Grant Shapps seeks to cut millions more rail fares Business

Rail usage has recovered somewhat from the depths of lockdown, but is still just 70% of pre-pandemic levels.

With no full rebound, transport officials had no choice but to pressure private rail operators to cut services to balance the books.

Whitehall sources said the sale of rail is an important test bed for proving that lower fares will increase demand. They hope to show that this will have a neutral effect on public finances as more people will travel, increasing revenue even though each fare is smaller.

The move could also pave the way for the removal of inflation-linked rate increases each year. With the surge in the retail price index, ticket prices will increase by 10% or more in 2023 unless the traditional link is broken.

Industry reforms proposed last year by former British Airways boss Keith Williams and Mr Shapps in an independent railway review ‘mean network-wide ticket sales will be able to happen more easily in the future,” the Department for Transport said.

A Whitehall source said: “There is an underlying love for the railways. We had to see how positively it landed.

Norman Baker, a former Liberal Democrat MP who served as Transport Minister in David Cameron’s coalition government, said: “There is always tension between the Transport Department and the Treasury. What I’ve known for days at the office.

‘The Department for Transport is busy promoting rail and the Treasury is trying to cut bills – it’s always been that way.

“Shapps’ room to maneuver is limited because the government is effectively bailing out all the railways.”

Mr Baker, a lobbyist for commuter group Campaign for Better Transport, called selling tickets a good first step but added: ‘It’s not enough’.

Jonathan Edwards, head of transport at consultancy GHD, said: “This is just one small step in the process of getting the rail sector back on track. For rail to return to solid commercial footing, the question of pricing must be addressed in the long term in order to increase passenger volumes.

“Consumers have long complained about the unaffordability of rail, and the numbers were starting to level off even before the pandemic started. For the industry to thrive, the public must begin to see trains again as a viable and attractive form of transportation. »