fen tiger?” may well have a point.

And “Would you use an Oxford to Cambridge rail link?” (63.9% of 781 say “Yes”), may well belong in a category of legitimate market research.

After my rant about the cost of a Day Return train ticket to London, I was pleased to see the CEN asking the public: “How much do you think an off-peak return train ticket from Cambridge to London should cost?” It’s not a brilliant question since, not only does it fail to make clear whether it is asking about a Day Return or (the more expensive) normal return, most passengers also pay less than the full price – my £13.20 was the full off-peak fare discounted by 34% with a Network card (£20). Infrequent and/or non-student, adult but not Senior passengers without a discount card would pay exactly £20. Obviously, if you have a discount card, its cost has to be spread over all the journeys you make in a year. It’s a shame CEN didn’t sacrifice simplicity for a little more clarity and add “for regular travellers with a Senior, Student or Network discount card” to their question.

Nevertheless, the CEN poll results imply that, based on a sample of 930 people, the Cambridge public believes it is being seriously overcharged: a large minority (42.4%) believe the cost of an off-peak day-trip to London should be £10, and only around a third (35.1%) think it should be more than a tenner. Of those 35.1%, 24.7% believe the price should be only £15. Since £15 is around the minimum you can pay, taking the cost of a discount card into account, it’s likely all but 8.4% of respondents to CEN’s poll believe they are being charged.

I wonder how many of those who answered CEN’s question believe, like I do, that the route is highly profitable, and that these profits are largely being used to subsidise the rail network in other parts of the country?

February 20, 2009

£13.20? You’re having a laugh!

Filed under: Rail, Transport — Tim Joslin @ 9:05 pm

In case my Martian readers are online today, I should describe the background state of affairs: the UK has not only screwed up its trains, the dental service has also been seriously dysfunctional since at least the 1990s.  The main problem tooth-wise is expense, since the NHS service we all pay our taxes for is chronically under-resourced – dentists aren’t paid enough for NHS patients, so have taken their drills to the private market. Nowadays, when a new dentist announces they’re taking on NHS patients, it’s like when fresh fruit arrived in the north of the Soviet Union.  People drop everything and queue.

Obviously, we’d all be better off without the NHS provision (not that I actually advocate this solution, I’m just making a point), now, since not only would our taxes be lower, the (lower end of the market) private prices are elevated by the fact that some people have managed to keep themselves on an NHS dentist’s list (though a significant number of people resort to the use of pliers for self-extraction).  Come to think of it, it’s a similar type of screw-up to the housing market, really.  I was removed by my previous dentist from his list in around 1998, for not going often enough!  I had a couple of extremely painful experiences at the next dentist I tried (on the second occasion she still hadn’t found the nerve after 5 local anaesthetic injections).  Once I found a good dentist, then, naturally, I stuck with him, even after I’d moved away from the area.  And, no, I’m not telling all and sundry who he is!

So this morning I rose bright and early (actually I could have had a lie in, because, as will become clear, it’s better to wait until the commuters have left the city), brushed, flossed, rinsed and made my way to Cambridge Station in good time to catch the 10:20 to London, the first train for which you can buy the cheapest tickets.  I stress that I arrived at the station in good time, since the queue for tickets at either machine or desk, was (as I’d expected) a good 5 minutes.  I mention this – it’s usual at Cambridge Station at many times of the week, with a minimum of a 5 minute waste of time to be expected on Saturday mornings and Friday afternoons, as well as, it seems, for the first cheap train of the day – because I’ve just had a look at the latest Passenger Focus report on value for money(!) on the UK’s trains.

