Rail fares to rise by 4.1% from January 2014
Trade unions and consumer groups have reacted with outrage to the news that rail fares will increase by 4.1%.
The above-inflation rise in regulated rail fares (which include season tickets) introduced is to be introduced January 2014.
The increase means rail fares will have increased by close to 40% between January 2008 and January 2014 - the sixth time in seven years that fare rises have outstripped wages. Over the same period, average earnings have increased by just 15%, with rail fares rising nearly three times faster than wages.
In Scotland, price rises are capped at inflation rate, while there has been no announcement on price rises in Northern Ireland or Wales.
Train operating companies are allowed by the government to increase regulated fares by inflation (as measured by the retail prices index in July) plus 1%. The Office for National Statistics announced this morning that the RPI figure for July was 3.1%.
Stephen Joseph, chief executive of the Campaign for Better Transport, said: "Getting to work is now the biggest single monthly outgoing for many commuters – more than food, more than housing. One of the surest ways of stamping on any green shoots of recovery is to price people off the trains and out of the jobs market. For the sake of the economy we should end above inflation fares increases now and start planning for fare reductions."
Frances O'Grady, General Secretary of the Trades Union Congress (TUC) added: "Every year hard-pressed rail commuters have to hand over an ever greater share of their earnings just to get to and from work. Wage-busting fare rises are not even going on much needed service improvements either. Instead, passenger and public subsidies are lining the pockets of the shareholders of private rail companies.
"You only have to look at the nationalised East Coast mainline to see that public ownership of the railways not only works, it provides a better deal for passengers and taxpayers alike."
ASLEF, the train drivers' union also condemned the price rise. Mick Whelan, General Secretary said: "Soaring fares for passengers – just one of the increased costs of privatisation we are all suffering –is driving more and more people into transport poverty."
The TUC, in partnership with other unions, is organising a campaign called Action for Rail campaign, which will take part in around 50 demonstrations at train stations across the country – including London King's Cross, Birmingham New Street and Manchester Piccadilly.
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).