Oral evidence: Improving the rail passenger experience, HC 64Monday 6 June 2016
Oral evidence, 6 June 2016.
Witnesses
Tim Bellenger, Director, Policy and Investigation, London TravelWatch, Joanna Whittington, Chief Executive, Office of Rail and Road, Anthony Smith, Chief Executive, Transport Focus, and Alex Neill, Director of Policy, Campaigns and Communications, Which?, gave evidence.
Chair
Good afternoon and welcome to the Transport Select Committee. Would you give us your name and organisation, please?
Tim Bellenger
I am Tim Bellenger. I am director of policy and investigation at London TravelWatch.
Joanna Whittington
I am Joanna Whittington from the Office of Rail and Road.
Alex Neill
I am Alex Neill, Director of Policy and Campaigns at Which?
Anthony Smith
I am Anthony Smith from Transport Focus.
Chair
The national rail passenger survey is carried out twice yearly and surveys passenger satisfaction with a particular journey. The Which? passenger satisfaction survey is different. It is an annual survey and looks at views over the past 12 months. Do you think these different approaches bring out different information? What would you say are the strengths and weaknesses of each?
Anthony Smith
They are measuring slightly different things in slightly different ways. The national rail passenger survey is an official statistic. It has been running for almost 16 years. We are just approaching our millionth passenger. We ask about the journey they have just done. We do not ask about the railway or other things that are happening; we ask about that specific journey, which produces very rich information. The Which? survey produces, interestingly, roughly similar rankings for the train companies, but it is asking a different group of people about different things. I do not think they are exclusive; they are just different.
Chair
Ms Neill, what are the strengths of the Which? survey?
Alex Neill
In terms of our approach to the survey, we are looking for an overall measure. “In the past 12 months what has been your overall experience? What would be your score for that company? Would you recommend it to a friend?” It is a methodology that we use across other sectors and gives a quite rounded picture of people’s experience as a whole. For us, we feel that gives a better sense of people’s overall experiences. Clearly there are similarities that come out with both surveys. They are measuring slightly different things but they are both valid. What we see is that obviously our scores are different from Transport Focus but the groupings are broadly similar. Whoever is top in our survey is first or second in Transport Focus, so you do not really see big variations. The key themes that come through around people wanting clean trains that are on time and getting the right compensation if there is a problem are the same themes as in the Transport Focus survey.
Chair
Mr Bellenger, you have called for fuller information about the passenger experience. How do you think we should set about getting that?
Tim Bellenger
First of all, I would like to say that we use the NRPS survey in our work and we also look at the Which? survey and the latest emotional tracking things. They are all very good pieces of work and worthy of looking at, but some things fall through the net, as it were. For example, the NRPS does not have as many people from smaller stations. We have just done a piece of work on smaller stations, and 188 smaller stations are used by fewer than 1 million people a year in London. They carry 91 million passengers a year from them, yet the NRPS does not necessarily reflect those people because of the smaller sample numbers that come from those stations. Similarly, the NRPS is only published relating to the spring time and the autumn, whereas in the winter and summer times lots of people are travelling who would not normally be included in the NRPS, because they are going on holiday. We think having a wider spread of the times at which you do the surveying would give a much fuller picture of what is going on. In addition, as well as looking at those sorts of subjective measures, you need to look at some of the more objective measures of how a railway is performing. For example, a lot of companies use a quality incentive regime in their franchises and concession arrangements. You are looking at things like whether the customer information screen is working, whether there are posters at the station and whether staff are available. You can measure that directly rather than necessarily relying fully on the subjective elements—how passengers feel on the day.
Chair
There seems to be a lot of scepticism about information about operator performance. Do you think it is adequate, or how can it be changed?
Anthony Smith
From the work we have done, there is a very clear sense among passengers that the current way railway performance is measured—the key thing that passengers want when they are buying a ticket is to get the train on time—is lacking. That is the so-called public performance measure, which measures the train’s arrival between five and 10 minutes at its destination. Clearly that is nigh on useless to passengers because it does not record their own experience. Many passengers get off at stations in between, before the final part of the journey, and, of course, some passengers may well be early. They may catch a late running train and be early themselves. The move towards just publishing the so-called right-time information, which tells you when trains really arrive at all stations and getting that data out in the open, is a big cultural change that the industry needs to continue to embrace.
Chair
You are doing some work on tracking what is called “real-time emotional experience” for rail passengers. What is that?
