Rail companies accused over price hikes
Rail fares are to rise by an average of 1.1% in January, the lowest increase since privatisation, yet passengers on some lines have been warned to expect crippling hikes of 10%.
The low rate of inflation means the average train journey will rise in price by 6p in the new year, from £5.05 to £5.11, according to figures from The Association of Train Operating Companies (ATOC).
This small average increase is largely to the fact that season tickets and off-peak fares, which account for two in every five tickets sold, are pegged to July’s Retail Prices Index (RPI) and will therefore fall 0.4% come January.
However, consumer group Passenger Focus says the average figures mask the true scale of the price hikes some train companies are expected to unleash on passengers.
Anthony Smith, chief executive of Passenger Focus, says unregulated fares will rise significantly more than inflation: “After years of punishing, above-inflation fare rises, some passengers will see a little light in the new year.
"However, there is a sting in the tail - many unregulated fares will continue to soar above inflation as the average figures will mask steep rises on individual routes.”
Train operators such as Arriva Train Wales, Chiltern, First Great Western, Scotrail and Virgin are all expected to increase the cost of some tickets by between 3% and 6%. Some fares could rise by 10%.
Southeastern, meanwhile, does not use inflation to set regulated fares, so season ticket holders could see rises of 1.6% or more. The Northern franchise of West Yorkshire PTE is also one of the few operators not to base regulated fares on RPI.
Gerry Doherty, leader of the TSSA rail union, says these hikes are "legalised robbery".
"Just because they have to cut regulated fares in the new year, they are now jacking up unregulated fares by more than 10% on some routes," he adds. "Passengers not only have to travel in cattle-like conditions but are treated as cash cows, to be milked by as much as these greedy companies can get away with whenever possible."
According to the TSSA, unregulated fares account for more than half of all tickets sold - and have already risen twice this year.
Smith adds a warning that some train operators will tinker with off-peak tickets restrictions, forcing passengers into buying more expensive tickets.
How regulated train tickets are set
The majority of train companies use July’s RPI measure of inflation plus 1% to set regulated fares. As RPI stood at -1.4% during the month most regulated fares should technically fall by 0.4% in absolute terms come January 2010.
|Regulated fares include|
Commuter fares (weekly, monthly and season tickets)
Anytime day singles and returns
Walk-on fares in commuter areas for short distances
|Long-distance off-peak fares|
However, regulated fares do not include advance and anytime fares on long-distance routes.
Previously, train operators were able to increase some individual regulated fares by as much as 5% as long as the average increase across all fares was no more than RPI + 1%. In February 2009, however, the government announced this flexibility would be scrapped in 2010.
Replaced as the official measure of inflation by the consumer prices index (CPI) in December 2003. Both the Retail Price Index and CPI are attempts to estimate inflation in the UK, but they come up with different values because there are slight differences in what goods and services they cover, and how they are calculated. Unlike the CPI, the RPI includes a measure of housing costs, such as mortgage interest payments, council tax, house depreciation and buildings insurance, so changes in the interest rates affect the RPI. If interest rates are cut, it will reduce mortgage interest payments, so the RPI will fall but not the CPI. The RPI is sometimes referred to as the “headline” rate of inflation and the CPI as the “underlying” rate.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).