Increase in rail fares restricted
Hard-pressed rail commuters facing inflation-busting season ticket fare increases in the new year are being given some respite.
The Government has announced that t he ability of train operators to add an additional 5% to some individual fares, as long as the average rise of regulated fares is maintained at 1% above RPI inflation, is being limited to just 2%.
This means that in January 2014, no regulated fare - which includes season tickets - can go up by more than 6.1%, with the average, as already announced, being limited to 4.1%.
With the new year rise being based on the July 2013 RPI inflation rate, which was 3.1%, some season tickets could have gone up by as much as 9.1% under the old "flexible" system.
The reduction in "flex" is part of the Government's fares and ticketing review published today by Transport Secretary Patrick McLoughlin.
As well as curbing the rise in fares, the review opens the door for future innovations such as the end of paper tickets, a code of conduct for train companies to give passengers the confidence that they are getting the best deal for their journey, and a flexible approach to season tickets which could benefit part-time workers.
Some of the ticketing initiatives were announced last month.
Mr McLoughlin said: "Today is just the start of a Government-wide programme to help hardworking people and reduce the cost of living. The Government will be announcing a range of initiatives to help put money back in people's pockets over the next few weeks.
"By capping fares we are protecting passengers from large rises at a time when family incomes are already being squeezed. We will need to wait for the rail industry to calculate individual ticket prices for next year, but this cap could save some commuters as much as £200 a year.
"Alongside this, the Government is investing over £16 billion to transform our rail network, which will make sure we can respond to increasing passenger demand and drive forward economic growth that will help strengthen our economy."
In addition to the limit on the maximum increase in regulated fares, the review includes measures on::
:: A Ticketing Code of Practice: the Office of Rail Regulation (ORR) will oversee the code to ensure that passengers are provided with the information they need to choose the best ticket for their journey and that this information is clear and not misleading;
:: Ticket Offices: a strengthening of the rules around how train companies alter opening times at station ticket offices. The Government's intention is that passenger representative bodies can play a greater role in shaping any changes and ensure that appropriate passenger safeguards are also put in place;
:: Flexible Ticketing: the Government is committed to introducing more "touch in - touch out" rail tickets across the network which could mean part-time workers receive a discount on season tickets for travelling three days rather than five or for travelling earlier or later. The Department for Transport's (DfT) £45 million South East Flexible Ticketing programme will pilot many of these innovations next year;
:: Market Study: the ORR will look into the sale of tickets and consider whether current markets are operating efficiently, effectively, and in the best interests of passengers and taxpayers. The department has committed to consider any cost-effective recommendations that come out of the study;
:: Annual Surveys: The Association of Train Operating Companies has agreed to release the information to customers from next year on how well ticket office staff, ticket machines and websites perform in regards to selling passengers the best ticket for their journey;
:: Single Leg Pricing: the DfT is planning a pilot scheme which will allow passengers to more easily "'mix and match" each ticket type when planning a return journey, giving passengers extra confidence that they are getting the best deal on their journeys.
Anthony Smith, chief executive of rail customer watchdog Passenger Focus, said: "Passengers will be pleased to hear that the amount train companies can raise individual regulated fares by has been limited.
"We have been calling for this to happen for years - it is a step towards a fairer system. This will allow passengers to plan with a bit more certainty and have confidence that actual regulated fare rises will bear more relation to the figures set by government."
He went on: "It is imperative the rail industry does what it can to ensure that passengers buy the right ticket. It should then be obvious what they have bought and when it can be used. These reforms taken together will, in time, help boost confidence. The price of getting it wrong has now become very high for passengers."
TUC general secretary Frances O'Grady said: "Like all these things, the devil is in the detail, but we are pleased the Government has responded to concerns raised by unions and passenger groups over ticket office opening hours and runaway fares.
"However, ministers are still failing to deal with the elephant in the room - the market failure of rail privatisation. this is wasting millions in taxpayers' money every year and is one of the main reasons why fares have become so eye-wateringly expensive."
Mary Creagh, shadow transport secretary 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 nine per cent. Far from addressing his failure, this is cold comfort for commuters - it has taken 18 months, delivers fare increases of up to six 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.
"If David Cameron was serious about tackling his cost of living crisis he would back Labour's plans to freeze energy prices and expand free childcare for working parents. While Labour is calling for a tax cut for millions of working people with a lower 10p starting rate of tax, David Cameron has shown how he only stands up for a privileged few, giving a huge tax cut to people on over £150,000 a year. David Cameron and the Tories are completely out of touch."
Bob Crow, leader of the RMT transport union, said: " This is a total con that will still leave the vast majority paying inflation-busting fares to pump up the profits of the private train operators.
"For a few it will feel like having your wallet nicked with the mugger then handing you a few bob back to buy a pint. Nobody will be fooled by this political stunt.
Manuel Cortes, leader of the TSSA rail union, 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 the fact that walk-on fares have risen by over 200% since privatisation, there is no action whatsoever to actually end inflation-plus fare increases.
"All Patrick McLoughlin is offering is to limit them to twice the rate of inflation rather than three times the rate of inflation, which have left us with the highest fares in Europe.
"He is merely offering to hold passengers' coats while they keep getting mugged every year by the same set of spivs - the private rail firms."
David Mapp, commercial director at the Association of Train Operating Companies, 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."
Today's rail fare announcement applies to England. In Scotland, the January 2014 regulated fare rise will be 3.1%, based on the formula of RPI plus 0%.
Unlike England, Scotland has no "flex", so no regulated fare can go up by more than 3.1%. The Welsh new year fare rise has yet to be announced.
Stephen Joseph, chief executive of the Campaign for Better Transport, said: "Although we welcome a curb on even-higher fare increases, there's still a gaping hole at the centre of the Government's fares policy.
"Whilst trials for things like part-time season tickets are very welcome, the biggest issue has always been annual above-inflation fare increases and there is no change of policy on this. This is bitter news for everyone who relies on the train to get to work, not least the large number of commuters in marginal constituencies who will be a key group at the next election."