Anthony Smith
To pick up the point Mr Bellenger made, the national rail passenger survey runs for about 20 weeks a year and captures about 65,000 passengers’ opinions about their last journey. We want to try to fill the gap between what the national rail passenger survey does and perhaps what social media sometimes provide in terms of more immediate feedback, so we have developed an app which we asked people to trial during the recent troubles at London Bridge, to record how they feel about a particular journey in addition to how they might rate the staff or the air-conditioning or whatever, and ranging from happy to frustrated. It paints a very interesting picture of how people feel about an individual journey. Commuting in London and the south-east is geared very much by two things, one of which—no great surprise—is punctuality. The second is crowding, the perception of crowding and the ability to get a seat and do something useful. What is interesting is that you can see that individual passengers are not angry the whole time. Their emotions change quite frequently over a period of time, but it is punctuality and crowding that sends people into the red zone of frustration or anger. When people get angry they get very angry. That is what we find recorded on Twitter in a sense—angry people telling you how angry they are. It is a very frustrating experience when you cannot get on the train or you cannot do anything useful on the train when you are crushed in so much. The issue of passenger numbers, which are increasing very fast, and the ability of investment to catch up with that, is going to be a key one going ahead for any Government.
Chair
What happens with the information that you have? You find out that people are angry, very angry, or very very angry. What happens next?
Anthony Smith
We feed that information back to the train companies. We feed it back to Network Rail. We are working with them to try radically to improve the quality of information during disruption.
Chair
Does it happen?
Anthony Smith
It is getting slightly better. It is nowhere near good enough, but the industry has an ability to snatch victory from the jaws of defeat. When things go wrong they can just get back some good will and trust in the industry by handling the disruption well, talking to people, giving them information and not having that dreadful silence when nothing is said at all, which we have all experienced.
Chair
What about overcrowding? That is one of the causes of anger.
Anthony Smith
Overcrowding is a very interesting issue. Sometimes it is caused by poor performance because a train is cancelled. Sometimes it is caused by short trains, eight cars rather than 12. Sometimes it is caused by the design of trains. On my local line, the way the trains are laid out internally makes them feel more crowded. The fact is that we have far more people trying to use the railway than it can probably currently cope with at peak times. How that is dealt with and how quickly that investment can be dug in is absolutely crucial.
Chair
Have you seen any changes in actual performance as a result of that work?
Anthony Smith
Yes. The rail industry is taking this much more seriously. Individual train companies and Network Rail are taking this more seriously, but the test is on the ground. The test is how staff react on the ground and what information is given out. London Underground has done that very well. It tends to give out information very quickly when something goes wrong. On the railways, in theory there is a two-minute rule. After a train has been stationary or there has been a delay for two minutes, something should be said, but I suspect we have all experienced it going quiet for a very long time. That is when passengers do not trust the industry. They are not being looked after, and if you have paid £5,500 for a season ticket somebody should tell you what is going on.
Robert Flello
It starts even before you make a journey. I have the great misfortune of having to use Euston station, or Useless station, as I generally refer to it. They have just spent a fortune on all manner of shops, yet the screens will not tell me when the train to Manchester is departing until about five minutes before it leaves, as though it is some huge massive secret. There is then a massive crush of people battling and fighting to get down to platform 14 or wherever it generally tends to go from at a particular time of day. In terms of feedback to the industry, that suggests to me that somebody is not listening. Is that your experience? If they can spend all that money on shops, yet not get right something simple like which platform your train is leaving from, then somebody is not listening.
Anthony Smith
It is intensely frustrating if you cannot be told the day before which platform your train is going to use. Passengers are rightly very unforgiving about that and the industry should do better. I remember going round Euston recently with somebody from Swiss Railways, who was absolutely mystified that passengers were treated in that way. He said, “How can you possibly do that? You have to tell people.”
Robert Flello
Is somebody not listening?
Anthony Smith
They are listening, but the complicating factor is the fact that the Government are specifying a lot of what is happening. The train companies are specifying some of what is happening. Network Rail is specifying other things. They are all working to different timescales. It seems to take an astonishingly long time to bring about change in the railways, and that is deeply frustrating.
