Fare Britannia: a new approach to public transport ticketing for the UK

Executive summary

Increasingly, across Europe, a new way to pay for travel by train is available. In place of individual tickets, travel by rail – indeed on public transport across whole countries – can be paid for on a subscription basis, through a monthly account.

It’s a payment approach familiar today to many people who have similar arrangements for mobile phone usage and for streaming services. It offers the great advantage of simplicity and – in the case of rail – it signals an end to separate charges for each and every journey.

Travel in Great Britain by train today

This is in stark contrast to the UK’s current rail fares system which is overly complex. So much so that people have little trust in being able to obtain the cheapest ticket. To an unknowable extent, this unwanted (and costly) complexity deters people from travelling by train.

There are exceptions, however, and an extremely important case is London, where the fare system has evolved into an automated Pay-As-You-Go (PAYG) system. This has entailed significant investment in ticket gate systems over the years, and has so far proven impossible to emulate in other city regions because of high capital investment costs.

So it is worth asking if this new approach for paying for rail (and public transport travel) could be adopted in Great Britain. This report sets out to answer that question.

The birth of Climate Card

Launched in Austria in October 2021, the new way of paying for train travel through subscription was called Climate Card. The aim was to encourage people to switch to more energy efficient forms of transport, and be less reliant on the use of cars. Germany followed suit, and there are also now applications in Hungary, France and Portugal. It is a growing phenomenon.

With a price set at €49/month, Climate Cards have attracted significant increases in rail use. Discounts on this price level include lower rates for the elderly, for young travellers, and these can be extended to job-seekers, and armed forces and so on.

Learnings from abroad

There is much to admire, and some key lessons to learn. Four points stand out:

• A substantial increase in rail use can be expected. In Germany rail use has increased by 28%, and there is evidence that a similar uplift could be expected in Great Britain The UK rail system has around 10% spare capacity overall, and capacity could be increased further in key areas through measures like improved timetabling and running more carriages per train. (indeed, a similar level of increase was experienced with the introduction of London’s Travelcard).
• With a fall in the price of each journey, total revenues may decline.
• By excluding some types of train travel, adverse revenue impacts can be contained. The Deutschland Ticket cannot be used on German inter-city or high speed services. The initial offering in France in 2024 is not available for journeys to/from/in the Greater Paris region, is only for two summer months and is also restricted to availability for young travellers only.
• Care needs to be taken in establishing revenue allocation systems, to ensure that authorities with devolved transport funding arrangements are treated fairly as partners to the endeavour.

For an application in Great Britain, we can learn from experience elsewhere and define an approach best suited to our national needs.

Options and the right approach for Great Britain

Three possible approaches were compared for charging through a subscription-based approach in Great Britain:

• Zonal (in effect a nationwide extension of the London system).
• Per mile travelled.
• Monthly rate.

The conclusion reached is that a monthly flat rate – as adopted in Germany and elsewhere – is the best approach.

We call this approach Fare Britannia. Its adoption can be expected to restore trust in the national fares system. The monthly charge is proposed to be set at £49.

Fare Britannia is assumed not to be usable on InterCity services, and travel to and from London would entail an add-on Zone 6/all-zone supplement (which would be payable on a Pay-As-You-Go (tap in/tap out) basis using London’s established ticketing infrastructure).

Benefits

The report sets out a preliminary strategic, economic and financial case for Fare Britannia. The economic benefits will be experienced most across the English regions (and devolved nations, assuming the Scottish and Welsh authorities elect to join the scheme). It will help people access jobs and allow businesses to expand their employee catchments. It will encourage domestic and inward tourism, especially to less visited parts of the country.

A transfer of some people from car use to rail brings climate change and other environmental benefits and takes pressure off the nation’s over- stretched strategic highway network.

To test financial effects, an example of Fare Britannia with restricted deployment was selected. This test case does not permit Fare Britannia travel to/from/within London or travel on InterCity. It is therefore a restricted example, in effect a regional version. Interestingly, the travel stimulus effects experienced in Germany through its national Deutschland Ticket were similar to those achieved with the London fares simplification using Travelcard.

The change in annual rail revenue is estimated to lie within a range, with net annual revenue loss between a very modest level of £45m and a more significant reduction of £637m. This impact would be mitigated if rail demand and revenue took a higher growth path with Fare Britannia, as well it might.

Staged implementation

A regional version of Fare Britannia could be a good first stage application, perhaps centred on the north of England.

An increase of 28% rail demand would need to be met by a suitable mix of measures to increase rail passenger capacity. Nine candidate measures to achieve this are set out. In the north of England, where train provision is today often provided by short 2-car or 3-car trainsets, train lengthening would be a likely approach.

Expanding to a national application, it would still appear wise to exclude InterCity/high speed services, while incorporating the option of London travel.

The London facility would be an optional add-on to the national Fare Britannia card, using the Pay-As-You-Go facilities, as enjoyed by London travellers today.

The absence of InterCity means that existing parallel inter-regional train services which typically serve key intermediate destinations rather than running non-stop between the larger cities, would need to be strengthened.

A common feature of such services is that they are less well used post-Covid at peak times, since they catered for commuter flows that are now significantly diminished in scale. Ways in which a network of inter-regional services could be fashioned from today’s timetable have been examined and include the re-creation of some services cut-back in recent years.

Revenue allocation systems

Implementation of Fare Britannia requires detailed work on revenue allocation. It is recommended that Great British Railways (GBR) is tasked with this work and with bringing Fare Britannia into existence.

GBR would be responsible for negotiating with key third parties – with Transport for London, with the transport bodies of the devolved nations and with others at a regional/city region level as appropriate. The public sector must lead on these activities, and be expected to be held responsible for Fare Britannia. GBR would be accountable to Ministers for its implementation and forward management.

It should be possible, given a prompt start, to implement at least a regional version of Fare Britannia within the first two-three years of the current Parliament, with a full national version to follow.