Rail passengers to suffer price rises despite deflation
* Dan Milmo
* The Guardian, Wednesday 22 April 2009
Passengers on some of Britain's busiest rail routes will be hit by fare increases next month despite the return of deflation to the UK economy.
National Express East Coast is to impose 11% price hikes on some advance purchase tickets, with East Midlands Trains and First Great Western also imposing increases as the recession squeezes franchise owners. East Midlands is pushing up a swath of off-peak fares by 5%, while FGW is raising some peak-time fares into London by up to 3%.
The fare increases are being imposed against a backdrop of mounting tension between train operators and the government, which is refusing to relax the payment terms on franchises despite the recession.
Stagecoach, the owner of East Midlands Trains, is embroiled in a dispute with the Department for Transport over demands for extra subsidy on its South West Trains franchise, while several analysts have warned that National Express may be forced into abandoning or rewriting the east coast deal.
National Express and FGW stressed that some fares would be falling in price as well, but the increases were confirmed as the retail price index entered negative territory - which could push down season tickets next year.
"We are very concerned that as a result of the recession, train companies are going to be pricing people off trains and back on to roads. The government needs to take a fresh look at fares regulation," said Stephen Joseph, executive director of Campaign for Better Transport.
First Capital Connect and Cross Country also confirmed that they would impose a handful of fare increases next month to correct "anomalies" in their current ticket prices. National Express East Anglia is also pushing up some advance fares. Virgin Trains, Southeastern and London Midland are among the franchises that have no plans to introduce fare increases next month.
The rail minister, Lord Adonis, has confirmed that season ticket prices will fall next year if the RPI index is still negative in July. Increases in most rail fares, including season tickets, are capped at inflation plus one percentage point, using the RPI figure for the preceding July. RPI could fall to -2% in July, according to some estimates, which means that season tickets face a decline of at least 1% in 2010.
The looming fall in fare revenues has alarmed franchise owners who are tied into expensive contracts and train companies that are dependent on the commuter market.
UK - rail prices to rise despite deflation
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Re: UK - rail prices to rise despite deflation
Train companies condemned as passengers face 'scandalous' price rises
Rail passengers are facing another round of 'scandalous' fare rises as train operators raise prices by up to 11 per cent during the recession.
By David Millward, Transport Editor
Telegraph
Last Updated: 10:44AM BST 23 Apr 2009
Several companies are planning to push up the cost of tickets, where increases are not capped by the Government, to make up an expected shortfall in fares.
The biggest rises are being drawn up by National Express East Coast, which is ready to push up the cost of some tickets by 11 per cent next month – although as a concession, anyone booking these fares via the internet will get a 10 per cent discount.
It will push up the cost of a trip from Skipton in Yorkshire to London from £13.50 to £15 for a ticket bought in advance.
Another company, East Midlands is looking to push up some fares by five per cent on journeys just outside the morning and evening peak.
Other companies also understood to be planning a round of rises are First Great Western, First Capital Connect and Arriva CrossCountry. However the amount of the proposed rises has yet to be disclosed.
The move comes at a time when the industry knows that it is likely to be forced to cut commuter fares at the end of the year.
So-called regulated fares - such as season tickets and many off peak journeys booked on the day of travel - are controlled by the Government. In almost all cases any rise is limited to one per cent above the retail price index, and are calculated in July.
Despite RPI being predicted to remain negative - it is currently -0.4 pc and expected to fall further - the Government has refused to alter the formula. It means such fares, which cover 62 per cent of journeys, will have to come down next January.
This has left rail companies with a hole in their finances, which they are looking to fill by pushing up the cost of other journeys where they can.
Even though National Express is cutting the cost of some journeys on its east coast route, its decision to push up the cost of trips on other routes will come as no surprise to the industry.
It has already introduced a number of cost-cutting measures such as reducing catering on its services on both the East Coast Main Line and in East Anglia.
The news of the latest round of fare rises drew angry condemnation from Anthony Smith, chief executive of the consumer watchdog, Passenger Focus.
"I think passengers will be exasperated by this," he said. "For years they have faced fare rises and now in a recession they are going up again.
"Train operators are in danger of driving passengers away."
There was even stronger condemnation from Gerry Doherty, general secretary of the Transport and Salaried Staffs' Association rail union.
"This is a real rip off even by the low standards of the rail companies when it comes to jacking up fares," he said.
"This mean that off peak fares and advance tickets will have jumped by more than 16 per cent in just five months. This is a real scandal and it must be stopped."
But Geoff Hoon, the Transport Secretary, refused to intervene. "They are private companies and have to make the right decision in their own commercial interests.
"There is a range of fares out there and people have to look at them to make the right choice."
Rail passengers are facing another round of 'scandalous' fare rises as train operators raise prices by up to 11 per cent during the recession.
By David Millward, Transport Editor
Telegraph
Last Updated: 10:44AM BST 23 Apr 2009
Several companies are planning to push up the cost of tickets, where increases are not capped by the Government, to make up an expected shortfall in fares.
The biggest rises are being drawn up by National Express East Coast, which is ready to push up the cost of some tickets by 11 per cent next month – although as a concession, anyone booking these fares via the internet will get a 10 per cent discount.
It will push up the cost of a trip from Skipton in Yorkshire to London from £13.50 to £15 for a ticket bought in advance.
Another company, East Midlands is looking to push up some fares by five per cent on journeys just outside the morning and evening peak.
Other companies also understood to be planning a round of rises are First Great Western, First Capital Connect and Arriva CrossCountry. However the amount of the proposed rises has yet to be disclosed.
The move comes at a time when the industry knows that it is likely to be forced to cut commuter fares at the end of the year.
So-called regulated fares - such as season tickets and many off peak journeys booked on the day of travel - are controlled by the Government. In almost all cases any rise is limited to one per cent above the retail price index, and are calculated in July.
Despite RPI being predicted to remain negative - it is currently -0.4 pc and expected to fall further - the Government has refused to alter the formula. It means such fares, which cover 62 per cent of journeys, will have to come down next January.
This has left rail companies with a hole in their finances, which they are looking to fill by pushing up the cost of other journeys where they can.
Even though National Express is cutting the cost of some journeys on its east coast route, its decision to push up the cost of trips on other routes will come as no surprise to the industry.
It has already introduced a number of cost-cutting measures such as reducing catering on its services on both the East Coast Main Line and in East Anglia.
The news of the latest round of fare rises drew angry condemnation from Anthony Smith, chief executive of the consumer watchdog, Passenger Focus.
"I think passengers will be exasperated by this," he said. "For years they have faced fare rises and now in a recession they are going up again.
"Train operators are in danger of driving passengers away."
There was even stronger condemnation from Gerry Doherty, general secretary of the Transport and Salaried Staffs' Association rail union.
"This is a real rip off even by the low standards of the rail companies when it comes to jacking up fares," he said.
"This mean that off peak fares and advance tickets will have jumped by more than 16 per cent in just five months. This is a real scandal and it must be stopped."
But Geoff Hoon, the Transport Secretary, refused to intervene. "They are private companies and have to make the right decision in their own commercial interests.
"There is a range of fares out there and people have to look at them to make the right choice."