Alex Neill
There are a lot of barriers in the way of the consumer and passenger voice in the railways. Overall, satisfaction is fairly low. Trust in the railways is pretty low. In fact, the railways sit down there with energy companies and car dealers. It is not a place you really want to be, so there is a long way up. In terms of getting the passenger voice in there, there are a number of issues—the whole arrangement of who is responsible, whether it is the regulator or the role of the Government. The fact that they operate many of the functions that you would normally see an economic regulator being in charge of is an issue. The complaints process is not backed by statute, so it is fairly difficult for people to make a complaint, and while Anthony and Consumer Focus will take on some things, the decisions are not binding. That does not help. The Consumer Rights Act does not apply at the moment. That is looking to be further delayed by the Government. Super-complaints cannot be brought by Passenger Focus, and in general there are other ways that consumers should be engaged. It should not just be through the survey work but around how you also get more qualitative views in, and how you can get the consumer voice further upstream and not just at the end. You need to get them into bigger decisions about franchising and other areas. The last point would be around enforcement action. The regulator should hold the train operating companies to account. Something is not getting through to those firms, so I think we need an approach that makes them think there are going to be consequences for failing to deliver for customers, as you would see in any other economic regulated market.
Chair
Ms Whittington, what is the role of the regulator?
Joanna Whittington
We have a number of roles in relation to the passenger experience. We are responsible for making sure that train operating companies provide passenger information, for complaints handling and for the provision of assistance. We are also the consumer law enforcer in relation to the retailing of tickets. In addition, perhaps what you know us best for is our role in relation to holding Network Rail to account for delivery of performance. Network Rail and all the train operating companies hold licences. If they breach those licences it is obviously open to us to take enforcement action when we think that is in the interests of passengers.
Chair
Who decides whether the licences have been breached? Is it you or the Department?
Joanna Whittington
It is us. We do that on the basis of a strategy towards passengers. The first thing we do when we put in place a licence condition is to be absolutely clear what our expectations are from the train operating company, usually through discussions with Transport Focus and other groups. That usually results in something like a code of practice and guidance—a document that sets out very clearly what we expect. The next thing we do is to put in place arrangements for monitoring against that framework. That might lead to audits, surveys and core data submissions to ourselves. Finally, we publish that information. The transparency piece is really important for two reasons. First, it will provide the evidence base for enforcement action, if that is what we think we should do. The other reason, which is important, is that it provides an incentive straight away on train operating companies to try to improve their behaviour. You will notice that, in the document we published last week in relation to measuring up, you are able to make those comparisons between train operating companies. It is not just about poor performance. We have also identified areas of best practice that we would like to see shared among train operating companies, for the benefit of passengers.
Tim Bellenger
One of the issues is the fact that the industry sees the DFT, and the ORR to an extent, as the proxy for passengers. Therefore, they gear themselves around performing to those organisations as a customer rather than actually looking at the customers themselves. They will do lots of things to make sure that they abide by their franchise, but a lot of those things may not necessarily be in the passenger interest. Whenever I meet train operators and I ask them to do a particular thing on behalf of passengers, quite often the response I get is, “Well, it is not in our franchise; sorry, we can’t do it.” If it is not in their franchise, of course the operators are not really going to be willing to do things, even though it might be in the interests of passengers and ultimately in their own interests.
Iain Stewart
Just to follow on from that, I would be interested in the comments of the panel about the mechanism for passengers being able to complain about a sudden change in service pattern and how that might then be acted on. To give you an example, in the last two or three weeks, Virgin West Coast have stopped Milton Keynes passengers using two evening peak services on a Thursday and Friday, because they want that space for longer distance passengers. London Midland services, although they have done their best to put on extra coaches, are absolutely rammed full. These are people who are paying well above £5,000 a year. There was no notification of this and no consultation; it just happened. I have not been able to identify a suitable mechanism for them as a body to complain and see if that can be acted upon. Is there one or, if there is not, what should there be?
Anthony Smith
I remember the original battle for Milton Keynes when Virgin stopped calling there in the morning when they were coming down to Euston and the anger that caused among passengers. The service pattern apparently changed and their voices could not really be heard. How the trade-offs are made between different passenger groups has to be much clearer. In Virgin’s case, they are a money-making operation. They are contributing to the Treasury. This is not a loss-making subsidy operation. It is a consumer experience and I think it should be much clearer how those decisions are being made, who the winners are, who the losers are and why it is happening. The railway is slowly moving into profit in places, and therefore it should become much more transparent about what is happening.
Alex Neill
This is where the rail sector could look at another sector—the water sector—in terms of how they have effectively been able to get the consumer voice into some of the decisions. They have done that by setting up what they call consumer challenge groups who challenge the decisions both of the regulator and of individual water companies. That can be around prices, or decisions they are making upstream. That has been really effective and it has shown in the water industry that companies have had to make decisions and change their decisions based on what their customers want. It is a model that could effectively be used in rail. Typically, it is a sector where the forces of competition are fairly weak and you need the regulator to step in to provide some incentives and, in some cases, penalties to put pressure on providers to do the right thing.
