Confessions of a Political Animal

January 20, 2009

Liberal with the spin

Norman Baker MP

Norman Baker MP

Skimming through Guardian Online yesterday, I came across this doom-and-gloom article about rail franchise holders going cap-in-hand to Geoff Hoon, waving the threat of service cuts if the Department for Transport (DfT) doesn’t show some ‘flexibility’ (for which read slashing) in the premium payments that it will be demanding from many of them in the next financial year. This has come about as a result of falling growth in passenger numbers – note falling growth, not falling numbers – due to economic circumstances pertaining.

No-one is expecting the franchises  in question to cease to be profitable (only the most lucrative routes have to pay premiums – others receive subsidies): simply that the profit margins will be a bit less comfortable than their holders bargained for. Given this, my advice to Hoon would be to wave an offer back at the franchisees – if you don’t want to pay up, hand in the keys and a new National Rail will run the services, keeping all the profit for re-investment in the railways.

But this is all as an aside. What really caught my eye was the footnote to the article, headed:

Go further in Serbia

What could this possibly have to do with the UK’s railways, wondered the Animal? Well, reading on…

Off-peak rail fares are higher in Britain than anywhere else in Europe, the Liberal Democrats are to say today. They looked at “anytime” single rail tickets across Europe, and found that in Britain, £10 only takes travellers an average of 26 miles. […]The Lib Dem transport spokesman, Norman Baker, said: “In Serbia, £10 will take you almost the distance between London and the Swiss Alps while an English ticket will take you only as far as Basildon.”

Now, whenever anything emerges from the office of Mr Norman Baker MP – probably the only person in Parliament who thinks that anti-Saddam Iraqis  murdered David Kelly and who unaccountably holds the office of Lib Dem transport spokesperson – it needs to be looked at a little sceptically. Luckily, this one doesn’t require you to look too far.

Now, before anyone gets the wrong idea, the Animal holds no brief for the privatised rail companies, nor for the introduction of the profit motive into what I consider a core public service. Yes, British rail fares are high – often too high, but often not as high as a generally anti-rail media likes to make out withthe help of invalid comparisons. The removal of the need to provide share-holder value from the railways would allow for some reduction of fares, but assuming we want a nationalised or not-for-profit railway to make an overall surplus for re-investment, this would be a relatively limited margin. What does concern me is that the constant portrayal by the media – with the willing connivance of some politicians – of rail travel in the UK as being unaffordable, means that many people end up dismissing it out of hand as a potential travel mode, increasing the unnecessary use of more polluting road and air transport as a result.

And speaking of invalid comparisons, that made by the Liberal Democrats in their press release on this subject has to take the biscuit. Is Norman Baker really so naive as to expect that rail fares in the UK (5th highest GDP in the world, according to the IMF) will be comparable with those in Serbia (71st highest GDP in the world)? To portray the fact that rail travel in the UK costs substantially more than that in Serbia as some kind of national scandal is simply laughable. Worse, by failing to make more worthwhile comparisons (which I will seek to provide in a moment), Baker destroys his own, not entirely inaccurate, argument.

Let us, for a moment, compare the circumstances under which the British and Serbian railways operate. The Federation of European Employers provides a helpful comparison chart of national minimum wages across the continent. Since 1st January 2008, Serbian workers have been entitled to a minimum of 12,133.33 dinars gross per month. At today’s exchange rate, that amounts to £120.12. This compares to the UK minimum wage of £993.20 per month, a mere 8.3 times higher. If we assume that minimum wage rates are a good indicator of comparative wage rates at most levels, except perhaps the super-rich, we can pretty safely assume that the cost of employing a Serbian train driver, signalman or cleaner is around 8 times lower than their British equivalent. Is Mr Baker proposing a pay cut for railway staff of that magnitude in order to help equalise fares? If he is, I hope Bob Crow doesn’t know where he lives. And of course, higher labour costs feed into every other expenditure by the companies that make up the UK rail system.

And what of the service levels you get for your money? Sadly, my Serbian isn’t up to the task of searching out performance statistics for Zeleznice Srbije, if they even exist, but the anecdotal evidence from those who have travelled with them – herefor example – isn’t great when it comes to reliability, rolling stock quality, toilet acceptability or customer care. We have our issues with such things in Britain, but I’m prepared to bet it isn’t on the same scale.

Some things we can make quantitative comparisons on, however. According to Mr Baker

In Great Britain, £10 will only take you on average 26 miles [whilst] in Serbia, £10 provides 512 miles of rail travel. […] In Serbia, £10 will take you almost the distance between London and the Swiss Alps while an English ticket will take you only as far as Basildon.

So, let’s take a look at the Basildon claim. Basildon is, in fact, only 24½ miles from London Fenchurch Street but we’ll let that pass. Mr Baker’s fares, however, are out by a somewhat greater margin. The press release claims that

The research considers the cost of ‘Anytime’ single rail tickets across Europe[.]

