Fares still unfair

Regulated rail fares are set to rise by 1 per cent in January, after inflation figures released today (August 18) show an unchanged Retail Price Index (RPI) in July.

 
Over the last two years, the government has pegged regulated rail fares to RPI, before which they were pegged to RPI plus 1 per cent.

 
Yesterday’s announcement (August 18) will make next year’s rise the smallest increase in regulated fares in five years, but this will be little comfort to commuters, who, according to a new TUC analysis, have been pummelled by fares rising three times faster than wages since 2010.

 
The TUC found that while fares on average went up by 25 per cent in the last five years, wages petered along at only 9 per cent.

 
Although the government pledged before May’s election to “freeze” fares over the next five years, it merely capped increases to RPI, a measure of inflation that, as Full Fact has pointed out, is “statistically flawed” and consequently is no longer used by the office of national statistics.

 
If fares were pegged to the more accurate and official measure of inflation, the Consumer Price Index (CPI), regulated fares would have risen by only 0.1 per cent.

 
Yesterday’s CPI figures belie the government’s pledge that it would put an end to “inflation-busting fare increases.”

 
The 1 per cent rise also disguises the fact that the cap represents an average – regulated fares on certain routes can fluctuate to as much as five per cent above the cap.

 
Although the small rise in fares is making headlines today, it will only cover regulated rail fares, which represent less than half of all fares.

 
Unregulated fares, on the other hand, vary considerably, and any savings passed on to commuters by regulated fares are expected to be reversed by fares that are set at the discretion of rail companies.

 
The most recent Rail Fares Index shows just how much freedom rail companies have in ratcheting up unregulated fares.

 
Since 1995, when rail privatisation begun, unregulated standard fares have had an overall real terms increase of a jaw-dropping 32.9 per cent. Over the same time period, long distance standard fares that were not regulated shot up, in real terms, by almost 50 per cent.

 
Out of reach

 
Unite and other unions have argued that passenger travel is quickly becoming out of reach for the average working person, who is faced with an impossible choice between affordable housing outside urban centres or cheaper travel living closer to work.

 
And despite the much-lauded government price cap on fares, any savings will be reabsorbed as an added burden to the taxpayer – to the tune of £700m, according to Department of Transport figures.

 
Bringing rail services back into the public sector, on the other hand, would bring substantial savings to both the taxpayers and passengers, according to research commissioned by Action for Rail.

 
The research shows that ÂŁ1.5bn could be saved over the next five years if routes, including the Northern, Transpennine and West Coast Main Line, were returned to the public sector.

 
It also estimates that season tickets could be 10 per cent cheaper by 2017 if routes coming up for re-tender were run by the public sector.

 
A full third (ÂŁ520m) of this ÂŁ1.5bn saving would come from recouping the money private train companies pay in dividends to their shareholders.

 
Unite national officer for passenger transport Bobby Morton made the case for renationalising the railways.

 
“The TUC’s analysis once again reinforces the case that rail privatisation has been an unmitigated disaster for the taxpayer and the put-upon commuter,” he said.

 
“It makes strong economic sense to bring the railways back into public ownership and start the process of reducing rail fares, the highest in western Europe, for passengers who have had to endure the 25 per cent hike in rail fares since 2010.”

 
“The only people to have benefited from rail privatisation are the shareholders of the rail companies who are scooping up large dividends,” Morton added. “Railways should be for the public good and economic benefit of the UK and not just for a cartel of rail firms seemingly unable to cut fares.”