Runaway Train Fares

Rail fairs are due to rise again, leading to claims that we have the most expensive train travel in Europe, if not the world. This time they are due to rise by an average of 4.1% from January 2014, which will be applied to all fares, including season tickets. And although the actual price rise is unlikely to be revealed for some time, why are they going up by at least 1% above inflation?
Did you know that rail companies are allowed flexibility, which allows them to increase fares by as much as 6% above the Retail Price Index? Although this must be balanced out with cuts elsewhere or small rises, it is possible that this increase may actually be an even bigger than average increase than has been announced. Showing no signs of stopping, a similar price increase of RPI plus 1% has been announced by the Government for 2015. In short, we have had inflation busting fare increases every year since 2004.

How much regulated fares will have risen since 2008 when 2014s increase comes into effect
So why are fares continuing to increase? The Government wants passengers to pay for the running of its railways. A White Paper in 2007, Delivering a Sustainable Railway, said that by 2014 its target was to get 75% of the money from fares and 25% from taxpayers. So we can expect fares to keep increasing for some time yet. The Government also claim that it is paying for multi billion pound improvements across the networks. And yet despite the high cost, record numbers of people are using the trains, because there are numerous cheap deals to be had if you are booking in advance or travelling off peak. Compared to the cost of using your car with the added cost of insurance, petrol, road tax etc, the train still looks to be cheap by comparison. So will the price increases be the same for everyone? Well no they wont. The Scottish Government is going to cap regulated peak fares at RPI in January 2014 and January 2015, and will freeze regulated off peak fares after 2013 as long as the RPI is below 3.5% per annum. Northern Ireland does not plan any increases, and the Welsh cannot decide what they are going to do. 22 rmbusiness.co.uk So would we be better off under a Labour Government? The shadow transport secretary Maria Eagle has said that Labour would stop the train companies fiddling the cap and adding 5% on popular routes. It gives a big advantage to train companies to maximise their revenues whilst leaving commuters who have no other realistic choice having to face this cost of living crisis that just keeps getting worse and worse and worse. The present Government in its last command paper promised to address the concerns about rail fares and the impact they have on hard-pressed families - by ending inflation-busting increases in average regulated fares at the earliest opportunity. They havent however put a timescale on it, so who knows when it will happen.

40%

Annual rail fare changes vs nominal pay 2004=100. Rail fare data is from the ORR, while pay data is from Hay Group. Operative jobs include clerks, receptionists and data entry roles, while professional includes accountants, analysts and engineers. Source: Hay Group

lifestyle
All tickets Season tickets Operative pay Professional pay

151.3

120

100 2004 2005 2006 2007 2008 2009 2010 2011 2012

Patrick McLoughlin, the transport secretary, said: Running the railways is a hugely expensive business. The taxpayer overall is still putting in huge amounts of money... and Im afraid the passenger also has to make his contribution. He continued, saying there had been a vast growth in passenger numbers, and added, what were doing is driving up the levels of investment so people get more reliable train services and better facilities as well. But how does this affect local commuters? Those that travel from Romford to London Liverpool Street will be hit really hard with an estimated rise of 4.1%, taking your annual season ticket from 1708 to 1778. Those commuting from Rainham to London Fenchurch Street with C2C who are currently paying the same for their season ticket, can expect a similar rise in their fares. David Sidebottom, from watchdog Passenger Focus, said travellers would shrug wearily at the news of another rise, adding: It is crucial that more trains arrive on time, investment in future improvements continues, and the basic promises that the industry make, are delivered. As the general public are finding it more and more difficult to afford to travel by rail, Richard Hebditch from the Campaign for Better Transport said; Its really starting to eat into peoples incomes. The TUC showed their objection by organising demonstrations at around 50 railway stations across the country. Their General Secretary, Frances OGrady, said that the passengers were lining the pockets of the shareholders of private rail companies, and expressed a wish that the government renationalise the railways. Local residents who use the trains have met the news with anger and disgust, and have taken to social networking sites Facebook and Twitter to complain about the state of the trains, criticising that they were filthy with food and drink, which covered floors and seating. Another commuter commented that even though there are price rises each year, trains on the Shenfield to Liverpool Street line are antiques, and its hard to see any benefits. A C2C spokesman said the company will not release a formal statement until the new ticket prices are announced, while a Greater Anglia spokesman said: The government determines the average ticket price for regulated fares in January. The details of the actual fare increases which will take place in January 2014 will be available later this year. 23