Fares, rail policy and DfT news

05.12.17

Biggest rail fare rise in five years condemned by passengers

The Rail Delivery Group (RDG) has announced the biggest fare increase since 2013, with prices set to rise by 3.4% in January.

Figures are lower than the initial ONS projection of 3.6% but have been condemned by passenger group Transport Focus for using the higher retail price index to calculate rises.

Train companies maintain that the price rise is justified and say that 97% of the money passengers spend on tickets is funnelled back into railway investment.

“A chill wind will blow down England’s platforms in January as rail fare increases bite,” commented Transport Focus chief executive, Anthony Smith.

“Many passengers face stagnant or falling incomes while rail fares continue to climb. It is time that the fairer, clearer Consumer Prices Index formula is used as the basis for rail fare rises rather than the increasingly outmoded Retail Price Index.”

Smith did welcome the investment in new trains and improved track and signalling but said passengers were “seeing the basic promises made by the rail industry broken on too many days” – referring to reliability and value for money across the network.

The Consumer Prices Index (CPI) uses slightly different variables to the Retail Price Index (RPI) meaning it is lower and would indicate a lesser increase in cost.

Making the announcement, Paul Plummer, chief executive of the RDG, shifted some of the blame for the fare increase onto the government, saying it controls increases to almost half of fares, including season tickets, with the rest “heavily influenced by the payments train companies make to government.”

“Alongside investment from the public and private sectors, money from fares is underpinning the partnership railway’s long-term plan to change and improve,” he continued.

“Working together, our plan will secure £85bn of additional economic benefits while enabling further investment and improved journeys for customers, better connections to boost local communities and a bright future for our employees.”

Mick Cash, general secretary of the RMT, said the fare increase was “another kick in the teeth for British passengers” who he says will still be left paying the highest fees in Europe.

He said: “For public sector workers and many others in our communities who have had their pay and benefits capped or frozen by this government these fare increases are another twist of the economic knife.”

The new fares will take effect from 2 January 2018 although passengers should be able to find updated prices and buy tickets from today.

Top image: Tim Goode EMPICS Entertainment

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Comments

James Palma   05/12/2017 at 12:30

It is interesting to see the costs of operating the railway as released by the Rail Delivery Group, where about 25p in the pound is staffing costs and about 17p in the pound is investment. The high costs of operating the railway surely down to overinflated pay rises for certain staff caused by the Unions?

Paulw   05/12/2017 at 12:58

Perhaps the fare increase could be kept in line with the Average Weekly Earnings index, instead.

Alexander   05/12/2017 at 13:26

Link fares to what drivers get paid. Base date rail nationalisation?

Ampox   05/12/2017 at 14:07

With guaranteed price rises, who needs to make economies (apart from the rest of us)? Maybe some of the new trains could be replaced with refurbished and comfortable older ones?

David   05/12/2017 at 18:25

Why would new trains be more expensive to operate, if operators such as GA and SWR are rushing to replace large swathes of their fleets with Aventras?

Sonning Cutting   05/12/2017 at 22:10

Just a reminder that it is this Government's policy to make rail users pay a larger & larger share of the cost of rail operation. Daily commuters are the major reason for a large proportion of rolling stock provision and for most of the major infrastructure improvements currently in hand. One could argue therefore that the fare rises are appropriate. Unfortunately road users are not charged in the same way and get a "social service"! Other countries - particularly in Europe - are more even handed. We all have a chance to change this at the ballot box.

DP   06/12/2017 at 08:13

Sonning - but wages are stagnant. People wouldn't mind if wages and fares were both rising by the same amount but we've had nigh on a decade of rising fares and stagnant pay packets. I'm not going to get too political here, but the Conservative government's claim that it's helping working people and those "just about managing" is laughable when it then increases rail fares by the top whack.

Samir   06/12/2017 at 08:25

not sure where the lie of the cost of the rial ticket is because of high wages. UK wages are among the lowest in the EU and rail tickets are the highest in the world! UK ticket prices are a guaranteed profit to shareholders, who never take any risk, never make a loss but have a guaranteed ROI - and the vase majority of the shareholders kick the money offshore, avoiding tax

J   06/12/2017 at 09:17

And what to the long suffering passengers get for their money? more and more signal and points delays ride in boring EMU/'DMU's with rock hard seats(class 700s anyone) you just cant keep building longer trains it only means more people travel same a M-Ways. And the level of subsidy is way above what BR got(3 odd billion?) and they ran everything including hotels,ships and ports. No wonder the rest of the world doesn't go down this disastrous road

Tothehills   06/12/2017 at 09:24

Samir: and Whos fault is it the private sector does not take the risk: Why it is HMG. Do not blame private operators for what in reality is a low risk marginal return; most companies would like to make significantly more than 3%! Government control is what has got us into this mess as they have not been prepared to perform a route and branch analysis of fares structures since the time of BR: this being the reason why tickets to Scotland are cheaper on the ECML than on the WCML - pretty arbitrary really!

Jerry Alderson   06/12/2017 at 13:28

Being pedantic: "The Consumer Prices Index (CPI) uses slightly different variables to the Retail Price Index (RPI) meaning it is lower and would indicate a lesser increase in cost." It is not just that CPI excludes housing costs (although CPIH takes account of them). CPI reflects the increases that consumers are likely to pay. RPI reflects the increase in prices. To achieve this RPI uses an arithmetic mean but CPI uses a geometric mean of the price changes. It does not always follow that consumers will pay higher prices. They often change their behaviour, such as switching to a cheaper brand. Something that is not possible with the railway. Therefore under RPI train travel becomes a higher proportion of a person's spend each year. This is not sustainable.

Andrew   06/12/2017 at 17:12

What with strikes and drivers going to be paid massive pay rises i feel very sorry for commuters that do not have much choice but to use the trains.

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