Huw Merriman: Repay passengers without further delay

The mechanism for claiming refunds for delays and cancellations is complex and cumbersome. As we found with Ryanair, the rules are not always explained correctly – or explained at all – to passengers.

This comes at a time when innovation in technology should be lessening the need for passenger administration and red tape. Let me use rail and flights as examples, although this Bill would also apply to trams, ferries and other paid modes of transport.

I declare my current interest as a 12-year veteran of the daily commute from East Sussex to London. Nearly 67 million rail journeys last year were either cancelled or were significantly late. These delays can lead to lost output, financial hardship and stress. Passengers expect adequate compensation. To implement this fully would incentivise the train operators and Network Rail to do more to prevent these issues from occurring in the first place. This would, in turn, increase our nation’s productivity.

A number of steps have been taken in the past year, including the strengthening of the Consumer Rights Act 2015 and the introduction of Delay Repay 15 for Southern and new franchises, but only a third of rail passengers who are owed compensation make a claim. Network Rail currently makes payments to train operators for all the delays that it has caused through track and infrastructure failures.

However, if only a third of the passengers who experience the delay claim for it, the remainder must be retained by the train operators. My Bill would require the train operators to ring-fence this excess so that it could be used only to advance technology that would allow every passenger to touch on, and off, their train. Having pre-registered account details, the passenger would automatically receive compensation in their bank account on the day they were inconvenienced.

Six of the 27 train operators have some form of automatic compensation for certain passengers. Among the six, I understand that Virgin Trains West Coast offers it to passengers who book directly, and that Govia Thameslink, via its three operators, and c2c, offer automatic compensation to season ticket-holders.

Providing compensation as some sort of perk to certain classes of ticket-holders is missing the point, and distorts competition in the ticket-buying market. Every passenger is entitled to compensation. If the technology exists, it must be applied to all. Where compensation is not going to the ​passenger, the taxpayer-funded compensation coming from Network Rail must be used by all train operators to get us to a place where compensation is automatically delivered to every passenger so entitled.

Let me now turn to flights. The situation is arguably worse with airlines, as the recent debacle at Ryanair demonstrated, with 2,100 flights being cancelled and 315,000 passengers of Ryanair being left completely out of pocket. However, the company’s website failed to mention the word “compensation”, stating only that it would comply with EU regulation 261/2004. Unless passengers happen to be experts in EU regulations, they will not realise that this rule-set provides compensation and assistance to passengers in the event of denied boarding, cancellation, delays and downgrading when flying. The Civil Aviation Authority had to threaten enforcement proceedings before Ryanair informed its customers of their compensation rights.

This is not new ground for the CAA. In the last six years, it has successfully taken action against a number of airlines, including Ryanair, for a range of issues including non-payment of compensation and providing limited information to passengers. All of this can be avoided. It must be possible to put the onus on the airline to calculate compensation and credit it automatically. For security reasons, every airline must know which flight a passenger is booked on, and know whether that flight has been delayed or cancelled. They also know a passenger’s account details, or can find them via the flight booking agency.

It is time for those responsible for the passenger to give something back without further work for the passenger.

Huw Merriman is a Conservative MP who introduced the Automatic Travel Compensation Bill to Parliament. This is an edited version.