Posted 9th October 2013 | 5 Comments
Key rail fare reforms expected today
FARE INCREASES are set to be reduced by the Government, which is due to cut the limit of the 'flex' deployed by train operators from 5 per cent to 2 per cent.
It means that the maximum increase in January would now be 6.1 per cent rather than 9.1 per cent. The baseline increase remains at RPI + 1 per cent. Companies using the flex have to reduce other journey prices to maintain the average baseline across a 'basket' of fares.
The reform is expected to be part of the publication today of the Department for Transport's Fares and Ticketing Review, which started last year and had been due to appear in the summer.
Other likely changes include the launch of a pilot scheme that could see all intercity tickets sold on a 'single-leg' basis, so allowing passengers to mix and match ticket types when making a return journey. At the moment, some return fares are cheaper than a single, which has tended to cause confusion and also restrict flexibility.
Flexibility of season ticket pricing is also expected to feature in the Review, paving the way for 'part time' season tickets and smartcards.
The Government has been under pressure to reform the complicated rail fares structure. Increases originally announced of RPI + 3 per cent in England and Wales have now been cut to RPI + 1 per cent for two years in succession.
The latest reforms have received a bleak reception in some quarters.
Labour shadow transport secretary Mary Creagh said: "Under David Cameron we have a cost of living crisis. Prices have gone up faster than wages in 38 of 39 months while he has been Prime Minister and working people are almost £1,500 a year worse off.
"Over the last three years David Cameron has failed to stand up for working people, allowing train companies to hit passengers with inflation-busting fare rises of up to 9 per cent. Far from addressing his failure, this is cold comfort for commuters – it has taken 18 months, delivers fare increases of up to 6 per cent and is too little too late. This announcement doesn't go as far as Labour's plans which would prevent train companies from increasing fares beyond one per cent above inflation."
TSSA general secretary Manuel Cortes said: "This late running fares review is a slap across the face for millions of passengers who have seen their fares go through the roof under our privately run railway.
"Despite seeing walk-on fares rise by over 200 per cent since privatisation, there is no action whatsoever to actually end 'inflation plus' fare increases."
Reader Comments:
Views expressed in submitted comments are that of the author, and not necessarily shared by Railnews.
James Brown, Newcastle
It is time the method of the single fare being about 10p less than the return fare is abolished. Also when people who have advance fares miss the train they are booked on for whatever reason, they shouldn'd have to pay the full fare without the cost of the advance fare being taking into account
Chris Neville-Smith, Durham
There is an aim to get railways self-funding, and yes, it has been watered down, but it's little to do with this announcement.
Financial support to the railways broadly broke down into two areas: subsidy for Train Operating Companies (which became a negative subsidy in 2010), and funding for Network Rail (which is still more than the net surplus from TOC franchises). The policy of RPI+1% increase every year was part of the plan to achieve this; the other part of the plan was to increase the overall efficiency of the railways.
In the 2010 spending review, the government decided to spend three years doing increases of RPI+3%, in order to accelerate the reduction in public funding. The government later backtracked after deciding (correctly IMHO) that a 3% increase over inflation was too much to ask of commuters when wages aren't rising very fast.
So, yes, if by "sooner" you meant the RPI+3% policy, that has been abandoned. But it's got little to do with the reduction in flex from 5% to 2%. That is broadly cost-neutral with little effect outside of newspaper headlines.
Lutz, London
The reduction of the upper limit of the Flex is possibly in consideration of the expectation that inflation will rise in the coming years with the effort to address the national debt, i.e. to avoid headline figures of 10-15%.
The other aspect of this new policy is the abandonment of the policy to get the railways self-financing sooner. (Was there sucb a policy at any time after 1968?--Editor)
Melvyn Windebank, Canvey Island, Essex
When I have read elsewhere that the total paid to the DFT by TOCs exceeds the amount the DFT pays out to TOCs producing a form of Rail Tax !
It seems this change is just a reduction in this payment to DFT by train companies and unlike the fuel tax duty freeze represents not much real benefit to rail users.
Perhaps rail fares and fuel duty should be linked and the same formula used to adjust prices so both rise, fall or stay the same together !
This might seem at least more fairer to rail users .
Chris Neville-Smith, Durham, England
I took one look at the BBC News page, saw the level of idiocy this descended to, then gave up. When people are claiming it's £190 return London to Birmingham (even the full-fare Anytime is £158), I'm just wasting my breath.
However, this does make me wonder what the real reason is behind reducing the flex from 5% to 2%. 5% affects a very small number of tickets and reducing the ceiling to 2% doesn't look like it will make much difference. I suppose there is the possibility that some train companies have found a way of gaming the system in their favour, but I suspect the real reason is to stop the usual headlines of EVERY SINGLE RAIL FARE IS DEFINITELY GOING UP BY 9.1% which we get every August. With a flex of 2% instead of 5%, the headlines will continue to be misleading, but only 40% as misleading as before.
I'm much more interested in the part-week season tickets though. That is long overdue.