Rail passengers in England are set to be hit by the second highest annual fares hike in a decade, campaigners are warning.
They say the “smoke signals” from the Government are that it shows “no inclination” to slash long term ticket prices despite its plans to return the railways to public control.
Travellers including millions of commuters are consequently facing a sharp increase in fares of nearly six per cent next year after inflation figures for July, which are used as the benchmark for the annual rise, rose by more than expected – confirming a further squeeze on consumers’ pockets as living costs continue to rise.
The news comes in the same week that it was revealed that rail fares for many commuters in Scotland would be almost halved.
The Government yesterday emphasised that no final decision has been made on the annual increase in regulated fares such as commuter season tickets or long-distance off-peak journeys. The rise, which is calculated using the outmoded retail prices index (RPI) applies to 45 per cent of train tickets, is scheduled to come into effect next March.
‘Most expensive rail fares in Europe’
But campaigners and industry insiders told The i Paper this week there is a growing expectation that the Department for Transport will use a formula of adding one per cent to the RPI figure (known as “RPI+1”) for July to calculate the yearly rise.
The July RPI figure of 4.8 per cent would mean rail travellers in England would be hit with a 5.8 per cent hike – the second highest figure in at least a decade and significantly above the 3.4 per cent average of the last ten years.
By contrast, fuel duty for motorists has remained frozen since 2011, with a temporary five per cent cut introduced in 2022 and carried over since.
Michael Solomon Williams, head of campaigns at the Campaign for Better Transport, said: “The smoke signals we are getting from the Government are that it’s likely to be one of the largest increases in recent years, and that there isn’t necessarily a concerted focus on addressing that.
“Unfortunately, there’s really not an inclination to address this recurring annual rise which is in such stark contrast to the freeze on fuel duty.”
Bruce Williamson, of campaign group RailFuture, which represents 20,000 rail users, said: “It is an outrageous situation. Why is the Government content for us to have the most expensive rail fares in Europe and to jack them up in real terms even further?
“It’s absolutely sending the wrong message. It’s the un-green way to go. It’s increasing congestion and pollution and it’s absolutely the opposite of what the Government should be doing.”
Ministers may yet opt to tweak the RPI+1 formula – which has been used in the past but is not a given – for example by opting not to impose the extra one per cent on top of inflation.
However, critics point out that RPI remains higher than the widely-used CPI measure of inflation and would still result in swingeing fare rises.
In the event of a 5.8 per cent rise, annual season ticket prices for journeys into London would rise by an average of £321 and regional commuter journeys into Leeds and Manchester would rise by £104 and £109 respectively.
The unpalatable prospect of an inflation-busting rise for English rail users comes ahead of Tube strikes in London next week and in the same week that commuters in Scotland were handed a dramatic reduction in travel costs after the Holyrood government announced it was abolishing peak train fares. The move means rush-hour fares will fall by at least 20 per cent, and nearly half between Glasgow and Edinburgh, at a cost of up to £45m a year.
While the devolved governments in Wales and Scotland will impose their own annual fare increase, Railfuture said the abolition of peak fares in Scotland meant there was potential for a widening gap between the cost of train travel either side of the border.
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Mr Williamson said: “If that disparity grows significantly, people will start to notice. We already have a ridiculously complex and impenetrable fares system. At some point people will look at the cost of rail travel and its complexity and ask themselves if it is worth it, with all the implications that has for congestion and the environment.”
The dilemma over fares comes at a key time for the rail network as the Government prepares to bring it back under public control by setting up Great British Railways (GBR), the state-owned body which ministers say will result in “efficiencies and savings” for the public purse by renationalising rail operators and streamlining the previous privatised system.
Ministers have made the simplification of the labyrinthine ticketing system a priority. This week a trial was announced in the East Midlands of a new system pay-as-you-go ticketing system which will use GPS satellite technology to track travellers’ journeys and charge the best fare at the end of the day.
‘Savings will just be raked back in by Treasury’
Campaigners said the decision reached by ministers on fare rises, due in the coming weeks, will be a litmus test for the Government’s intentions with GBR.
They pointed to this summer’s comprehensive spending review which suggested that ministers would be looking to reduce the state subsidy for running the railways – currently stood at £12.5bn per annum – rather than passing on savings to travellers.
Mr Williamson said: “The unification and the defragmentation of the railways will lead to efficiencies and economies of scale. But I’m also very confident that those savings will just be raked back in by the Treasury rather than being handed back to passengers in fare cuts.”
The Campaign for Better Transport, which is seeking a freeze on rail fares, pointed to evidence that price is the most important factor for people in deciding whether or not to use the railways. The most recent monthly survey of passenger views conducted by watchdog Transport Focus found that while overall satisfaction with the railway stands at 84 per cent, the percentage of those agreeing it represents value for money stood at 58 per cent.
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Mr Solomon Williams said: “Cost really is key and now is the time to change things in this area. It would be a great display of sincerity by the Government to show that this is what GBR is about.”
Alongside its railway renationalisation project, the Government is dealing with slower growth in income from fares following a significant shift in the way passengers are using trains since the Covid-19 outbreak.
Official figures show that while passenger numbers are now close to returning to pre-pandemic levels, income from fares remains 18 per cent below what it was in 2019, amid changes including fewer people opting to buy season tickets. Industry insiders say the result is a desire for passengers to fund improvements rather than the public purse.
One rail executive said: “A lot of people think GBR is badly needed. But it is clear the Treasury does not want to be writing bigger cheques for the railways. In those circumstances, there is only one way to increase income and it is passengers who will continue to pay the bills.”
A Department for Transport spokesperson said: “No decisions have been made on next year’s rail fares but our aim is that prices balance affordability for both passengers and taxpayers.”
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