Rail price rise misery for commuters

Passenger fares to go up by an average of 6 per cent in new year

Rail companies are facing calls to change the way they calculate fare increases, after a loophole in the law allowed them to introduce price rises well above the rate of inflation.

The fare increases, the biggest to hit rail passengers since the railways were privatised 15 years ago, will come into force at the start of next year, with the economy looking set to nosedive into sharp recession. Regulated fares, which include season tickets and fares bought for off-peak trains, will rise by an average of 6 per cent at most train operators, though some will rise by even more.

For example, commuters travelling from Gillingham, Kent, to London will see the cost of their season tickets increase by almost 11 per cent, adding an extra £280 to their annual travel bill.

Virgin trains will add an extra £404 to the cost of a season ticket between Coventry and London.

Companies are only allowed to increase regulated rail fares by an average of 1 per cent above the inflation rate recorded in the Retail Price Index (RPI).

But train companies used the RPI figure from last July, when the economy was growing much faster than it is now.

The RPI has since fallen from 5 per cent to around 4 per cent, and by the time the fare increases come into force next year the fare rises could be as much as 3 per cent above inflation.

"The fare increase system has worked well in other more normal times, but these are clearly not normal times," said Anthony Smith, the chief executive of Passenger Focus, the independent rail consumer watchdog.

"The system is designed for a stable economic climate. Clearly that is not what we have at the moment. Other rules have been torn up to help deal with the economic crisis. There is a very strong case for altering the rules here, too, as an emergency measure."

A change in the rules was also backed by the Campaign for Better Transport lobby group. "Common sense should take over here," said its chairman, Stephen Joseph. "The current level of inflation should be used to ensure that rail users are not unfairly penalised."

The Chancellor, Alistair Darling, also came under pressure from passenger groups and MPs to protect rail users from the fare increases when he announces his package to help Britain through the economy on Monday.

Details of the pre-Budget report are still being hammered out, making it possible for Mr Darling to reduce or postpone the fare increases.

The Liberal Democrat transport spokesman, Norman Baker, said: "Freezing their fares would give a huge boost to many hard-pressed families.

"The Government has repeatedly frozen fuel duty for motorists in the light of external circumstances. It's about time ministers showed the same consideration to train passengers."

The Association of Train Operating Companies (Atoc) blamed the Government's desire to make a 40 per cent cut to the subsidy given to the rail industry by the tax payer by 2014.

"Since 1996, in real terms, overall rail fares have risen by just 5 per cent and standard class regulated fares are actually lower than they were in the year before privatisation," said Atoc's chief executive, Michael Roberts.

He said the increased revenue would help pay for "major investment".