New formula to raise UK train fares

Rail travellers are likely to face larger than normal fare increases next year due to a new formula that links ticket prices to the July inflation rate – which will be released later.

Under the new system, rail companies can charge up to 3% on top of inflation. Previously they were restricted to the Retail Prices Index figure plus just 1%.

Economists expect RPI to be about 5%, resulting in ticket price rises of up to 8%.

Passenger campaign groups have criticised the measure as a step too far.

Campaign for Better Transport ‘s Alexandra Woodsworth said: “Affordable rail travel is vital for passengers, for the environment and for our workforce.

“These massive fare rises will be a disaster for people already struggling with rising coasts, and risk pricing those on lower incomes out of jobs in our major cities.”

An annual rail pass from Birmingham to Manchester costs £4,496. With an 8% increase that would go up by £359.68.

A similar pass from Reading to London costs £3,584. It could rise by £286.72.

A Department for Transport spokesman said: “The scale of the deficit means that the Government has had to take some very difficult decisions on future rail fares but the long term solution is to get the cost of running the railways down.

“That way we can get a better deal for passengers and tax payers. We are determined to do this and if we succeed, we hope to see the end of above inflation rises in regulated fares.

“Revenue from fares enables the Government to continue to deliver much-needed improvements on the rail network, improving conditions for passengers and helping to strengthen economic growth.”

The Government’s new fares formula was unveiled by Chancellor George Osborne as part of his comprehensive spending review last autumn.

This is the first time it has been imposed since then.

Rail companies say they will not profit from the fare increases.

Source: Sky News