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| MPs urge rail franchise reforms | MPs urge rail franchise reforms |
| (31 minutes later) | |
| The rail franchise system is "a muddle" which allows train companies to "take advantage" of passengers and needs reform, a report by MPs has warned. | The rail franchise system is "a muddle" which allows train companies to "take advantage" of passengers and needs reform, a report by MPs has warned. |
| The Commons transport committee said operators were making profits in good times but forcing the government to step in when revenues fall. | The Commons transport committee said operators were making profits in good times but forcing the government to step in when revenues fall. |
| It wants the government to offer longer franchises to encourage companies to invest in their services. | It wants the government to offer longer franchises to encourage companies to invest in their services. |
| The report also urged the government to run East Coast trains itself. | The report also urged the government to run East Coast trains itself. |
| It said nationalisation could be a way of comparing the performance of the public and private sectors. | It said nationalisation could be a way of comparing the performance of the public and private sectors. |
| The report also found operators had exploited a loophole to charge "unacceptable" fare rises at up to 11% above inflation. | The report also found operators had exploited a loophole to charge "unacceptable" fare rises at up to 11% above inflation. |
| Passengers had to go to "extraordinary lengths" to get cheap fares and that fares had risen out of all proportion to the rest of the economy, it said. | Passengers had to go to "extraordinary lengths" to get cheap fares and that fares had risen out of all proportion to the rest of the economy, it said. |
| Tighter rules will now tie all prices to inflation plus 1% - resulting in cheaper fares by next January. | Tighter rules will now tie all prices to inflation plus 1% - resulting in cheaper fares by next January. |
| The franchise mess is beyond reform and the only real solution is a return to public ownership of railways Bob Crow,RMT general secretary | The franchise mess is beyond reform and the only real solution is a return to public ownership of railways Bob Crow,RMT general secretary |
| The committee's Labour chairwoman Louise Ellman said: "The fare rises we saw this year were excessive. | The committee's Labour chairwoman Louise Ellman said: "The fare rises we saw this year were excessive. |
| "Companies cream off profits in good times, but leave passengers to pick up the bill when hard times hit." | "Companies cream off profits in good times, but leave passengers to pick up the bill when hard times hit." |
| The report found the current structure had allowed rail operators to hike-up prices at the worst possible moment. | The report found the current structure had allowed rail operators to hike-up prices at the worst possible moment. |
| But Mrs Ellman said the price formula that allowed companies to take advantage in 2009 would remain in 2010 - when changed economic conditions should have the opposite effect. | But Mrs Ellman said the price formula that allowed companies to take advantage in 2009 would remain in 2010 - when changed economic conditions should have the opposite effect. |
| Transport Secretary Lord Adonis has now closed a loophole which allowed train companies to increase prices of certain journeys if average fares remained within rules. | Transport Secretary Lord Adonis has now closed a loophole which allowed train companies to increase prices of certain journeys if average fares remained within rules. |
| Mrs Ellman said: "We are pleased Lord Adonis has decided to tighten the rules and to hold firm in face of pressure from operators. | Mrs Ellman said: "We are pleased Lord Adonis has decided to tighten the rules and to hold firm in face of pressure from operators. |
| 'High profile failure' | 'High profile failure' |
| "The system which allowed unreasonable fare rises this year will be kept in place next year when it will be disadvantageous to train operators." | "The system which allowed unreasonable fare rises this year will be kept in place next year when it will be disadvantageous to train operators." |
| However, the Association of Train Operating Companies said more than four-fifths of passengers travelled on discounted tickets. | However, the Association of Train Operating Companies said more than four-fifths of passengers travelled on discounted tickets. |
| The MPs pointed to the "high profile failure" of operators GNER and National Express as evidence of underlying problems. | The MPs pointed to the "high profile failure" of operators GNER and National Express as evidence of underlying problems. |
| Bob Crow, general secretary of the RMT union, said: "This report exposes the chaos of the franchise system. | Bob Crow, general secretary of the RMT union, said: "This report exposes the chaos of the franchise system. |
| "The franchise mess is beyond reform and the only real solution is a return to public ownership of railways." | "The franchise mess is beyond reform and the only real solution is a return to public ownership of railways." |
| Peter White, professor of public transport systems at the University of Westminster, told the BBC that franchising was a delicate balancing act. | Peter White, professor of public transport systems at the University of Westminster, told the BBC that franchising was a delicate balancing act. |
| "If franchises were awarded for a longer period of time, that could have substantial benefits," he said. | "If franchises were awarded for a longer period of time, that could have substantial benefits," he said. |
| "For example, they could invest in improved ticketing systems such as smartcards. | "For example, they could invest in improved ticketing systems such as smartcards. |
| "But the problem is that if you've made a long-term franchise commitment and the company runs into difficulty, you must have some means of curtailing that franchise over a shorter period." | "But the problem is that if you've made a long-term franchise commitment and the company runs into difficulty, you must have some means of curtailing that franchise over a shorter period." |
| Lord Adonis said reforms to improve the rail franchising system were being considered - including longer franchises. | Lord Adonis said reforms to improve the rail franchising system were being considered - including longer franchises. |
| The "risks and rewards" of the rail industry are shared between operators and the government, he said. | The "risks and rewards" of the rail industry are shared between operators and the government, he said. |
| He said: "When the rail franchising system was examined by the National Audit Office last year they found that it was delivering good value for money, and steadily improving services. | He said: "When the rail franchising system was examined by the National Audit Office last year they found that it was delivering good value for money, and steadily improving services. |
| "The government will consider the committee's report and respond fully in due course." | "The government will consider the committee's report and respond fully in due course." |
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