Section 9, p.20 of the report suggests passengers should not have to queue for more than 3 minutes off-peak, 5 peak.  I can’t help noting that the peak/off-peak times make no sense for ticket sales, since most peak-time travellers are commuters with season tickets, so don’t need to buy a ticket.  Perhaps this explains what is evident at a glance from the Passenger Focus report, that the 3 minute off-peak target is achieved much less often than the 5 minute peak-time target.  The data looks a bit – how do I put it? – stupid.  I suggest they just have one target, 3 minutes.  And bring in some fines to make sure 3 minutes is actually achieved.  But what is also needed, it seems to me, is an edict that machines should be added to stations until there are no queues at them (as is the case in some European stations I know, den Haag Centraal, for instance).  Today, I used the multi-queue for the ticket desks at Cambridge Station (6 desks now, I acknowledge, in a rare, but insufficient improvement).  The point is, if you have to queue for a machine, you may wait for a long time behind someone having difficulty with the options (it’s not surprising that this happens, maybe some design of the screens is called for – just perhaps?), or the bloody thing may refuse your card.  And whatever you do, buy any complicated tickets from a real person at the counter!  The cost of the machines must be small compared to the value of the time passengers spend queuing.  And the marginal cost of each extra machine is even smaller – the cost to produce them is surely (like for other manufactures) mostly attributable to design, software, and tooling up for manufacture.  Queuing for machines!  They wouldn’t have believed you 50 years ago – it’s like a science fiction dystopia!  If there’s no queue, people will at least try to use a machine rather than what is the most expensive resource – the human ticket-seller.

Actually, I don’t think it’s cost that explains why there are uniformly too few machines in railway stations in the UK.  I’m beginning to wonder if it isn’t too difficult (or at least too much hassle) to deal with the inevitable consequence – a reduction in the number of ticket-counter staff – because of the militant RMT and other unions.

What I really wanted to write about (as I said before, you could write an essay about every train journey in the UK), though, is the exorbitant cost of the journey.  I used to buy One-day Travelcards – which include use of the tube and buses – when travelling to London, for the flexibility.  But, partly because of the new restriction that you cannot use the return portion of Off-peak (i.e. reasonably priced) tickets between 16:30 and 19:00 (though, unbelievably, if you buy a cheap ticket from London to Cambridge, you can use it at these times!), I now usually just buy returns to London, rush back rather than spend an hour or two in a museum or whatever, and use an Oyster card whilst there.

The last Off-peak Travelcard I bought from Cambridge to London (via King’s Cross) cost me £11.90.  But that was in 2008.  Today the price was £13.20, a 10.9% increase!  Frankly, this is getting ridiculous, as I’ll explain.

But first, let’s compare like with like.  Some years ago I wrote to Douglas Alexander, then Transport Secretary (there’ve been a few since then – does that tell you anything?), noting the rise in price of One-Day Off-peak Travelcards (with Network Card discount) from Cambridge to London.  I can now extend the series:

2003     £11.55

2004     £12.60     9.1% increase on previous year

2005     £13.85     9.9%

2006     £14.85     7.2%

2007     £15.20     2.4% (presumably lower because of the new afternoon restrictions)

2008     £15.85     4.3% (lulling us into a false sense of security)

2009     £17.50     10.4% (out of the blue – it’s a record!!)

Overall, in 6 years the ticket-price has risen by 51.5%!

In comparison, the ONS provides the latest RPI figure – 210.1 for January 2009.  It was 181.3 in January 2003 (I downloaded the table a while back).  That is, prices in general have only increased by 15.9%. The difference – 51.5% versus 15.9% – is, frankly, ridiculous.

That’s right.  Prices in general (RPI) have risen by 15.9%.  The train ticket I’ve relied on since I moved to Cambridge has gone up by 51.5%.  And the service has been seriously degraded by the introduction of the draconian restriction on when you can use the ticket to travel back to Cambridge – you have to return either too early to do anything in London in the afternoon, or too late to do anything in Cambridge in the evening (like eat at home at a normal time).

What really pisses me off, though, is that I think I know the reason for this injustice (besides RMT members’ belief that they have a God-given right to earn more than their work would merit in a different environment).  The point is that the franchise system in the UK works by awarding monopoly pricing power to the highest bidder.  The price to the franchisee in some regions is negative (i.e. some routes are subsidised), but for the franchise that includes Cambridge it is in the tens of millions of pounds per year (there’s no way to determine the value of the Cambridge route, and therein lies part of the problem).  The cost of the ticket therefore bears no relation to the cost of providing the service. This is a crime.  There is no mechanism – tragically, as there is even competition from Cambridge, you can travel a little more cheaply to Liverpool Street, though that happens to be usually way out of my way – for supply and demand to determine the correct price for the route.

