Train companies face fare curb but campaigners say prices still off the rails

The government will introduce a limit on fare hikes by rail companies but commuters will still have to put up with a hefty hike.

by Gabriella Griffith
Last Updated: 09 Oct 2013
There was bittersweet news for train commuters this morning, after the government’s ticketing review failed to stop above inflation fare increases. Rail operators will still be able to raise fares on certain routes at twice the rate of inflation, with the maximum increase capped at 6%.
 
It is a marginal improvement for train users, though; previously, regulated fares could have gone up by 9.1%.
 
The announcement is part of a review into ticketing by the government – no doubt it was expecting a more positive response from the public to its ‘fare overhaul’. But campaigners have pointed out while train users face annual fare hikes, motorists are currently enjoying a freeze in petrol duty, which will continue until 2015.
 
Joining the controversial fare cap are a number of other measures designed to improve our rail fare system. The Fares and Ticketing review being published today by Transport Secretary Patrick McLoughlin will include ‘part-time’ season tickets and a pilot which could put a stop to single and return fares being priced almost the same. A constant cause of befuddlement, we’re sure you’ll agree.
 
Labour took its chance to stick the boot in: Mary Creagh, shadow transport secretary, described the cap on fares as ‘cold comfort for commuters’.
 
‘It has taken 18 months, delivers fare increases of up to 6% and is too little too late. This announcement doesn't go as far as Labour's plans which would prevent train companies from increasing fares beyond 1% above inflation,’ she said.
 
Coming a day after the East Coast Main Line said it had returned £208m of profits to the taxpayer, this isn't great: in fact, opponents of the rises would argue that it shows exactly why the line should remain under government control.
 
Directly Operated Railways (DOR), the state-owned group which took control of the London to Scotland rail route in 2009, added that it expected to deliver £1bn to the Treasury through dividend and premium payments by 2015.
 
The news is unlikely to sway the coalition in its determination to re-privatise the line – a process which is expected to begin later this month. So far Eurostar has been the main contender to take control of the line, but bids are expected from others, including Virgin Trains.

(Interestingly, there's been something of a surprise re-shuffle at Virgin Trains this week - long-serving boss Tony Collins and chief operating officer Chris Gibb both stepped down - just as the company prepares to bid for a number of lines).  
 
Private train operators have argued the figures from DOR shouldn’t be compared with other operators’ vitals – saying train franchises deal with their own conditions and could be undergoing infrastructure works, which would impact their results.
 
‘The fact is that the biggest contribution to taxpayers from the rail sector comes from a private franchised train operator,’ said a Stagecoach spokesperson.
 
‘The current commercial return to the taxpayer from East Coast has not been competitively tested and taxpayers would get a better deal under a private sector operator following a full competitive tender.’
 
Suffice it to say that Stagecoach is also expected to submit a bid to run the line…

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