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Rail Fares to Increase 8% in January

UK High-Speed TrainCommuters in Britain are set to pay more for rail fares in the coming year as the government moves to reduce its £5 billion a year train subsidy. Transport Secretary Philip Hammond is due to press ahead with plans that will see train ticket prices rise about 30% by 2014 in an attempt to transfer the burden of railway costs from taxpayers to passengers.

Due to these changes, the price for the most popular fares will likely rise an average 8% in January. The fare increase will be much more than the 5.1% rate of inflation. These tickets include off-peak long-distance journey savers and season tickets, which account for about 50% of tickets sold. These have been fixed at the retail price inflation (RPI) figures from last July, plus 1%…..that is until now. As part of the austerity budget, the formula for regulating rail fares was changed from RPI, plus 1% to RPI, plus 3%. This amendment will stay in effect for three years from January.

It’s been estimated by economists that the inflation figure for this July will be around 5.1%, which means train ticket prices will rise 8.1% next year. This is a significant jump in rail prices compared to previous years and will likely pressure British passengers, who already pay 20% more than their European counterparts. Commuters from the outer suburbs already pay £2,000 a year for a season ticket. Come next year they will have to pay an extra £160 because of the fare rises. Commuters travelling on longer-distance journeys currently pay £4,000, but £320 will be added to this in the new year. At this rate, regulated fares will rise about 30% by 2014.

However, the government has relaunched ‘flex fares,’ which permits train operators to impose an extra 5% increase on some season tickets – as long as other ticket prices are reduced by the same level. Because of this, prices may rise by 13% next year on some popular commuter journeys. Aside from this, some other fares – like those for first-class – aren’t subject to government regulation and are due to increase by much more.

Campaign for Better Transport (CBT) spokesman Stephen Joseph warned that this rise in fares could affect the nation’s ability to attract business. These price increases are coming during a real time of financial pressure on households and the wider economy. Since fares are already 20% more than the European average, a further price rise could begin to affect the competitiveness of London with the rest of the continent, he added.

Association of Training Operating Companies (ATOC) commercial director David Mapp says that the government has made a hard decision to ensure the continuation of important investment into the rail network. This includes the addition of more carriages in order to cope with overcrowding and more capital projects, like electrification. Taxpayers won’t have to contribute as much to railway operations due to the money raised from the increased fares, while vital investment will be able to continue, he added.

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