Joanna Whittington
One of the changes that has started to happen is in relation to the way that Network Rail structures itself. One of the things that we have seen and that we welcome is the move towards route-based score cards. Emphatically, the regulator is not the customer. One of the things the route-based score cards do is to reinforce the relationship between the route managing director and his customers, the train operating companies. In that process they have moved away from the traditional public performance measure as the main or only metric for incentivising improvements to performance. We have seen very specific things come in that work for a particular train operating company. CrossCountry in Birmingham wants a right-time measure, because it is no good being nine or 10 minutes late when the vast majority of your passengers depend on a connection. Nine minutes late is far too late, although it would not show up as that in the PPM. It is really important to try to find mechanisms that reinforce the relationship between the network provider and the train operating company as a proxy for the customer in the short term, and in the longer term look at some of the things that Ms Neill suggested in relation to consumer challenge and stakeholder engagement at route level.
Chair
You have suggested that engagement is better than enforcement. What is the evidence for that?
Joanna Whittington
We have already seen a number of things happen straight away as a result of our involvement. For example, on passenger information, website banners are clearly making a difference, informing passengers of disruption so that they do not accidentally book a ticket unaware of the fact that there is a temporary timetable the next day. On complaint handling, we have made sure that all websites are only two clicks away from the home page in order to make a complaint. In terms of provision of assistance, there is now a 24-hour booking period; you do not need to give more than 24 hours’ notice for booking. Straight away things are happening. I am not saying that we would not seek to enforce, but the important thing is to make sure that you do it from a clear evidence base, which is why the process I have described, of agreeing with the industry what our expectations are, monitoring against that and then using that evidence both to incentivise better performance today and to give us the ability to take action in future if we want to, is there. We do take action. With respect to Network Rail, we found them in breach of their licence condition last autumn and put in place a reparations fund to support improvements on the Southeastern route, and in particular to have additional station staff around at Network Rail managed stations.
Chair
You are not saying you will not enforce.
Joanna Whittington
Absolutely not.
Chair
Are you engaging on the basis that there will be enforcement if that is not reciprocated?
Joanna Whittington
Absolutely. That is why we are putting in place the evidence base, which facilitates enforcement if that is the route we have to go down but also has the advantage that it is driving improvement in behaviour straight away. That is the best way, as far as we are concerned.
Anthony Smith
On the point about the so-called route-based score cards, it is a step in the right direction. I worry though that a kind of cosy chat between Network Rail and the train companies is then accepted as the basis of passenger expectations for that route. Those systems have to be opened up to greater scrutiny so that passengers can see what is being done on their behalf. A train company may have six months of a franchise left. To a degree, why should they have any say about what happens on the route? It should be the passenger voice.
Huw Merriman
I will carry on with that strand, and perhaps this is a question for Ms Whittington. You talked about Network Rail and the enforcement action on the Southeastern line. The concern I have is that Network Rail can just decide that it wants to implement engineering works. There seems to be no check or balance on whether that is right or not. I have an example on the Hastings line. On Mondays and Tuesdays the line is shut for engineering works at 9 o’clock in the evening, and that’s it. If it was just for a limited period of time, it would make sense, because maybe they would need from nine all the way through the night, but in fact, they have just extended it for the rest of the year. As a regulator, are you able to say, “No, don’t do it that way. Do it for a little longer and do it all night”?
Joanna Whittington
One of the complicated things is balancing the interests of passengers today with the interests of future passengers. In order to protect the interests of future passengers, maintaining, renewing and enhancing the capacity of the railway is an important part of that. Inevitably, that means there will be disruptions, and they are extremely frustrating. There is an industry planning process that should allow good notice to be given and advance warning, so that people can make alternative arrangements, and indeed so that operators can make alternative arrangements. If that is not happening, in the first instance I need to speak to Network Rail and understand what the specifics are. It is possible that we could then take enforcement action, but my preference would be to take up your concern particularly with Network Rail to see whether there is an issue.
