Published on 16 Oct 2010

Rail fare increases of 30 to 40 per cent

If you thought that Wednesday’s spending review was all about Whitehall and welfare waste, then think again. So sharp are the cuts planned that some of the Coalition’s core voters are in for another shock, on train fares.

About 600 million annual train journeys have fares that are regulated by a formula set by the Government in relation to the near £2 billion subsidy it gives to the train operators.

The end result will be train fares rising by near double digit percentages in each year of the Spending Review.

Overall, Government sources are expecting these train fares to be over 30 per cent higher by 2015, and industry sources pointed towards a 40 per cent hike by 2015.

The increase in regulated fares is currently set at the Retail Price Index plus 1 per cent, I understand from industry and Whitehall sources that this is set to rise substantially.

As the RPI number used in this equation is currently set at 4.8 per cent, I was told that under the current settlement, multi-year double digit rises were possible.

This would mean for annual season ticket for commuters, that prices could rise by well over a thousand pounds.

Rail commuters at Clapham Junction, Britain's busiest rail station.
Rail commuters at Clapham Junction, Britain's busiest rail station.

There are two things driving this. Firstly, this is a government that believes in the market, and as we have seen with university fees debate, it believes that the user should pay.

So this is a fundamental big bang, shifting the burden of payment from taxpayers towards passengers.

Secondly it is important to note that this rise in fares will not go to train companies. Government says it is keen to do this so that there is funding for investment in train infrastructure, but surely these extra fees will simply go into the general deficit reduction pot?

And then there’s the politics in all of this. If we end up, on some lines, with RPI plus 5 per cent, where on earth will that leave Norman Baker, the Lib Dem transport minister, who was elected on a manifesto of RPI minus 1 per cent?

And if it is the Coalition’s strategy for a so-called modal shift from private to public transport, then these sorts of fare rises will do the opposite, unless they are planning massive road taxes too.

And then don’t forget that Network Rail is sitting on some rather valuable real estate, that could prove a handy piece of family silver for George Osborne.

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20 reader comments

  1. Ray Turner says:

    Have to say, that I think the ending of subsidised rail fares is correct. Why should public money be used to increase the profits of privately owned companies…? It shouldn’t, and that needs to become a core principle. If services are privatised, there are no subsidies.

    If the higher ticket prices means commuters have to move closer to their place of work, surely that is no bad thing. In the long-run, it might help the work to be distributed more evenly around the country rather than concentrated in London and the South East. Reducing the time spent travelling should help parents spend more quality time with their children. And trains should be less crowded, more chance of getting a seat for the extortionate ticket prices…

    It’ll be a bit of a social adjustment and an upheavel for some, train companies will also have to cut their cloth accordingly and not pay inflated salaries to executives, but it is well worth worth the price…

    1. Harry says:

      ‘If services are privatised, there are no subsidies.’ – I agree, this is a principle that should exist, but if it had existed when the rail network was sold off, how would that have worked? You can’t change the rules without dire consequences. Rail would never have BEEN privatised if there were no subsidies!
      And some may, indeed, choose to ‘move closer to their place of work’ – but how many are well-off and mobile enough to do that? Pull their kids out of school, lose their local support and social networks.. this will in the main hit people who don’t have those alternatives.
      ‘Social adjustment’? Dumping on the less well-off as usual.

    2. Sarah McLeod says:

      What rubbish! Its not just rich London execs who spend no time with their family who use the rail system. Anyone who can’t afford a car relies on this service, may students like myself travel to university and also home to visit. I bet you have a car and never use the rail sevice because you clearly don’t know anything about commuting or travel outside of London and the people who rely on this transport.

    3. phoebs47 says:

      Ray, I would love to work closer to home and not pay £4600 just to get to work and back, but in case you haven’t noticed there is a recession on and there simply aren’t any jobs.
      And like the majority of my fellow commuters, I don’t earn a fortune – an increase of £400 in the year (not including whatever the tube increases may be) is unacceptable considering the service we actually receive. Last week alone, I spent an extra 7 hours sitting on trains and tubes because of delays!
      And where is the reassurance that any of the money gained from these increases will be invested in providing a better service?
      The government really are living on another planet if they think this is a good idea…

  2. IainMH says:

    If MPs and ministers weren’t allowed second homes, didn’t have drivers and were made to commute with the rest of us (without expensing their fares), it would be very a different story.

    We are most certainly not all in this together.

