Everything you know about British train fares is wrong

The good old days. Image: Getty.

Editor’s note: This article dates from 2015. We repromote it every year because that’s how we roll.

Railways are complicated. Their mechanical complexity required the invention of the modern engineering profession to stop them from killing people (mostly). Just as importantly, their business complexity required the invention of the modern accounting profession to stop them from going bust (mostly).

A century and a half on, and many mergers, nationalisations, privatisations and re-nationalisations later, railway finance remains hard to follow. So when fares go up, you generally get to read misleading, knocked-together copy about how fares today are unreasonable and outrageous, how everything is better in other countries, and how everything used to be much nicer in the old days.

The blame for the sky having fallen varies with the publication’s bias. The Guardian blames privatisation and profiteers; the Telegraph blames regulation and bureaucrats. Both are almost entirely wrong.

Charging by use, not by set price

The very worst reporting on the cost of rail involves a cherry-picked comparison of particular journeys, where a foreign ticket is compared to the most expensive available walk-up UK ticket for a long-distance journey. This allows the Telegraph to pretend a ticket from London to Bristol costs £96.50, compared to £29 for the similar distance from Marseille to Nice.

In fact, a morning peak ticket from London to Bristol booked a day in advance costs £42.50, and an off-peak ticket booked a couple of weeks in advance costs £18. Newspapers run the same trick when they compare walk-up rail fares to advance-booked plane fares, which should amuse anyone who’s ever tried to buy a walk-up plane fare.

Look more closely, and you’ll find that UK long-distance and regional train fares are on a par with other high-income countries; the only exceptions are expensive peak-time walk-up tickets. In other words, the UK is better at yield management, selling cheap tickets on empty trains and expensive ones on full trains.

Who pays the piper?

The data required for a proper comparison is available, but is also confusing. To keep things simple, we’ll use data for England here (funding regimes in Northern Ireland, Wales and Scotland are different, reporting isn’t always consistent, and England makes up over 90 per cent of total spending).

In 2013-14, trains in England were subsidised to the tune of £2.3bn. That number is the subsidy that the government pays directly to publicly-owned track operator Network Rail (£2.9bn), minus the premium that train operators pay the government for the right to operate (£616m).

Passengers in England paid £7.1bn in fares in 2012-13. The 2013-14 data is not yet available, but if we assume there was no increase in fares paid, that would mean that total rail funding was at least £9.4bn.

So 24 per cent of the cost of running the rail network in England in 2014 was paid by taxpayers, and the remaining 76 per cent was paid for by train fares. This compares to 2010-11, when 36 per cent of the cost was paid by taxpayers and 64 per cent out of train fares.

In other words, the amount by which the state is subsidising the rail network is falling. The subsidy is also far less than is paid elsewhere. In New York City, taxpayers pay 44 per cent of the rail system’s operating cost. In Montreal, Canada, it’s 43 per cent, while in Sydney, Australia it’s 80 per cent.

In 2012, German rail consultants Civity carried out a study for the UK’s Office of Rail Regulation. That confirmed that the level of subsidy for Great Britain (including Wales and Scotland but not Northern Ireland) was low compared to other western European countries, particularly for commuters:

Percentage of train operating company revenues from taxpayer grants

Commuters pay a lot, but they still come

So commuter train fares in England are more expensive than those elsewhere. The pro-austerity coalition government has made deliberate and conscious policy decisions that reduce the amount that taxpayers pay towards the railways, and increase the amount that passengers pay.

The drive to cut subsidy has been concentrated on high-demand commuter services. Regional passengers get a good deal by international standards; so do long-distance passengers, so long as they’ve bought their ticket in advance.

Whether that’s a good way to structure things is very much open to personal taste. There is plenty of research to suggest that greater rail usage has benefits for society at large. On the other hand, rail usage in the UK has grown by 70 per cent since 1995 and by 9 per cent from 2010 to 2012 despite rising prices; most of this growth has been among commuters. In other words, as much as people grumble about lower rail subsidy and higher fares in the UK, they aren’t actually putting many people off.


But what about the privateers?

A final common complaint about the railways is that the train operating companies remove significant amounts of money from the system in dividends. You’ll be shocked to hear that this isn’t true either.

Train operators in England made a total profit of £250m in 2012-13. That’s about a 3 per cent margin on the industry’s revenue. By way of comparison, supermarkets make a revenue margin or about 6 per cent; Apple makes 40 per cent.

The upshot of all this is that, if we were to keep the subsidy at the same rate, eliminate operators’ profits tomorrow, and pass all the money saved straight onto commuters, it would lead to a cut in rail fares of 4 per cent. Once.

