Rail fares set to increase by 8%

16 August 2011 Last updated at 04:52 ET

For the next three years, the formula for rail fare increases is RPI plus 3%

Rail commuters are facing ticket rises of around 8% next year, following the release of latest inflation figures.

July’s RPI inflation figure determines the rise in regulated fares, like season tickets.

RPI inflation for July was unchanged at 5%, meaning the average season ticket will rise by around 8%, although some companies may charge more.

Rail Minister Theresa Villiers said “difficult decisions” on fares had been taken due to the budget deficit.

The rises are part of the government’s agenda to reduce the cost to the taxpayer of running the rail network.

For the last few years the formula for fare increases has generally been RPI inflation plus 1%, but for the next three years it is RPI plus 3%.

The formula affects regulated fares, such as season tickets and long-distance off-peak tickets. Some fares will go up by far more than the 8% average, because train companies are allowed to increase fares by another 5% on top, as long as that is balanced with reductions where.

Edward Welsh, corporate affairs director at the Association of Train Operating Companies (Atoc), said all the extra money raised will go to the government and not train companies.

‘Difficult times’

He told BBC Radio 4’s Today programme the “good news” was that the money would help to sustain investment in the railway network.

“It’s about ensuring that there is money there to pay for improvements for more trains, for better stations, for faster services – and that’s what passengers want,” he said.

Earlier, an Atoc spokesperson said companies knew these are “difficult financial times for many people”.

But that many fares needed to rise above inflation for the next three years to help pay for more trains, better stations and faster services.

“Increasing the money raised from fares will mean that taxpayers contribute less to the running of the railways, whilst ensuring that vital investment can continue,” the spokesman added.

There are some exceptions to the formula. Scotrail is sticking to the RPI+1% formula and Merseyrail will use RPI+0%.

A combination of more people travelling, above-inflation fare rises and cost-cutting has led to rail users’ contributions to the railways rising from £5bn in 2006/07 to £6.6bn in 2010/11 – over the same period the amount contributed by taxpayers has fallen £6.3bn to £4bn.

Campaigners are due to protest at London’s Waterloo station about the price rises.

“Affordable rail travel is vital for passengers, for the environment and for our workforce,” said Alexandra Woodsworth from the Campaign for Better Transport.

She added: “These massive fare rises will be a disaster for people already struggling with rising costs, and risk pricing those on lower incomes out of jobs in our major cities.

‘Long-term solution’

“The country simply can’t afford fare rises on such a punitive scale. It’s time to burst the bubble on inflation-busting fare hikes.”

But the rail minister said the scale of the deficit meant that the government “has had to take some very difficult decisions on future rail fares but the long-term solution is to get the cost of running the railways down” in order to “get a better deal for passengers and taxpayers”.

She added that revenue from fares enables the government to “continue to deliver much-needed improvements on the rail network, improving conditions for passengers and helping to strengthen economic growth”.

— ’re ’s , . : A ‘Malign Intellectual Subculture’ – George Monbiot Smears Chomsky, Herman, Peterson, Pilger And Media Lens.