regulated rail Fares to rise by 6%What does this mean?

Bruno

The Department for Transport has recently stated that rail fares will rise by nearly 6% on March 5th. Transport Secretary Mark Harper said, “This is the biggest ever government intervention in rail fares.” Inflation stood at 10.7% in November, under the consumer price index measurement used by the UK. What are regulated rail fares? There are two types of rail fare: regulated and unregulated. Regulated fares are overseen by the government following the privatisation of the rails which was completed in 1997. They include most standard, and saver return fares, as well as weekly season tickets. They also tend to apply to London and major city commuter routes as they carry the most passengers. Why are regulated rail fares increasing?

The 5.9% is in line with the average earnings growth in July of this year rather than the RPI (retail price index), a measure of inflation which is normally used to calculate regulated rail fares.

Figures from ONS showed average earnings growth to be 6% in the private sector and 2% for the public sector in May/July this year. Due to inflation the majority of workers have suffered a cut in real wages. The government says the rise is necessary to support the investment and the financial stability of the railway. Harper said, “I’m capping the rise well below inflation to help reduce the impact on passengers.” However, rail users are not content with these price rises.

David Sidebottom, director at watchdog Transport Focus, said: “Noone likes prices going up. In our latest research, less than half of passengers think the railway currently performs well on delivering value for money tickets.”

“After months of unreliable services and strike disruption, it’s clear that too many passengers are not getting a value for money service.”

“Capping fares below inflation and the delay until March is welcome and will go some way to easing the pain, but the need for reform of fares and ticketing in the longer-term must not be forgotten.”

This clearly outlines the outrage of over half of the population of rail users.

Labour also condemned the 5.9% rise. Labour have said the near-record fare rise will mean commuters between Birmingham and London will pay nearly £700 more next year, than this year and the average commuter faces paying a staggering £3,466 for their season ticket, an increase of £1,272, or 58% more, than in 2010.

Shadow transport secretary Louise Haigh also said “This savage fare hike will be a sick joke for millions reliant on crumbling services.

“People up and down this country are paying the price for 12 years of Tory failure.”

The management of rail fares has recently led, to industrial action, with strikes across the rail network for the past 6 months, as unions seek pay improvements and guarantees over working conditions, and this price increase will cause even more upset in an industry that is in turmoil.