Rail fare rises of 3.5% - unless government intervenes

Regulated rail fares are set to increase by 3.5% on January 1, unless the Government intervenes to ease the burden on passengers in an election year. 

As the cost of living continues to rise, the unions and campaigners have launched their strongest attack yet on the Government’s rail fares policy, as it emerged that some tickets could rise by 5.5% (accounting for the flex mechanism reintroduced in 2011).

July’s inflation figures released by the Office for National Statistics showed the Retail Price Index (RPI) measure of inflation at 2.5%. The formula for setting rail fares is RPI +1% - this produces the 3.5% increase, although Chancellor George Osborne is under pressure to keep the increase flatlined in line with RPI. 

The flex mechanism allows train companies to raise individual fares by 2% above the average, provided the overall average stays at RPI +1%.

Although the cost of two individual journeys on season tickets works out as considerably cheaper than the cost of peak Anytime return tickets, the rise in season ticket costs (see table), particularly in London and the South East, is becoming an increasingly contentious issue.

Shadow Transport Secretary Mary Creagh accused Prime Minister David Cameron of failing “hard-pressed” commuters by allowing regulated rail fares - including season tickets and off-peak inter-city return tickets - to rise by 25% since 2010.

“The choice facing passengers is between fares rising another 24% by 2018 under the Tories, or a Labour government which will cap annual fares on every route and enact the biggest railway reforms since the Tories’ botched privatisation, delivering a better deal for passengers and taxpayers,” said Creagh, in a speech outlining Labour’s proposals for rail (see pages 17). 

Bruce Williamson, spokesman of campaign group Railfuture, said “virtually stagnant” real incomes meant that fare rises continued to be unfair, but added that he thought it likely that “the Government will sweeten the pill with a smaller increase”. 

“The Government must start using the lower Consumer Price Index figure, which it always claims it prefers and which is a more accurate reflection of everyday prices,” he said.

“CPI with just 1% flexibility for the train operating companies would mean some fares going up by a maximum of 2.6%, which feels fairer.

“Making rail travel ever less affordable is an unsustainable policy which risks backfiring in the longer term. 

“Already our rail fares are the highest in Europe. If people cannot afford to travel to work, then that harms the economy, or it could force even more people onto our congested, potholed road system. Either way, the taxpayer loses.”

Rail Delivery Group Director General Michael Roberts, representing train operators and the rail industry, defended the rise in regulated fares, saying it would contribute towards the £38 billion due to be invested in the railway between now and 2019.

“Money from fares pays for more trains, better stations and faster services on what is already Europe’s fastest growing, safest and most improved railway,” said Roberts. 

He pointed out that it was the Government that decided the average change to regulated fares, including season tickets, each year gradually decreasing the burden of the cost of running the railway away from the taxpayer and more on individual passengers.

“Our commitment is to enable future government fares decisions which work best for passengers, by continuing to get more out of every pound we spend and encouraging more train travel to pay for services and improvements,” said Roberts.