Huw Merriman
Perhaps I could dig a little deeper. In a way, that cannot have occurred there, because originally the plan was for this to just take place up to May. I could understand if it was so essential because you had a window and therefore you needed from nine all the way through the night, but it was done by May. Now they have just announced—I found out from a conductor—that this will occur for the rest of the year. They should have thought a little more laterally and said, “Hey, let’s take the rest of the year and just do it overnight.” Instead of that, they are doing it for the whole year at nine. That is the kind of thing that is maddening for passengers because, first, the communication is dire and, secondly, it does not make any logical sense whatsoever as to why their evenings should be disrupted because there is no end date for it anyway. I would like to know that the regulator has teeth to stop this before it occurs.
Joanna Whittington
Absolutely, which is why I am very happy to take away the particular concern you have and find out what the issues were that resulted in a significant change to the amount of time when they were taking possession to maintain and renew the network without the sort of advance warning that you would expect. As I say, I am happy to follow it up. In the specific, we would only take enforcement action if we felt, as a result of our intervention, that Network Rail was not then doing the right things. Where we tend to find enforcement action most effective is where there have not been plans in place to accommodate the sorts of things that passengers care about. Obviously there has been quite a lot of sensitivity, and the Committee has previously considered the issue, around the benefits or not of fining Network Rail. That is why our current view is that there is some role in relation to reparations, but our preference is to focus on making sure that they are doing the right things and to use the incentives through comparison at route level, which is what we will be able to do after the next periodic review of Network Rail, to provide a mechanism through which route managing directors are incentivised to improve their performance.
Huw Merriman
I want to ask a question in terms of your powers on franchising. As a daily commuter to this place, I use both Southeastern and Southern. As you will be aware, Southern has come in for a lot of criticism. Again, are you comfortable that you have sufficient powers in terms of the ultimate decision on the franchise? It has come into question as to whether that franchise needs to be changed.
Joanna Whittington
We have no powers in relation to the franchisee. We have responsibility for the regulation of Network Rail. Obviously some of the faults are Network Rail’s faults, so we will look very carefully at whether or not that should lead to enforcement action, but with respect to the franchisee that is not our responsibility.
Huw Merriman
In an ideal situation would you have those powers? The network only operates when Network Rail and the rail companies are all nicely interlinked. Surely a regulator should be interlinked in the same way.
Joanna Whittington
It is a matter for Government policy as to whether or not you want our role to change. I would say that the Department obviously plays a critical role as the franchising authority, in terms both of the letting of the franchise and of holding the franchisee to account for the delivery of the outputs in that agreement.
Chair
Does that mean that you have no control at all over the train operating companies?
Joanna Whittington
We license the train operators, but the large element of the passenger experience and the service quality that we are discussing today is codified in a franchise agreement and it is the responsibility of Government both to let that franchise and then to enforce it.
Chair
That means that you as the regulator have no involvement at all in the actual operation of the train services—
Joanna Whittington
No involvement at all. With respect to some of the areas that I have described previously in relation to passenger information, the provision of assistance and complaint handling, we have responsibilities there and we license the train operators, but where the franchise agreement already specifies what needs to be delivered in relation to, say, crowding, quality of service, frequency of service, timetabling provision and all that sort of thing, it is the responsibility of the franchising authority both to set the terms that they want to pay for and then to monitor delivery against that agreement.
Chair
You have no role at all when people are complaining about the way their train service is operating.
Joanna Whittington
I have a role in relation to making sure that the complaints handling policy is in place, but in terms of answering individual complaints in the first instance we would expect them to go to the train operating company and then to Transport Focus. It is the responsibility of Government as the franchising authority to hold the franchisees to account for delivery of what is in the agreement.
Chair
There has been long-running concern about the way ticket machines operate. There are numerous complaints and Passenger Focus did a study in 2010, but the problem is ongoing. There is confusion, with people not being able to get the cheapest tickets. People do not know what is available. There are different machines available with different facilities in different places. Who is responsible for doing something about that? Is it the regulator? No, I presume.
Joanna Whittington
We have some responsibility there as the consumer law enforcer.
Chair
What is your responsibility exactly in relation to that?
Joanna Whittington
Our responsibility is to ensure that passengers are not misled in the retailing of tickets.
Chair
What have you been able to do to ensure that?
Joanna Whittington
That is a good question. Ticket vending machines are clearly not as good as a ticket office. None the less they provide a good service for certain very specific things. For example, if you have ordered a ticket online and you want to collect it from a station, a ticket vending machine is a very good option from that point of view. Some progress is being made by train operating companies in terms of removing jargon from those machines so that people understand what they are buying.
Chair
But who is responsible for making sure that something happens? This is a long-running issue. There are numerous complaints all the time about confusion and misrepresentation and people not being given adequate information and proper choice. Everyone knows about it but nothing has happened. Do you as a regulator have the ability to do anything about it?
