Government to limit peak time rail fare increases to RPI + 1%

Monday, 08 October 2012 10:45

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Average rail fares are set to increase by just over four per cent next year, lower than previously thought.

Rail fare increases are to be capped at the level of the retail prices index (RPI) in July this year, which was 3.2 per cent, plus one per cent, which means rail fares will rise by an average of 4.2 per cent.

The government had planned to raise rail fares by RPI plus three per cent. The reduction in the fare increases will be welcomed by commuters who have faced big increases at a time when wage increases have been below the level of inflation.

The same formula of increases, RPI plus one per cent will apply to London underground and bus fares for the next two years.

However, some passengers will still face higher price rises because the cap only applies to peak time fares.

And within the small print train operators will be able to increase some rates of tickets above the 4.2 per cent cap as long as the increase is kept below the average on others. This means OFF-peak fares can rise at a higher rate to allow train operators to make up the shortfall because of the cap on increases on peak time tickets.

A spokesman for Boris Johnson, the London Mayor said the announcement was "very helpful and represents good news for hard-pressed commuters in difficult economic times".
However, rail unions said that the government was misleading commuters by saying that inflation busting price increases are to end soon.

Manual Cortes, leader of the TSSA transport union, said: "Ministers are misleading passengers when they claim they will end inflation busting increases 'as soon as possible.'

"Their own plans for the next seven years are based on passengers paying RPI plus one per cent between 2014 and 2019.

"Passengers now contribute 60 per cent towards the £6 billion cost of running the railway.

RMT General Secretary Bob Crow said: "Despite this blatant piece of spin from George Osborne the reality is that rail passengers will be paying inflation busting fares for years to come to travel on clapped-out, overcrowded trains in the name of private profit."

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