  3. Patrick says:

    It’s worth remembering that the cost of motoring has changed little since 1988 in comparison with public transport which has more than doubled. The RAC was the last to point this out in a survey last year. Though it’s been known for some time. Subsidy or no subsidy fare do not need to be as high as they are, or will be. Here’s an example. from my home in the middle of the country it’s two and a half hours to London and to Glasgow or Edinburgh. I can get a cheap day return with a rail card tot he latter two cities for £15. I can only buy a saver return to London for £48 whether I buy this week, or in advance for next week, next month or next year. There are no discounts. Unless I want to be up at 3am and not come home until 4am the next day. Rail travel could be cheaper all round if some of the cheaper fares rose a little to subsidise the more expensive ones? i.e: Why not a £20 cheap day return for London or Glasgow?
    For people with a disability and no choice but public transport this is just an extra tax.

    1. Ray Turner says:

      Would be interested to see what Faisal reckons about the cost of motoring. My perception is that it has risen astronomically since 1988, but perhaps that has something to do with the way my lifestyle and work situation (i.e. reduced income) has also changed over the last decade or so…

    2. Patrick says:
  4. Malcolm Armsteen says:

    Ray – when are you expecting the good fairy to come along and bless this scheme of yours?
    How do civil servants live closer to Westminster? How do nurses live close to hospitals in expensive postcodes?

    Get a grip, please.

    1. Ray Turner says:

      I take your point, but it is also fair to say that the way the country has developed and evolved over the last few decades is ludicrous. Why do people travel sometimes a hundred miles or more to/from work every day..?

      Some sort of readjustment is necessary, particularly if we are also trying to reduce congestion and burn less carbon…

  5. si w says:

    Here in medway in cost me about 5 return just to travel not even a mile. They should do cheap fares for local travel and most station have loads of booths but they are never open or there is 1 person service when the Que is large. Also the local station always leaves the gates open all the time.

  6. Stuart says:

    I agree with the principle that public money shouldn’t be used to increase the profits of privately owned companies, although this isn’t a clear-cut thing, given how how the state pays for health, education, transport maintenance, and many more things that indirectly help companies in making profit (nevermind more direct subsidies). However, I’d much rather that some sort of renationalisation could take place, which brought franchises under public control financially but allowed them a certain independence. But I wouldn’t expect anything nearing imagination from this lot (who are worse than the last lot, who were pretty bad) – it really seems that we may be a worse country than the US by 2015 (though this ignores that the US will be a substantially worse country than the US by 2015)

  7. leexxxxx says:

    I’m speechless with disgust at the way the LibDems are systematically selling out all of their pledges. Have they no self respect? Is power for the few worth destroying the UK?

  8. blawrence9000 says:

    Ideological discussions aside, the fact is that UK rail customers are set to get more huge fare hikes for what is still widely considered an overpriced, unreliable, cramp service.

    Get me out of this country.

  9. Patrick says:

    Funny that the Government wants people to move around more to find work – and then this happens? For every great idea they pretend to have – they pull the rug out from underneath.

  10. Abe Hayeem says:

    There is only one answer to this. The Railways should be re-nationalised. This will create jobs, bring the whole thing under one umbrella, and then any subsidies will go to cheapen fares, and not into the private companies’ pockets.

  11. Sarah McLeod says:

    This sucks! They say that we have seen the students suffering already from teh cuts and now its the commuters turn. What if you are a commuting student like me who has to spend £64 a month at the moment to get to University!

  12. alan says:

    i believe the fundamental problem is that too much is concentrated in central london, move departments and offices etc away from central london and the problem sorts itself, logical really is it not.

  13. SillyStu says:

    Look at the rest of europe, espcially Switzerland who has THE BEST transport service in the world, affordable and always, always on time.
    They might not have the most comfortable buses, or trains, but they run like clockwork.
    Our system however is expensive, unreliable, the conductors are rude, bus drivers the same, and they’re talking about more increases in fares.

    This is supposed to be a PUBLIC TRANSPORT system,the clue is in the name. It should be taken back under PUBLIC control. The fares should be reduced and services increased as an incentive to reduce the number of cars on the road.

  14. K Hicks says:

    Rail fares in Kent are a complete rip off already
    Dover Priory-Victoria/Charing Cross off peak is already £18.60
    It’s £31.80 on the high speed train.

    Rail fares should be decreased

    Southeastern can seemingly charge anything they like. All the operating companies sell advance tickets except Southeastern – why is this?

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