Ministers faced growing pressure today to spare London commuters from the threat of the biggest rise in rail fares in a generation.
With inflation soaring to a new 40-year high last month, campaigners fear next year’s hike in regulated fares for regular rail users could be the biggest since the railways were privatised in 1996.
The latest potential blow to passengers came as services across the network recovered following yesterday’s strike by around 40,000 rail workers, which reduced timetables to 20 per cent of normal services.
Although talks between the RMT and Network Rail over the dispute were set to resume today there was little sign of a breakthrough, with ministers hardening their rhetoric on introducing new laws to crack down on industrial action. More strikes are planned for this weekend and next month and London Underground workers are also set walk out on August 19.
The Government must now decide next year’s regulated fare increase, which is typically pegged to July’s retail prices index measure of inflation. ONS figures released last week showed RPI hit an eye-watering 11.8 per cent in June with economists and campaigners expecting it to rise higher next month and later this year. Economists have warned that the new figure could hit 12 per cent.
According to data from the Rail Delivery Group, the previous biggest rise in rail fares was 5.9 per cent in 2009.
Faced with the prospect of such steep rises, ministers were being urged to find a different formula to calculate next year’s rail fare rises. A government source said options were currently being worked through but that no decision had yet been taken.
Norman Baker, from the Campaign for Better Transport, said: “If fares rise by 11 per cent next year, the cost of season tickets into London will rise in some cases by many hundreds of pounds. This would be a massive blow to passengers, and price many off the trains altogether, just when we need a strong public transport network to fight climate change.”
Research by the Campaign for Better Transport showed an 11.8 per cent rise in rail fares would mean an annual season ticket into the capital from Woking would rise by £432, from Brighton by £626 and from Reading by £595.
Yael Selfin, chief economist at KPMG, said that based on their current forecasts for the benchmark Consumer Prices Index measure of inflation, which hit 9.4 per cent in June, there was a risk that the July figure for RPI could hit 12 per cent.
She said: “Our current forecasts are for CPI to reach 9.6 per cent in July and peak at 10.7 per cent in October. Risks are currently on the upside so we would expect any revisions to see a higher number than that, and given the way RPI has tracked CPI we would expect it to reach 12 per cent in July.”
After the pandemic crippled the rail industry as workers stayed at home, fare increases have been delayed from January until April for the past two years to encourage people back on to the trains. Mr Baker said he had written to Chancellor Nadhim Zahawi to ask him to freeze fares for next year.
“The Government has helped out drivers with the cost-of-living crisis, now it’s time to help public transport passengers too,” he added.
Responding to questions about the possible hike in rail fares next year, a Department for Transport spokesman said: “We do not comment on speculation. No decision has been taken on national rail fares.”
This year fare rises were capped at 3.8 per cent — the rate of RPI in July 2021 — as ministers ditched the formula used the previous year which was RPI plus one per cent. But even if the Government agreed to raise fares by six per cent — which is just over half of June’s RPI figure of 11.8 per cent — that would still mean very steep rises for regulated fares which cover season tickets and off-peak tickets between UK cities. The increase in rail fares will add to the squeeze being felt by millions of households.
