Rail season-ticket prices set to rise as subsidies scrapped

A cap on the prices of railway season tickets is likely to be dropped, leading to substantial price increases for more than half a million commuters.

A cap on the prices of railway season tickets is likely to be dropped, leading to substantial price increases for more than half a million commuters.

The Strategic Rail Authority (SRA) is expected to announce this month that it will abolish the cap from January. Workers in the South-east and long-distance commuters would be the worst affected.

The Authority is likely to claim that the change is necessary because it is unfair for taxpayers to subsidise cheaper tickets for people who chose to commute to London from cheaper homes outside the South-east. The change, reported in today's Times, would occur despite the fact that a fifth of trains are still arriving late.

A spokeswoman for the Department of Transport said last night: "We're aware that the SRA has been consulting on this issue but no decisions have been taken." The SRA was unavailable for comment.

The price cap on the tickets at present stands at one per cent below the inflation rate. A study published yesterday by the rail consultants AEA Technology found that fares would have to rise by three per cent above inflation every year for 20 years to prevent a serious increase in overcrowding in the South-east. The SRA published a consultation paper on fares last summer in which it asked whether the Government should subsidise fares or spend money on improving the network.

The SRA's director of strategic planning, Jim Steer, said: "Our consultation found a general view that it is highly questionable to continually reduce fares in real terms. Even the people you might expect would most protest accepted the point."

In recent years, the numbers of people buying cheaper homes outside the South-east but still commuting to London for higher wages, has increased markedly. Great North Eastern Railway now has 50 season- ticket holders paying £8,184 a year to make the 472-mile round trip from York to London to work each day.

Most rises in fares since privatisation have hit occasional rail travellers. By contrast, under the price cap on season and saver tickets, those fares have fallen by 1 per cent in real terms each year since 1999.