Government caps planned rail fare rise

Marion Dakers
COMMUTERS will be hit by smaller than expected fare rises in January, after the Department for Transport yesterday lowered the planned price hikes to an average of 4.2 per cent.

The DfT cut the planned increases to one per cent above the retail price index (RPI) rate of inflation for the next two years, down from the previously announced three per cent.

Some passengers will be spared hikes of as much as £200 over the next two years, the department said, though the fare system means ticket prices on individual routes could still rise by up to 9.2 per cent. The move covers national rail services as well as London bus and Tube tickets.

A DfT spokesman said the change comes at a cost of approximately £300m for the current parliament, which will be paid for using “headroom in other parts of the department budget”. It will not affect plans for investment in the rail network, he added.

The DfT is expected to reduce its budget by 15 per cent in real terms during the five years to 2015, under the coalition’s spending review.

Plans to raise the fare hike limit to RPI plus three per cent had already been delayed once, after chancellor George Osborne backtracked in last year’s Autumn Statement.

Rail companies, which are bound by the DfT’s pronouncements on price rise caps, welcomed the change as “a positive move for passengers”.

Transport commentator Christian Wolmar told City A.M.:“They wanted to announce some good news during the conference, and this is quite a clear one to pick. It’s not going to cost a vast amount in terms of the department’s overall budget and it’s politically savvy.”