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Joy for rail commuters as annual fare rises not as high as planned
1:58pm Sunday 7th October 2012 in News
Rail commuters received some good news today when the Government announced that the annual fare rises in January 2013 and January 2014 will not be as high as planned.
The Government had intended to allow train companies to raise the average price of regulated fares - which include season tickets - by RPI inflation plus 3% in the new year and in January 2014.
But Prime Minister David Cameron said that the rise for the next two years will be RPI plus 1%.
This means that in January 2013 commuters will have to fork out for average rises of 4.2% rather than the planned 6.2%.
The January 2014 increase will be 1% above whatever the RPI inflation rate is in July 2013, while the Department for Transport (DfT) said today that it was planning that from January 2015 onwards the regulated fares cap will be RPI plus 1%.
The RPI plus 1% formula will also be used for London's buses and the Tube for the next two Januarys.
The DfT said the decision to reduce the planned increase was expected to benefit more than a quarter of a million annual season ticket holders who can expect to have an extra £45 back in their pockets as a result of today's decision.
It added that many more holders of weekly and monthly season tickets could also see lower fares and some commuters will be over £200 better off over the two years.
The DfT said the reduction had been funded from savings identified in the department's budget.
However, even with the reduction UK train travellers will still be paying some of the highest fares in Europe.
Also, the RPI plus 1% formula only applies to regulated fares which form only around 40% of total fares. Train companies have the freedom to rise the price of unregulated fares by as much as they like.
There will also be the fear that with train companies now deprived of some of their annual revenue by the reduction in the planned increase, they will raise the cost of car parking at stations.
Manuel Cortes, leader of rail union TSSA, said: "He is still punishing commuters with an inflation-plus increase of 4% which he repeats in both 2014 and 2015.
"In his first two and a half years in office he has already increased rail fares by 12%. By the end of his term, he will have seen them increased by a staggering 20 to 25%.
"He is still planning to inflict a lot of pain on passengers who have seen their incomes squeezed over the past two years.
"All he is saying is that he will now do it more slowly."
Meanwhile, rail campaigners are claiming victory in their battle against rising fares.
Bruce Williamson from the campaign group Railfuture, said: "We've been fighting inflation-busting fare increases ever since they were first announced, so we're delighted that the Government has seen sense.
"It's unfair that rail passengers feel pain when motorists are not having to face such increases in fuel costs."
Transport minister Norman Baker said: "The coalition Government is committed to fair rail fare pricing and the announcement today is good news for both commuters and people who use the train less regularly.
"My Liberal Democrat colleagues and I have been making the case for a fair deal for passengers and I'm delighted that the two parties have come together on this.
"We have been very clear that as soon as the public finances allow, we should try to bring rail fares down and that we should keep the price rises to a minimum in the meantime.
"Liberal Democrats have also been clear on the need to put our railways on a sustainable footing. They need investment and they need it for the long-term.
"We will be working with the rail industry to achieve this so that the burden is shared fairly between passengers and the railway companies."
A spokesman for the Association of Train Operating Companies said: "The Government's change in policy is a positive move for passengers because it will mean lower-than-expected fare rises. All the extra money that ministers had instructed train companies to raise through the planned, higher increases in regulated fares would have gone to the Government.
"It is the Government, not train companies, that decides how much season tickets should rise on average each year. For almost a decade, successive governments have instructed train companies every year to increase these regulated fares on average by more than inflation.
"In doing so, ministers have been seeking to cut the contribution from taxpayers towards the running costs of the railway and increase the share paid by passengers."