The Passenger Focus report notes that the cost of tickets into London is higher than to other cities in the UK, yet there are more frequent services.  I found no real discussion of why this should be the case.  Have these people never heard of economies of scale?  If the market were functioning correctly (so that comparative prices reflect comparative costs), prices for travel into London would in all likelihood be considerably lower than to other cities.  Passengers in the busiest parts of the network are massively subsidising those in other areas.

The reason train travel into London is so expensive is, I suggest, because the market will stand it.  The train price reflects the cost (in money and time) of the alternatives.  Only the nobility can really afford to drive into London: you have to be stupidly brave, wealthy and have a lot of time on your hands.

The tragedy is, the rail network should be allowed to expand in the areas where a profit can be made.  There should be even more (e.g. fast, late night, early morning, every 15 minutes, not 30) services between Cambridge and London.  If parts of the network were allowed to grow, then, over time, the network as a whole would become more profitable.  The franchise system and consequent monopoly-pricing of rail tickets is one factor preventing the growth and modernisation of the UK railways.

As I said, it’s a crime.

I’ve skimmed through most of the latest Passenger Focus report.  There’s not a mention of the effect of the deeply flawed franchise system on ticket-pricing and hence value for money.  In fact, it reads like internal company market-research.  But of course, that’s what you’d expect from an organisation that appears to have no true independence from government.

Rather than sponsoring this flannel, the DfT should be getting its teeth into the task of making the rail franchise system work for passengers.

February 16, 2009

High-speed Professor goes off the rails

Filed under: Books/resources, Climate change, Coach, Global warming, Rail, Transport — Tim Joslin @ 5:32 pm

When someone says, literally, or in effect: “Listen to me, I’m a Professor”, be suspicious, very suspicious.  Because the truth is, Professors are just as likely as the rest of us to spout misleading garbage.  But their gibberish is more likely to be published, simply because the average editor thinks: “Letter from a Professor – must be worth a column inch or two!”  If you’re told it was written by a Professor, the chances are therefore higher than otherwise that what you are reading is poorly thought-through drivel.  Furthermore, having their output published more often provides the said Professors with the positive reinforcement that encourages them to submit for publication more material in the same vein as the rubbish that shouldn’t have been published in the first place.

I was therefore immediately sceptical when I read the last of an interesting clutch of letters in this morning’s Guardian on the topic of the UK’s procurement of new trains.  A Professor Lewis Lesley of Liverpool wrote:

“At £5.4m per carriage, these are the most expensive trains ever. For the same money, 30,000 high-speed luxury motorway coaches could be acquired, increasing the total size of the UK bus and coach fleet by 50%.”

I think he means that you could get 30,000 coaches for the £7.5bn cost of the whole order, not for £5.4m.  The order is for 1,400 train carriages, plus locomotives, so, including the cost of the locomotives (expensive, because they’re dual diesel/electric) one train carriage costs as much as around 21.5 coaches.  Hmm, maybe that’s not too unreasonable.

But, still, 5.4 million pounds – wow, that’s a lot of money!

Or is it?

Let’s assume, for ease of arithmetic, that the carriages seat 54 people each on an average trip (it’s probably more, since they’re filled like aeroplanes these days).  So that’s £100,000 per seat.  Wow, still a lot.

Wait a sec.  These carriages will be in service for decades.  Let’s just give them 20 years (they’re actually expected to last nearly twice as long as this, but, as you may have guessed by now, I like to make conservative estimates *).  Now we’re down to £5,000/seat/year.

See what I’m driving at?

Divide just once more and we see the cost is less than £15/seat/day over the 20 years.

And, of course, these trains can make, let’s say, two return trips (another conservative estimate) on one of the UK’s main lines every day.