Unfortunately for the researchers, the ‘Anytime’ single fare from London to Basildon is just £7.50, or 30.6p per mile. It also needs to be pointed out that in most of Europe (including, according to this page, Serbia), a return ticket is simply priced at 200% of the single fare. In Britain this isn’t the case, with the return portion effectively being much cheaper than the outward portion: obviously this hits those who purchase single tickets, but is of great benefit to travellers making return journeys – who I suspect represent the vast majority. There is a £7.60 return fare to Basildon, but as this is restricted in terms of the trains it can be used on, we’ll consider the ‘Anytime’ return, priced at £11.20, 22.9p per mile.

Now, I can’t get access to detailed Serbian fares, but I’m prepared to believe Mr Baker’s assertion that a 512 mile journey can be had for £10.00 in Serbia, making just under 2p per mile, around ten times the cost of the Basildon return: a little over the odds, but not that much in the context of the 8 times higher wages and other costs in the UK.

But again, we are comparing apples with pears. Short-distance fares, such as to Basildon, are always going to be more expensive on a per mile basis than long-distance fares: many overheads vary little regardless of the distance travelled. So, let’s try a slightly more comparable journey. London to Aberdeen is 523½ miles (which given Serbia is much smaller than the UK makes one wonder what the hypothetical 512 mile journey is), with an ‘Anytime’ single priced at £91, or 17.4p per mile: 8.7 times the Serbian fare. Taking return fares, the straightforward doubled fare in Serbia will mean that the 2p per mile stands. However, a London to Aberdeen ‘Anytime’ Return is priced at £124 for 1047 miles, bringing the cost per mile down to 11.8p, barely six times the Serbian fare.

Returning for a moment to the Basildon example, we should also consider the service levels that you get for your money. There are 79 services between Fenchurch Street and Basildon on a weekday, with the fastest services taking 30 minutes, an average of 49mph. It’s hard to find a Serbian equivalent of Basildon [insert joke here], but I plumped for Stara Pazova, a reasonable sized town situated 20½ miles from Beograd. Unlike Basildon, Stara Pazova benefits from being on one of the main lines out of the capital. It’s total service from Beograd: 14 trains per day, with the fastest taking 42 minutes, an average of just 29¼mph. Suddenly, British fares aren’t looking quite so extortionate after all.

That’s the problem you get if you start picking as your comparitor the most extreme possible example: on a little bit of examination, your whole analysis starts to look rather flawed. So how about some more apposite comparisons?

Whilst France may be our counterpart in terms of population, I think Germany’s rail network is a closer match to Britain’s than any other in Europe. Significantly better (most of the time), but with a relatively dense network across a large (by European standards) nation, favouring regular and often clock-face services. Germany and the UK are broadly comparable in terms of GDP (3rd and 5th ranked by the IMF in 2007); whilst Germany has no minimum wage, average earnings are of a similar magnitude – UK average earnings were 8.6% below those in Germany in 2007, although the weak pound will have increased this gap since.

Rail travel in Germany tends to be cheap in major urban areas (although not much below London Oyster Card levels), where there is normally significant municipal subsidy. However, on longer routes, the standard walk-up fares are remarkably expensive. To again use London to Aberdeen as our UK example, we can use the 505 mile Berlin to Freiburg in Breisgau (a lovely town, btw) journey as the comparison. The standard single fare for the German route is €127 (this excludes travel on a very small number of limited stop trains, use of which would push the fare to €138), which today comes to £117.67: 23.3p per mile, well above the 17.4p per mile for London to Aberdeen. And like Serbia, German return tickets are 200% of the single, making the return German fare per mile more than double its British equivalent. Figures like this rather bring into question exactly how the Lib Dems arrived at the statement that

rail travellers in Britain pay the most expensive rail fares in Europe.

The German railways, like Britain’s, do sell a range of heavily reduced advance purchase fares based on market demand – booking for a week’s time I can do Berlin – Freiburg for €59 (10.8p/mile) or London – Aberdeen for £48.50 (9.3p/mile), but in either case would be limited to a specific train – and Mr Baker isn’t interested in comparing these fares.

Now I’d expect to pay a bit more to travel by German railways – it’s trains are more frequent and reliable, whilst much of the rolling stock – especially the ICEs used on the Berlin-Freiburg route – are more comfortable and faster than anything in general UK squadron service. So surely the argument is not ‘Why aren’t UK rail fares at Serbian levels?’ but ‘Why don’t we provide German levels of service given we charge broadly comparable fares?’. The answer to that is complex, involving a toxic mixture of private profiteering, political will (or lack thereof), government subsidy (or lack thereof) and public attitudes towards public transport and spending on it. Norman Baker’s ludicrous claims obscure the real issues that need to be bashed out regarding the management of and strategy for the UK’s rail network and detract from the points where he is absolutely right, such as on Heathrow. As it stands, this press release isn’t worthy of being produced by a supposedly serious political party or being reproduced by a supposedly serious newspaper.


1 Comment »

  1. Good dispassionate analysis. These extreme, often trivial examples of inefficiency often completely obscure underlying structural problems with a service/project. This story also sadly demonstrates the willingness of political parties to promote utter lightweights and crackpots into positions of serious responsibility. Baker was a good backbencher but if this is the best he can come out with on the subject then he is clearly well out of his depth.

    Comment by Mycosis — January 21, 2009 @ 2:46 pm | Reply

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