Joanna Whittington
We have seen some improvements as a result of the code of practice.
Chair
But do you have the ability to do anything about it? Who is responsible?
Joanna Whittington
The law that could potentially apply is consumer law.
Chair
Therefore who is responsible?
Joanna Whittington
In order for us to decide that enforcement action is the right thing to do, there are two things we need to look at. The first is the level of detriment being experienced by passengers, and the second is the work that the train operating companies are doing to address those concerns. We wrote to the train operating companies last year setting out our concerns in relation to the ticket vending machines. Our next step is to carry out audits in relation to ticket vending machines, and possibly some mystery shopping, which we would like to scope together with Transport Focus, to determine whether the detriment that passengers are experiencing and the progress that train operating companies are making in addressing those issues is sufficient. There is clearly—
Chair
But how long does it take to do that? The study that Passenger Focus did was in 2010. We are now in 2016 and the complaints are still there. How long will it take before you can decide whether something needs to be done?
Joanna Whittington
This is also linked to the franchise agreement, because some of the infrastructure changes that are necessary—for example, the purchase of new ticket machines that would have the more sophisticated systems that allow accurate information—need to be included in the franchise, and that is not our responsibility. As I say, our next step is to carry out audits and mystery shopping around the ticket vending machines to try to quantify the detriment. Research done by ATOC suggests that 19 out of 20 passengers are being provided with the right ticket as a result of purchasing from the vending machine. That survey was done on only a relatively small sample, and indeed 5% of passengers being mis-sold is potentially an issue in its own right.
Chair
How many people is 5% of passengers? It is a lot of people.
Joanna Whittington
It is a lot of people. The survey itself was only about 190 people. That is why I am expressing some scepticism. I would like to do our own research before we decide whether or not enforcement action against individual operators—it would not be against the industry—is the most effective way forward.
Chair
It is still entirely unclear to me when something is going to be done. You are talking about making assessments and weighing up what the detriment is, but this issue has been around for a long time. Mr Smith, when is something actually going to be done from the work that you and others have done?
Anthony Smith
I hope it will be soon, Chair, because I pity the poor passenger.
Chair
Having produced the information, what then happens to it?
Anthony Smith
We have produced the information. We have taken information to the train companies and to their trade organisations. We have taken information to Government, who are responsible for the franchises. We have taken information to the regulator. The passenger buys their ticket from the train company, so ultimately the train company and their agents such as the Trainline and others have the responsibility to make sure that passengers can make an informed decision. Choice is a great thing. We are a consumer organisation and we like choice. Choice can make sure that people get the right ticket, but it has to be an informed choice. At the moment, with things like ticket vending machines, the quality of the information printed on the ticket is totally substandard. What does “Any route permitted” mean, or “Not HS1”? What does all this gobbledegook mean? It is just dumped on the passenger, who is left to sort it out.
Chair
Who do you think is responsible?
Anthony Smith
The Government have to take a lead. There has to be a political lead so that it can be sorted out. The train companies and their trade associations have to get together to make an investment case and get the investment done. Ticket vending machines are yesterday’s technology. We are all wandering round with phones. That is where the investment should be made, which will provide the answers for a lot of passengers, particularly outside metropolitan areas. To a degree, London has cracked it with Oyster and contactless. It is pretty impressive and it is simple. People like the system and they trust the system. They trust the people behind it. We do not have that with rail ticketing at the moment. Passengers may be getting the right ticket, but do they feel they are getting the right ticket? I am not sure.
Chair
You are saying that London has the answer but the rest of the system hasn’t.
Anthony Smith
For metropolitan areas where you have a zonal system and a set ticket price and you know you are going to get the best price, the Oyster and contactless system is outstanding and gives passengers a tremendous amount of confidence.
Chair
You are saying that the structure in London provides the means to deal with issues like this.
Anthony Smith
For big metropolitan areas, yes. When you are travelling between London and Manchester, the cheapest advance ticket is £21.50. The open single is £166. I got my family to Manchester and back the other day for £60 for four of us by buying it from Virgin themselves. If you know what you are doing, it is great; if you don’t, you are in a jungle.
