Rail fares to rise as reforms threaten job cuts

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Rail passengers will face higher fares under radical reforms which would see ticket offices closed and reductions in on-board staff, according to leaked documents.

A Government study into improving efficiency and increasing capacity on the railways will find fares structures are too complex, illogical, over-subsidised and do not effectively manage peak demand, the documents show.

It will say the railways are subject to too much state involvement and a growth in services has not been matched by greater efficiencies.

The documents say costs are a “major problem” and need to be cut by 35 per cent to match European counterparts.

They set out plans to cut staff and propose decentralising or breaking-up Network Rail. They recommend loosening franchise terms to allow train operators to respond better to demand and lifting caps on fares.

Unions have threatened industrial action over the plans, which were drawn up by Sir Roy McNulty, the former chairman of the Civil Aviation Authority, under the Rail Value for Money review. The final report will be presented to ministers and published next month.

Sir Roy told the group: “Some fares [are] well below the level which [the] passenger would pay.”

His report will urge Ministers to review fares policy and allow train operators to “take a more commercial approach” to ticket prices by lifting caps on fares and removing saver tickets from long-distance services.

The present system is unfair, with differences in subsidies in different parts of the country, the documents said.

Staffing on trains and ticket offices could be “significantly reduced” using modern technology. British railway workers are better paid and less productive than their European counterparts and drivers’ contracts should be reviewed. But similar reforms on the London Underground by Mayor Boris Johnson has caused a wave of strikes.

A Rail Delivery Group will be set up by the industry to cut costs and make better use of existing capacity. It will call for train-operating companies to have longer franchises of up to 15 years.

The plans put the Government on collision course with rail unions, with whom poor relations were identified as a “barrier to efficiency” by the study.

Bob Crow, general secretary of the largest rail union, the RMT, said the proposals would be resisted.

He said: “The Government are clearing the tracks for a massive assault on rail jobs, ticket offices and drivers’ pay and conditions while the train operators are allowed to carry on robbing the network of hundreds of millions of pounds in profits and subsidies.

He added: “Industrial action is one of the weapons at our disposal and we will consider its use to defend our members’ jobs and the services they provide.”

Maria Eagle, the shadow Transport Secretary, said the plans were a “dangerous experiment” in breaking-up the rail infrastructure.

She added: “Yet more fragmentation isn’t the answer; neither should passengers be expected to take on yet more of the cost when they are already seeing household budgets squeezed by the eye-watering fare rises ordered by Ministers.”

But Philip Hammond, the Transport Secretary, said: “We’re very clear that the whole purpose of the McNulty Review over the medium term is to get a better deal for taxpayers and fare payers by reducing the cost of our railways.”

He said the Government recognises peak-time services are overcrowded and is building a high-speed network to triple capacity between London and Birmingham – a line many in the region want to see extended, as proposed, to Yorkshire.