Prime minister indicates government U-turn on rail fares, promising to cap them at 1% above inflation rather than 3%
David Cameron has promised to cap rail fares at a lower level than planned for two more years as the battle for Britain’s “squeezed middle” heats up.
Kicking off the Conservative party conference in Birmingham, the prime minister said rises in regulated rail fares and London bus and tube tickets would be capped at the RPI rate of inflation plus 1%, rather than the RPI plus 3% formula that had been set out in the 2010 spending review.
Downing Street said that would mean an annual saving of £45 for season ticket holders, while savings for some commuters could be as high as £200 over the next two years. It said the cap would benefit more than a quarter of a million annual season ticket holders and millions of Londoners, who would make an annual £25 saving on travelcards for zones one and two inside the city.
The move signifies another U-turn from the coalition government, having indicated in June that fares would rise at 3% above inflation from January. As inflation was running at around 3%, rail fares were due to increase by 6% on average and up to 11% in the most extreme cases. But that was met with almost universal opposition. Even train operators were against it, fearing it would alienate passengers.
The Department for Transport added that it hoped to maintain the cap on fares for franchised train operators from January 2015 onwards as the UK moved into a general election year.
Labour argued that the new cap was “meaningless” as the train companies could treat it as a benchmark for average increases, leaving room for much bigger rises on some routes, as long as the median increase panned out at RPI+1%.
The shadow transport secretary, Maria Eagle, said: “If this U-turn is to genuinely help passengers, then the government must stand up to the train companies and strictly enforce this new cap on every route.”
She said it was a “humiliating U-turn” for the prime minister, coming just a month after he forced Tory MPs to vote against Labour’s attempt to cap fare rises at 1% above inflation. “The government has spent two years claiming that these eye-watering fare rises were essential to fund investment despite the National Audit Office warning that they were just as likely to boost train company profits.”