Tim Bellenger
The key is simplification of the fare structure. Ticket vending machines would not be complicated if you had a very simple fare structure. For example, Gatwick to London is one of the most complicated sets of fares you can imagine; there are probably about 40 different paper tickets you can buy. Since Oyster and contactless were introduced in January, they have gone from 11,000 transactions a week to 42,000 in just a number of weeks. A large number of those people are transferring directly from the vast plethora of paper tickets, even though the paper tickets are actually cheaper in a number of cases than the Oyster contactless version. It is the simplicity that really does it for people. What we would say is, yes, the Department needs to take responsibility for this. It needs to grasp the nettle of simplification, and it needs to look at all the different things there, and the experience of London. When London simplified the fares structure some people paid more, but a similar number paid less, and overall the market for travel grew much faster than was expected. In our evidence we said that a number of train operators, when the Oyster system was being extended into London, were very reluctant to do it because they thought there was a risk to their revenue. They insisted on lots of very complicated legal agreements to make sure that they did not lose out when Oyster was introduced on their networks. In fact, those agreements and the extra funding were never used because the amount of extra travel that was generated because people had confidence in the Oyster contactless system was so great that they actually gained from the system. My message is: let’s have some simplification please.
Chair
And that goes back to the Department.
Tim Bellenger
Yes.
Iain Stewart
I want to briefly put a similar question to you that I put to the previous panel on the role of National Rail Enquiries as a central point of information about all the different fares currently available. I agree that simplification is the way forward, but before we get there can National Rail Enquiries be a more useful one-stop shop to give people information about the whole variety of tickets available?
Tim Bellenger
I think the answer is yes because NRES is limited by the data it has. For example, if you are travelling within London, one of the issues we have with NRES is the fact that the Oyster or contactless fare is shown in very small print at the top of the web page. You are not really encouraged to go to look at that thing because what the operators want through NRES is that you click on the button at the right-hand side that says “Buy your ticket now,” whereas in fact you could have a better deal if you looked at the tiny little blue button at the top left and went with your contactless and Oyster card to the station.
Anthony Smith
Given the complexity of what they are trying to describe, I think the National Rail Enquiries Service does a reasonable job. There has been significant investment in it by the train industry over the years. The quality of the information is better and more reliable. It is better during disruption, but they are trying to do quite a complex job. Don’t forget of course that NRES is only one place where people get their information. The Trainline deals with a huge number of transactions each year. It is a private hedge fund company, and it is crucial that wherever passengers go they are getting the same advice.
Robert Flello
To pick up the point that my colleague Mr Merriman raised about a train that would normally be running late in the evening being suspended, a number of constituents have contacted me about the fact that the last train out of Useless station north to Stoke-on-Trent is at 9.40 or you can have a train at 11 o’clock that takes an extra hour. If you miss that and you are on the 11.30 train, you will have a journey of seven and a quarter hours until a quarter to seven the next morning. It is absolute nonsense. This is linking London to the north and major conurbations up to Manchester, yet it is an appalling service. My question is this. Is the reason why things are right—we are talking now about night-time services throughout London—because London has one overarching system, whereas, from what I have heard today, we have the ORR, the Government and various other associations and train operating companies? We have this mishmash of so many competing organisations but the one thing we do not have in all that is the consumer.
Alex Neill
To be fair to the ORR, they are operating with their hands tied behind their back in some cases. The Government are intervening in areas, and have jurisdiction for areas, that in normal economic regulation would sit with the regulator. It is a little bit muddled. There are lots of people involved. That does not help in terms of who is responsible for taking action on what. Obviously, in some cases some things are in the franchise that really ought to be a licence term. It should not be moving back 10 years to when you first did the agreement. The whole conversation about tickets nicely exemplifies that. As Anthony said when talking about ticket vending machines, that has gone. The future is in different ways of buying a ticket. That piece of paper should not be a piece of paper. There are some real issues with that. If you look at the powers and duties of the regulator, the first thing you should do is look at the fact that its primary duty is not very clearly the consumer. That is what you would see in any other economic regulator, and it should be clarified by the Government. That is something Which? has asked for. More generally, it has 23 powers and duties. That is a lot, and the first 10 are not prioritised. Again, that does not make it clear that the focus is protecting the consumer and standing up for them. It seems very odd, given that this is in some part a monopoly and there are weak forces of competition. You really need a regulator that sees itself as a consumer champion.
Martin Vickers
We have heard about the complexities of the ticketing system, both from yourselves and the previous panel. One thing that particularly annoys me is what is classed as peak and off-peak. Clearly, it is peak to get into London at seven or eight in the morning, but I often have to leave London at 6.30 or something to go to the constituency for a meeting. I get on a train that is 20% full at best, but I have to pay a premium on my off-peak return because I am travelling at peak time. I pay a supplement to travel on an empty train. Is peak time laid down somewhere in stone, or does somebody such as the regulator have the power to determine it?
