Problem Based Learning

For the last four years, the start of the New Year has brought increases in rail fares in the UK. Many train companies increased their fares by more than inflation. In November 2007, inflation in the UK was 2.7%; train fares rose by between 4 and 7.3%. Train tickets fall into two categories, regulated and unregulated tickets. Regulated tickets have their prices monitored by the Department of Transport and make up around 40% of all tickets sold. These rose by around 4% whilst the unregulated tickets are the ones that rose by up to 7.3%.

When the railways were privatised in the 1990s, one of the reasons cited was to improve efficiency and quality of the service. Some regulation of the industry was deemed necessary, given the fact that there was a potential for firms to exercise monopoly power. The railway has become more popular but the increase in demand has not necessarily been due to any improvement in the quality of the service provided. Changes in lifestyle, changing working practices and a general improvement in the economy are all thought to be factors that have led to the rise in train travel.

Where next for the UK rail network? Are price rises above inflation part of the answer? Copyright: A Syed, from stock.xchng.

Getting people off the roads and onto trains to help reduce road congestion has been a priority of the government, but some are wondering how price rises in excess of inflation for the fourth year running are contributing to this. Some argue that the aim of such fare increases is merely to satisfy shareholders, and so are unjustified. Train operating companies point out that they need increasing incomes to be able to further invest in improving services. Plans to invest in longer trains, longer platforms and other ways of increasing capacity seem to be at the heart of their plans.