New cap for rail fares

Transport Secretary Patrick McLoughlin

Transport Secretary Patrick McLoughlin

First published in News

The Government has put a new cap on some rail fares - but this will still allow rail companies to put up prices at above the rate of inflation.

In the past, some tickets have been able to be put up by as much as 6.1% above inflation each January, as long as the overall increase in fares was no more than 1% above the previous July rate of inflation. 

This would have meant some fares could have gone up by 9.1% next year, with the average increase no more than 4.1%.

Now, the most any fare can go up is no more than 2% above that - which pegs it at 6.1% for 2014. 

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: "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."

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."

Comments (1)

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4:42pm Wed 9 Oct 13

Warren Morgan says...

So the Government is happy to place a cap on rail fare increases, but calls Labour's plans to freeze gas and electricity bills "Marxist"?

Rail companies will still be able to increase fares above the rate of inflation - whilst pay remains frozen for many (including NHS staff) and for others is increasing at a rate below that of inflation. The cost of living is going up whilst wages are flatlining. Great news if you are a shareholder in a major company that stands to profit, bad news if you are just trying to make ends meet.
So the Government is happy to place a cap on rail fare increases, but calls Labour's plans to freeze gas and electricity bills "Marxist"? Rail companies will still be able to increase fares above the rate of inflation - whilst pay remains frozen for many (including NHS staff) and for others is increasing at a rate below that of inflation. The cost of living is going up whilst wages are flatlining. Great news if you are a shareholder in a major company that stands to profit, bad news if you are just trying to make ends meet. Warren Morgan
  • Score: 2

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