Rail passengers to pay above-inflation fare rises next year

Alistair Darling, the Transport Secretary, was accused of presiding over a "shambles" yesterday when he confirmed that rail passengers would be hit by above-inflation fare increases in the new year.

Mr Darling announced a new regime in which charges paid by passengers on key commuter routes and those travelling on off-peak "saver" fares would increase by one percentage point above the Retail Price Index (RPI). The policy replaces a system introduced in 1999 that has pegged prices to one point below the RPI.

At the current inflation rate prices on the regulated routes - about 44 per cent of the total - would rise by 4 per cent.

The £2,720 cost of a Brighton to London annual season ticket will increase by about £109. On average, passengers will pay an extra £45 a year in real terms for season tickets by January 2006, while revenue will be increased by about £32m to £42m each year by 2006.

The Transport Secretary indicated that he might delay a decision on the cost of off-peak saver fares until after the next election.

"Saver fares will continue until 2006 unless it is possible to introduce a better regime earlier than that and provided the proposal demonstrates clear benefits to passengers and taxpayers," Mr Darling said.

He also called on the industry to draw up plans for a national rail discount card, an initiative welcomed by groups campaigning to attract more passengers to the railway.

Tim Collins, the shadow Transport Secretary, said that under Labour passengers had endured "later trains, fewer trains and now vastly more expensive trains".

The Transport Secretary's announcement was made after strong indications from the Strategic Rail Authority (SRA) that some services would be cut to improve reliability and official figures that showed two out of ten trains were late.

The Rail Passengers Council said that it was "a bleak day" for customers and the rail users' group Railfuture described above-inflation rises as unacceptable.

Mr Darling told the House of Commons: "This was a difficult decision but it's essential to strike the right balance between the contribution from the farepayer and the contribution from the taxpayer." He said that four years ago rail fares covered 72 per cent of the cost of running and improving the railway but that figure was now about 53 per cent, with the taxpayer paying the rest.

In the past few years, public spending on rail investment had increased by 164 per cent. "We have taken the difficult decision that in future it is reasonable for fares to increase in line with investment."

George Muir, director general of the Association of Train Operating Companies, "cautiously welcomed" the new regime. "We are disappointed by the deferral of a decision on the deregulation of saver fares. Regulation of savers since privatisation has contributed to severe overcrowding during peak leisure periods on some long- distance routes."

He welcomed the opportunity to work with the SRA on evaluating a national discount railcard. "However, the need for a national railcard must be fully researched and evaluated to ensure that it is successful in generating rail travel and increasing revenue."

The association said companies would not gain financially from the proposed changes because the additional revenue would be returned to the SRA.