That’s even if you accept the case that train operators are useless parasites with the tendering process providing no benefits over recreating British Rail in-house, and if you assume that the process of restructuring would be cost-free.  That’s a pretty bold set of assumptions to make for the sake of a one-off 4 per cent cut in your ticket.

Rail subsidies are complicated, analysing things is difficult, and hacks are lazy: it’s no surprise that most commentary on the relative value of UK rail fares should be worthless. But, if you do the analysis properly, it turns out that when fares are higher, there’s a good reason for it: people don’t like paying tax.

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The mountain in North Wales that tried to stop the UK’s blackout

Elidir Fawr, the mountain in question. Image: Jem Collins.

Last Friday, the UK’s National Grid turned to mush. Not the official term perhaps, but an accurate one after nearly one million people were left without power across the country, with hundreds more stranded at train stations – or even on trains (which isn’t nearly as fun as it might immediately sound). 

Traffic lights stopped working, back-up power failed in hospitals, and business secretary Andrea Leadsom launched an investigation into exactly what happened. So far though, the long and short of it is that a gas-fired power station in Bedfordshire failed just before 5 o’clock, followed just two minutes later by Hornsea offshore wind farm. 

However, amid the resulting chaos and inevitable search to find someone to blame for the outage, a set of mountains (yes, mountains) in North Wales were working extremely hard to keep the lights on.

From the outside, Elidir Fawr, doesn’t scream power generation. Sitting across from the slightly better known Mount Snowdon, it actually seems quite passive. After all, it is a mountain, and the last slate quarry in the area closed in 1969.

At a push, you’d probably guess the buildings at the base of the mountain were something to do with the area’s industrial past, mostly thanks to the blasting scars on its side, as I did when I first walked past last Saturday. 

But, buried deep into Elidir Fawr is the ability to generate an astounding 1,728 megawatts of electricity – enough to power 2.5 million homes, more than the entire population of the Liverpool region. And the plant is capable of running for five hours.

Dubbed by locals at the ‘Electric Mountain’, Dinorwig Power Station, is made up of 16km of underground tunnels (complete with their own traffic light system), in an excavation which could easily house St Paul’s Cathedral.

Instead, it’s home to six reversible pumps/turbines which are capable of reaching full capacity in just 16 seconds. Which is probably best, as Londoners would miss the view.

‘A Back-Up Facility for The National Grid’

And, just as it often is, the Electric Mountain was called into action on Friday. A spokesperson for First Hydro Company, which owns the generators at Dinorwig, and the slightly smaller Ffestiniog, both in Snowdonia, confirmed that last Friday they’d been asked to start generating by the National Grid.

But just how does a mountain help to ease the effects of a blackout? Or as it’s more regularly used, when there’s a surge in demand for electricity – most commonly when we all pop the kettle on at half-time during the World Cup, scientifically known as TV pick-up.

The answer lies in the lakes at both the top and bottom of Elidir Fawr. Marchlyn Mawr, at the top of the mountain, houses an incredible 7 million tonnes of water, which can be fed down through the mountain to the lake at the bottom, Llyn Peris, generating electricity as it goes.


“Pumped storage technology enables dynamic response electricity production – ofering a critical back-up facility during periods of mismatched supply and demand on the national grid system,” First Hydro Company explains.

The tech works essentially the same way as conventional hydro power – or if you want to be retro, a spruced up waterwheel. When the plant releases water from the upper reservoir, as well as having gravity on their side (the lakes are half a kilometre apart vertically) the water shafts become smaller and smaller, further ramping up the pressure. 

This, in turn, spins the turbines which are linked to the generators, with valves regulating the water flow. Unlike traditional UK power stations, which can take hours to get to full capacity, at Dinorwig it’s a matter of 16 seconds from a cold start, or as little as five if the plant is on standby.

And, designed with the UK’s 50hz frequency in mind, the generator is also built to shut off quickly and avoid overloading the network. Despite the immense water pressure, the valves are able to close off the supply within just 20 seconds. 

At night, the same thing simply happens in reverse, as low-cost, surplus energy from the grid is used to pump the water back up to where it came from, ready for another day of hectic TV scheduling. Or blackouts, take your pick.

Completed in 1984, the power station was the product of a decade of work, and the largest civil engineering project commissioned at the time – and it remains one of Europe’s largest manmade caverns. Not that you’d know it from the outside. And really, if we’ve learned anything from this, it’s that looks can be deceiving, and that mountains can actually be really damn good at making electricity. 

Jem Collins is a digital journalist and editor whose work focuses on human rights, rural stories and careers. She’s the founder and editor of Journo Resources, and you can also find her tweeting @Jem_Collins.