Osborne faces a delicate balancing act on train ticket hikes

David Hellier
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WHEN the majestic Shard formally opened earlier this summer I was interested to learn that its architect Renzo Piano only catered for 48 car parking spaces in the building’s bowels.

“It’s another big shift,” he was quoted as saying. “To tell people, look, stop going around in cars.”

Piano’s thinking makes a lot of sense. London is too populated a City to create buildings that, through the provision of extensive underground parking facilities, encourage the use of cars rather than public transport. But then maybe the Italian architect hadn’t followed too closely the nation’s recent policy on train fare rises.

Train fares over the past few years have a record of rising way ahead of inflation as operators, rolling stock companies and government take advantage of a captive commuter pool.

Yesterday, as inflation figures came in above expectations, the government announced that train fares would rise by an average of 6.2 per cent through a combination of the unexpectedly high retail price inflation rate (3.2 per cent) and an extra three per cent due to the formula the government has agreed with the train operating companies.

Transport minister Theresa Villiers made clear that the fare rises were necessary in order for Britain’s railway network to run more smoothly.

She said a huge programme of rail improvements was underway and that the government was investing in the network, but that passengers also had to shoulder some of the costs.

Villiers’ hard line, however, may not be the end of the story. It swiftly emerged that the Liberal Democrats are opposing the three per cent rise above inflation rise, favouring a one per cent below rate.

And transport secretary Justine Greening hinted that a begging bowl trip to the Treasury might yet bear fruit.

“If you don’t ask, you don’t get,” said Greening, as MPs on all sides calculated the cost of the planned rises to their constituents.

The train users’ lobby will no doubt remind ministers that car owners were given a boost in June when the chancellor George Osborne decided to delay a 3p per litre rise on fuel duty for a year after much public pressure.

With the Lib Dems and Labour campaigning against these latest train fare rises, it would be no surprise to see the Treasury suddenly find some spare money to at least limit the rise to one per cent above inflation as it did last year after initially planning another three per cent plus rise.

For some commuters the planned rises are very steep (see our chart below) and on top of this, often there have been massive increases in car parking charges for those who leave their cars at their local train station.

There’s still a way to go on this debate – and my hunch is that extra money will be found from somewhere or other to alleviate some of the pain for the nation’s commuters.

Standard Chartered’s $340m settlement with New York’s Department of Financial Services after it was accused last week of being in breach of US sanction with Iran is a victory of sorts for chief executive Peter Sands and chairman John Peace. After reacting slowly to the US regulator’s charge that the bank was a “rogue institution” and seeing his company’s share price hammered in the financial markets, Sands especially has stepped up a gear to get the matter sorted.

Christopher Wheeler of Mediobanca said yesterday: “We’d all like to be able to value the stock on fundamentals again.” Yesterday’s settlement will allow that process to begin.

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