Consumer groups urge Osborne to cap fare rises after inflation jumps

George Osborne: Cutting the top rate of tax has not won him the support of millionaires (PA)

George Osborne was under pressure last night to cap rail fare price rises after it emerged that the cost of a train ticket could go up by more than 10 per cent in the new year.

The scale of the imminent fare rises emerged yesterday as official figures showed an unexpected jump in inflation to 3.2 per cent last month.

Fares are due to rise on 1 January by 3 percentage points above the July rate of inflation, meaning ticket prices will increase on average by 6.2 per cent. But with train operators allowed to raise some fares by an additional 5 percentage points, some commuters could be paying 11.2 per cent more.

Last year, Mr Osborne announced that ticket price rises would be capped at 6 per cent – compared with a planned 8 per cent rise. He is now under growing pressure – not least from his own Transport Secretary – to do the same again. Justine Greening said on Monday she would ask for government money to keep fares down.

"I'm keen to see what we can do to keep fares down to something affordable," she said. "I'll be looking at whether there is a way of doing this in the autumn."

Julian Huppert, the MP who co-chairs the Liberal Democrats' transport committee, warned that his party could not support fare rises on what was already the most expensive railway network in Europe.

"People are struggling to make ends meet against a backdrop of wage freezes and rising utility bills. George Osborne has to realise that people cannot be expected to pay huge rises in rail fares on top," Mr Huppert said.

However, Treasury sources played down the chance of more public money being found to reduce the increases – which are supposed to fund extra investment in the railway network. They said public money had already been spent on capping the rise in petrol duty.

Yesterday, consumer campaigners joined rail unions and passenger groups in a day of action to protest at "massive" fare increases and cuts to jobs and services. Stephen Joseph, the chief executive of the Campaign for Better Transport, said: "Rail fares will rise three times faster than salaries. With the economy flatlining, this is untenable.

"The Government knows they can't continue to hit commuters – that's why they've postponed the fuel duty increase. Now they need to give the same help to rail users."

The leader of the Transport Salaried Staffs Association, Manuel Cortes, said: "It is complete nonsense to say fares have to rise above inflation every year to pay for new rail projects. This is all about squeezing the commuter until the pips squeak. It is little more than daylight robbery."

Protests were being held at more than 40 stations yesterday. Campaigners held up a huge banner at London's Waterloo Station, which read: "Cut rail fares, not rail staff."

Transport minister. Theresa Villiers: "Rail fares are making an important contribution to improvements at a time when taxpayer funds are limited by the need to tackle the deficit."