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09.10.13

New cap on train fares announced by DfT – and no ‘super peak’

Train operators’ freedom to raise the price of individual tickets as long as they balance these out with reductions elsewhere is being restricted by the Government. 

Transport secretary Patrick McLoughlin has published The Future of Rail Fares, a review which introduces a 2% cap above the average regulated fares rise permitted, which for next year is RPI+1%. 

McLoughlin says in his foreword: “From January 2014 we will give rail passengers a better deal by capping the upper limit of any individual fare rise at 2% above the permitted average of inflation plus 1%, for all regulated fares. This will protect passengers from large fare increases, which can have a significant impact on household budgets, by taking 3% off the maximum increase for a regulated fare.” 

The DfT had been considering allowing additional ‘super peak’ fare rises to pay for fare reductions in the ‘shoulder peak’, to try smooth out demand. But it says in the review:

“The overall increase in passenger numbers from a shoulder peak discount is likely to be very small, and not sufficient to generate the new income needed to offset the cost of the discount. If we are to avoid increasing the call on the public purse, other fares would need to increase to cover this cost. 

“Allowing train operators to charge a premium in the ‘super peak’ would be one way to do this, and would boost efficient capacity utilisation, which in the medium to longer term could help curb overall fare rises. In the short-term however this would result in additional fare rises for some passengers and in the current climate with other pressures on household budgets that is not something we can accept. We have decided against super peak pricing as we believe it simply would not be right to impose a further burden on hard-pressed commuters at this time.” 

A ticketing code of practice will be introduced, overseen by the ORR, to strengthen the rules around how train companies alter opening times at station ticket offices. More flexible ticketing should be used, including discounts for three-day season tickets and for travelling earlier or later. 

McLoughlin added: “It remains our firm ambition to cap fare rises at the level of inflation, just as soon as economic conditions allow and savings have been made to the cost of running our railways.” 

The ORR will also undertake a market review of the sale of tickets and ATOC will release annual information on how well staff, ticket machines and websites perform selling passengers the best ticket for their journey. 

Single-leg pricing will be piloted to allow people to mix and match tickets and to find better deals. 

David Mapp, commercial director at ATOC, said: “Train companies and passengers will welcome the planned reduction in flex. Although the level of flex has always been a matter of government policy, the reduction being proposed is in line with that suggested by train companies and should help to encourage greater rail use. 

“The package of measures, which train companies have worked with the government to draw up, should make it quicker and easier than ever for people to get the best value ticket for their rail journey. Operators look forward to working with the Government to introduce the changes.” 

The full 84-page document, ‘Rail Fares and Ticketing: Next Steps’, is available here

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