Government hints it may back down over planned increases in the face of mounting opposition
Passenger groups and unions are stepping up pressure over train fares with a day of action, as the government hinted it may back down over planned rises that would result in some season tickets costing £1,000 more in 2015 than in 2011.
Fares will rise in January by three percentage points above the July RPI figure, which will be announced on Tuesday. That is expected to leave fares between 5% and 6% higher. Passenger groups said train fares were going up three times faster than salaries. With train operators allowed to raise some fares by an additional 5%, some commuters could see double-digit price rises on their tickets next year.
The transport secretary, Justine Greening, said she would ask for government money to keep fares down.
The Campaign for Better Transport’s chief executive, Stephen Joseph, said: “The government knows they can’t continue to hit [car] commuters – that’s why they’ve postponed the fuel duty increase. Now they need to give the same help to rail users.”
He said commuters in the south-east routinely spent up to 15% of their salary getting to work in London, and warned that the price of an annual season ticket from many towns – including Brighton, Oxford, Luton and Reading – would rise by more than £1,000 between 2011 and 2015.
Demonstrations are expected on Tuesday at London’s Waterloo and dozens of other stations around the country, organised by the TUC-backed Action for Rail campaign. Elsewhere, a season ticket for rail travel between Liverpool and Manchester would see an annual increase of over £160, and between Leicester and Derby would go up nearly £120, at current rates.
Frances O’Grady, the TUC’s deputy general secretary, said: “These fare rises will add even more pressure to passengers feeling a massive squeeze on their incomes. At the same time the government is asking the train operators to make cuts to staff on trains and stations and in ticket offices. Passengers are being asked to pay more to get less. We want cuts to rail fares, not rail staff.”
A similar rise planned for January 2012 was modified to one percentage point above inflation in George Osborne’s autumn statement, but at the time he restated increases scheduled for 2013.
But Greening said there could be a similar U-turn by the Treasury this autumn if there was “spare money”. She added: “I am keen to see what we can do to keep fares down to something affordable.”
While reducing the deficit by cutting subsidy was important, the government needed to “strike a balance” with continued investment in the network and affordable fares.
She said she was hopeful money would be made available. “If you don’t ask, you don’t get, so I’ll make sure I’ll ask.”
Greening pledged in March to “end the era of inflation-busting fare rises”. However, the government has also called for the taxpayer subsidy to be cut, which means more funding has to come from ticket revenue. The McNulty report on value for money in the rail industry concluded that substantial efficiency savings could be made, and Greening has demanded spending cuts of £3.5bn a year by 2019. The current subsidy is around £4bn a year.
Train operating companies maintain that they do not benefit directly from the additional rise in regulated fares, as payments they make or receive under the terms of their franchises are adjusted. Michael Roberts, the chief executive of the Association of Train Operating Companies, said: “The government decides the average increase of commuter ticket prices and other regulated fares which train companies will be required to introduce. Any flexibility train companies have within the rules is to maximise revenue for the government.”
Unions say the proposals in the McNulty report mean train operators are likely to shed thousands of station staff, guards, catering staff and ticket offices to cut costs – putting up to 20,000 jobs at risk.
The Department for Transport is expected to announce on Tuesday morning which firm will run services on the West Coast mainline between London and Glasgow for the next 15 years, which could see the end of Richard Branson’s Virgin Trains. First Group, which runs Thameslink and the Great Western route, is tipped to take the franchise, as first reported in the Guardian. Both Branson and the RMT union claim that First Group’s bid for the service can only be profitable if staff and onboard services are drastically cut.
First Group did not take up the option to run its Great Western franchise to term, saving an estimated £800m in payments to the government, although it is now bidding to win the contract again.
The shadow transport secretary, Maria Eagle, said: “Passengers are set to lose out no matter which companies win these new longer franchises because ministers have promised successful bidders they can hike fares, cut services and close ticket offices. Instead of the strict 1%- above inflation cap proposed by Labour, the government has told train companies they can levy fare rises of 8% above inflation in 2013 and 2014 and 6% above inflation for the rest of the franchise.”
Eagle said ministers should consider how bidders have “treated the spirit of previous contracts, for example not gaming the system to evade payments to the taxpayer”, before awarding new franchises.
The RMT said it was considering a ballot for industrial actionadding that First Group’s bid was “based on the same kind of over-geared financial projections that led to the collapse of the GNER and National Express contracts on the East Coast – forcing the government to renationalise the service”. The union said the winning West Coast bidder was likely to remove onboard shops and catering with a potential loss of 800 train crew jobs.