Posted 19th August 2014 | 7 Comments
'No decision yet' on January's fare changes
THE announcement today that the Retail Price Index for July was 2.5 per cent has been seen as a key indicator of how much English rail fares are likely to rise in January.
Demonstrations against the expected increase have taken place outside more than 40 major stations.
The RPI for July is traditionally used as the benchmark, but it is not yet known what the decision will be for 2015. The Department for Transport has denied reports that the formula will be RPI + 1 per cent, saying that no announcement has been made.
However, the DfT and the Treasury may decide to keep any rise low, particularly as 2015 is an election year. The Scottish Government, meanwhile, has announced that off-peak fares north of the border will be frozen for the second year running, while peak fares will rise in January by an average of 2.5 per cent.
This January's increase in England was originally to be the RPI for July 2013 plus 3 per cent, but two government u-turns later in 2013 reduced it initially to plus one per cent, and then simply RPI.
The other question is the often-debated 'flex', which allows operators to apply an additional rise to some fares while also applying a balancing reduction to others. The cumulative effect across a 'basket' of fares must be neutral.
The permissable flex in January this year was 2 per cent but it has been as much as 5 per cent in previous years, although it was temporarily abolished entitely in 2010.
Unions are bracing rail users in England for an above-inflation rise. TUC general secretary Frances O’Grady said: “It’s grim news for commuters that they face yet another year of fare hikes above inflation, while their wages keep dragging behind inflation. The cost to passengers of the failed privatisation of our railways keeps growing year on year. We’ve ended up with slower trains and higher fares than countries who have kept their trains in public hands. It’s time to stop private companies profiteering from our railways and to make sure that passengers and taxpayers’ money is reinvested to improve our services. The only way to do this is to bring our railways back under public ownership.”
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
Chris Neville-Smith, Durham
"We already have the highest train fared in Europe why should we pay more....."
Not true. If you're talking about the Daily Telegraph stats that came out yesterday, that was deliberate dishonesty, cherry-picking the most expensive walk-on peak fares in the UK against the cheapest advance fares on the continent. Similar stunts are pulled year on year comparing the cheapest air fares to the most expensive rail fares.
If you want some cherry-picking-free analysis, that covers all the different scenarios, read the article from Man in Seat 61 (sorry, not allowed to post the link). But the papers ignore this because it doesn't suit them.
Tony Pearce, Reading
I notice that all other Press Agencies are reporting the Fare Increases as a done deal - eg the normally reliable BBC headline - 'Many rail fares in England - including season tickets - will increase by an average of 3.5% next year.' No other agency picked up your report that the Department of Transport said no decision had been taken. In fact Government Ministers have been 'defending' the increase saying it represented good value for money. But I accept that you are indeed reporting correctly.
Chris Neville-Smith, Durham, England
Oh dear, not a good endorsement for the rest of the media. Seems that whilst the rest of the media assumed it was going to be RPI + 1%, no-one bothered to check if this was still the case.
Mind you, these are the same people who unthinkingly trot out "save 10 minutes to Birmingham" so I suppose it's not entirely unexpected.
Melvyn Windebank, Canvey Island, Essex
Given that benefit and pension increases are calculated using the CPI index instead of RPI then why can't rail fare increases be calculated likewise thus removing the massive distortion housing puts on the RPI ?
It's also worth remembering that Network Rail returned a £2 billion profit (before tax ) and TOCs profits despite what the press says are around 3% so the main culprit in fare rises is the present government who increase rail fares yet boast of fuel duty freezes so time to tie the two together !
Oh, perhaps its time Highways Agency was set the task of collecting from road users via tolls and charges the same profit level that Network Rail returns ?
Martin M, Sussex
We are all forgetting that their are more and people using the trains now than for a long time and thus the extra passengers should fund the extra investment. Imagene British Airways saying that they had too many people flying to New York and asking people to pay extra to buy extra planes for the extra passengers to cope with the increse in the next two year! It never happens. So why do the train companies expect us to pay for increased capacity so they can charge more fares from the exta passengers. We already have the highest train fared in Europe why should we pay more..... The Goverment needs to resolve this otherwise people will be priced off the trains back onto the roads as they are now being seen as the cheaper option!
Tony Pearce, Reading
Its Election Year and that figure (*) will obviously be cut back to the rate of inflation - RPI not CPI. But apart from cutting wage increases a bit and packing the trains even fuller, I can see very little room for productivity increases.
*What figure? No increase has yet been announced, as I thought our story made clear.--Editor
Lutz, London
We would not have to suffer these fare rises if the rail industry would just get its act together and start implementing automated train movements. We then we would not need train crews which are a significant part of the cost of rail operations.