Chair
Mr Smith, who decides? Are different times decided by different operators?
Anthony Smith
Don’t forget that one of the big differences between the railways and the water industry, for example, is that to a degree the Government still set the prices. Regulated fares exist for London and some other major areas, and for off-peak return tickets, although not for singles, which is a bit confusing. The Government are in there and in return for that they specify which are peak and which are non-peak. The Government have a role to play in that, but the problem is that you get a very sharp cliff going from peak to off-peak. A gentler cliff, where you could pay a little bit more to travel, perhaps on two or three extra trains, and have some subtlety in the system, would really help. At the moment it is very sharp, and if you get it wrong by one train you are £150 worse off. As a consumer, that seems like a very crude signal.
Chair
When you say that the Government have a role to play, what exactly do you mean? Who decides?
Anthony Smith
Clearly the Government will always have a role in the railway while taxpayers’ money is being invested in it, and that is quite proper. Somebody has to make the decisions about where that taxpayer money, especially for future investment, is being spent. Government will always want to have a role in that, but increasingly passengers are paying the running costs of the railway themselves. Therefore, as I said before, there should be a much greater passenger voice in how those decisions are made, and in how investment is made.
Chair
But when decisions are taken for specific train companies, who decides how peak times are defined?
Anthony Smith
By and large, the Department for Transport through the franchise system. That is what they are buying from the train company.
Chair
It is in the hands of the Department.
Anthony Smith
Yes.
Martin Vickers
That reflects what we have been hearing all afternoon. The heavy hand of the Department plays too key a role, and the voice of the passenger is lost. It is probably unfair to ask Ms Whittington this, but perhaps the other three witnesses would like to say whether they think the regulator should have a more powerful role and a more passenger-orientated voice, or should there be some other body?
Alex Neill
I have mentioned it a few times. Absolutely; for me, there are a number of ways that the powers and the role of the regulator should be increased. They should be given a clear mandate to say they are there to protect the consumer and not the user of the railway, which could be all sorts of other people. That leads to lots of conflicting things. It does not mean that other considerations are not taken into account. As with any other economic regulator, they would need to have regard to the economic stability of the railways’ future infrastructure, to safety and all the rest of it, but I think that change would help. At the moment, the interference from Government is set in the powers as well, so stripping that back to what is appropriate and what you see elsewhere would be clearer. In relation to enforcement and taking action, if it was much clearer who was responsible, as opposed to a fog between various people, that would allow either the Government or ourselves and other bodies clearly to place pressure where it should go—and obviously consumers as well.
Chair
I will ask the regulator. What powers would you like to have? Here is your opportunity.
Joanna Whittington
I would start by saying that it is clearly a matter for Government to decide what our responsibilities are. I do not think I accept the point that there is a fog over enforcement. It is very clear that in relation to both consumer law on the retailing of tickets and anything to do with licence enforcement that is absolutely a matter for a regulator to decide. Regulators have very specific ways of operating. We are very keen on creating an evidence base, socialising that, trying to drive improvement and taking enforcement action only at the very end of the process, but that does not mean that we are not extremely busy trying to make things better for the consumer. I really do not like the idea that we are not consumer focused. I agree that 24 statutory duties are quite a handful, but if you look at them, broadly speaking, they are different dimensions of the public interest, or the passenger interest. I am not sure how much difference it would make to give us a primary duty to protect the interests of consumers without simultaneously changing other elements of the piece.
Tim Bellenger
London TravelWatch would support a much stronger regulator. We said so in a recent response to the ORR and DFT review of ORR. We think that there is a greater role that could be carried out, certainly in performance. To take an example from the water industry, a group of people in my local area found that Thames Water were not responding to consumer concerns about a long-standing leak. We were then able to take it up through the regulator. Because Thames Water failed so badly in dealing with consumer concerns, the regulator was able to give an instruction to Thames Water, “This is what you will do to rectify things.” We certainly think that a wider and stronger role for the ORR would help to improve performance in that regard.
Chair
Are there any further questions?
Robert Flello
I would like to put on record that the Virgin Trains staff do an outstanding job. It is only a shame that some of the organisations themselves do not do a better job.
Iain Stewart
There’s your free upgrade.
Chair
On that note, we will conclude. Thank you all very much. Oral evidence: Improving the rail passenger experience, HC 64 21