So, for a single journey – London to Manchester, say – the portion of your ticket price needed to cover the investment in the rolling stock is at most a princely £3.75.

Think about that next time you shell out as much as £360 for a walk-on ticket, as the Guardian’s consumer champion reported on Saturday.

There was a reason why I scrutinised Professor Lewis Lesley’s “argument”.  I would much prefer a future where I am able to travel around the UK on high-speed trains than “high-speed luxury motorway coaches”.  This is a contradiction in terms: “luxury” and “coaches” do not belong together in the same sentence.  And virtually every vehicle on the UK’s roads is capable of exceeding the 70mph speed limit.  Only an idiot (or perhaps a Professor) would contemplate purchasing a fleet of coaches incapable of sustaining 70mph.  What the adjective “high-speed” is doing in the Professor’s sentence is therefore anyone’s guess.

Look, travelling by coach is an unpleasant experience.  That’s why, by and large, you find, proportionally-speaking, considerably more impoverished students on coaches and highly-paid Professors on trains.

It was when he started on the merits of promoting coach travel (in some unspecified way – presumably state diktat) that George Monbiot lost me in his (nevertheless worthwhile) book Heat.

Look, guys, if you’re going to get everyone out of their fossil-fuel powered cars and aeroplanes, then please, please provide an alternative vision that people can believe will improve their lives.  Heck, why not try to capture their imagination once in a while?  Because you’ll never get enough people to wear a hair-shirt.

Oh, and I agree with the Guardian’s correspondents who say we should be completing the electrification of the rail network, not buying diesel locomotives.  Getting rid of the need for dual-powered trains would also reduce the cost per carriage-seat even further, of course.

In fact, of course, the main costs of your rail (or coach) journey are fuel, staffing and maintenance of the infrastructure (not necessarily in that order), the last two of which are subject to economies of scale, so that the cost of rail travel should start to reduce if you can get the network into a dynamic of continued expansion of passenger numbers.  If the railways are run on renewable electricity, then in the long-run, the fuel cost will come down, because the cost of generating the energy will ultimately be subject to the scale economies of manufacturing.

Of course, the most significant cost to society of train or coach journeys is most likely the passengers’ time.  Perhaps this should be borne in mind by Professors making the recommendations on which Government transport policy is no doubt based.


* Another way of looking at this is that the cost of the capital (think of it as a mortgage) to pay for the carriages would be something of the order of 5% pa – another reason for choosing the figure of 20 years for the lifetime of the carriages.

December 12, 2008

Planely Sensible at the FT

Filed under: Aviation, Flying, Global warming, Rail, Transport — Tim Joslin @ 7:45 pm

A comment piece by Philip Stephens in the FT caught my eye today.

Some wise words, not least about the bad timing of the Stansted protest.  I noted it was a distraction from the (under-reported) Poznan talks.  It’s clear too that – as implied in Stephens’ article – the rejection of consumerism is likely to find more support in boom times than during a recession.

Stephens’ main argument, though, is that, in general: “Self-flagellation does not sell” (unless, of course, the customer is Max Mosley trying to set an example to the F1 teams by reducing his costs), and that: “The case must be framed as an opportunity rather than a burden.”  Indeed.

I do disagree on one point, though.  Stephens writes:

“The young campaigners at Stansted had a point. There is something odd about the British government’s twin commitments to lower carbon emissions and to promoting a headlong expansion of London’s several airports.” [The grammar is not mine!].

If we just stop building runways we’ll just end up with even more overcrowded airports, and all but the most affluent will be forced to fly at inconvenient times.

No, what Plane Stupid should be doing is renaming themselves to something like Train Crazy and relocating from Stansted to King’s Cross (for some reason Gerald the Gorilla comes to mind as I write this).  Perhaps they could all dress in sardine costumes, invite the TV cameras and see how many of them could cram into a carriage on the 17:15 to Cambridge on a Friday evening (returning the space to the travelling public before the train leaves, of course).  Maybe highlighting the dire state of the rail service – and showing a little consideration while about it – would garner a little more support than screwing up people’s holidays.

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