Rail fare row: MPs reject peak-time premium

Commons transport committee demands long-term ticket price policy and argues against higher fares on rush-hour trains

Ministers should establish a long-term policy on rail fare increases and rule out aggressive hikes in peak-time ticket prices, MPs have urged.

The House of Commons transport committee called for an end to years of government prevarication on rail fares, which has seen successive administrations alter ticket pricing policies from one year to the next. The committee said the latest example, where a planned increase of 3% above inflation had been abandoned for the second successive year, left the policy on season ticket prices in limbo.

“We recommend that the Department for Transport set out a long-term policy on regulated fares,” the report says.

Despite the retreat from increasing prices by 3% above the RPI rate of inflation, season tickets are still subject to inflation-busting price rises this year because ministers have set the fares cap at RPI +1%.

The rail minister, Norman Baker, was criticised by commuters after he claimed this week that fare increases were “not nearly as expensive” as portrayed by the media. The average price of a rail season ticket will rise by 4.2% this year.

The committee urged the government to quash one of the most incendiary suggestions from a review of rail industry costs, which suggested raising fares for the busiest rush-hour services.

The study by Sir Roy McNulty, the former chairman of the Civil Aviation Authority, said the proposal could limit overcrowding on the most popular routes. However, the Commons committee says: “We recommend that the government rule out forms of demand management which would lead to even higher fares for commuters on peak-time trains”.

The MPs say some lower-paid workers have no choice but to travel at peak times: “Higher prices at peak times might make a difference to demand at the margin but would, for the most part, be a tax on commuters who have no effective choice over how or when they travel.”

Responding to the report, Simon Burns, the transport minister, said the government had lowered the fares cap to 1% above inflation in recognition of the fact that “family budgets are being squeezed”. An ongoing fares review would look at “rewarding passengers who are able to avoid the busiest services”, but the minister declined to give further details.

He said: “We have been quite clear that the government’s fares and ticketing review, which is due to conclude in May, is not about squeezing more revenue out of regulated fares and that any changes stemming from it would need to be balanced and fair.”

Privately owned train operators have argued that having the freedom to set airline-style prices will help solve overcrowding, although such a move would threaten a political backlash among commuters in south-east England.

Louise Ellman, the Labour MP who chairs the transport committee, said the government should “shine a light” on the annual £4bn taxpayer subsidy of the railways to ensure it does not leak to train operators “in the form of unjustified profits.”

The Association of Train Operating Companies accused Ellman of repeating “hearsay” about franchise owners. Michael Roberts, its chief executive, said: “We flatly reject the unfounded accusation that train companies are profiteering.”

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