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TRAIN FARES SET TO DROP NEXT YEAR

&9632;&nbsp; Rail fares to be cut for first time since privatisation<br />&9632;&nbsp; Cuts come as train firms struggle with franchise payments<br />&9632;&nbsp; Rail companies could hike non-regulated fares to plug gap<br /><br />RAIL fares are set to come down for the first time since privatisation, but there were fears yesterday that commuters might be hit by rising railway car park charges and increased off-peak rail fares as train operators try to balance their books.<br /><br />Falling inflation will mean most rail fares will drop from January, since next year&rsquo;s regulated train fares are tied to July&rsquo;s retail price index (RPI), which dropped by 1.4 per cent.<br /><br />Regulated fares cover season tickets and off-peak returns across Britain, and some day return fares in London and the south-east. They cover about 60 per cent of all UK journeys and the majority of commuter fares.<br /><br />Transport secretary Lord Adonis said the fare cuts were good news for passengers, whose regulated fares have gone up by six per cent this year despite the economic slump.<br /><br />But unions warned that commuters&rsquo; pockets could still be hit, as rail operators put up prices elsewhere.<br /><br />&ldquo;Commuters can expect car parking charges to go up... companies will also hike first class and advanced fares,&rdquo; said Gerry Doughty from the Transport Salaried Staffs&rsquo; Association.<br /><br />Adonis added he was removing train operators&rsquo; ability to increase individual fares next year by up to five per cent above the national fare change.<br />Rail body Atoc hit out, saying &ldquo;this constitutes a rule change on franchise agreements from the government&rdquo;.<br /><br />The government rents out rail franchises, such as the ill-fated East Coast rail line, to operators such as FirstGroup and National Express.<br /><br />Train operators are now discussing with the Department for Transport how changes will be implemented, so as to avoid disadvantaging the companies, Atoc added.<br /><br />&ldquo;The reality is that train operators will be looking to the government to affect some financial support. Some compensatory arrangements should be made for rail operators,&rdquo; one industry expert said.<br /><br />A Virgin Trains spokesperson added that there will be an industry consensus that the change to the franchise agreement needs to be addressed.<br /><br />The news comes at a tough time for rail companies. Ailing rail operator National Express will hand back its East Coast franchise to the government at the end of the year, having failed to renegotiate payments for the line.<br /><br />And in May, FirstGroup said annual profits at its rail division had fallen 21 per cent due to the impact of the recession.