Rail passengers warned of further fare rises as £37.5bn upgrade unveiled

Network Rail’s plan for extra 170,000 commuter seats by end of decade based on annual fare rises staying 1% above inflation

Rail passengers have been warned they face at least six more years of above-inflation fare rises – potentially adding more than £1,000 to the cost of some annual season tickets by 2019.

Outlining a £37.5bn upgrade plan for 2014-19, Network Rail said it would provide an extra 170,000 commuter seats at peak times by the end of the decade, but assumed annual fare rises would stay at 1% above the retail prices index (RPI) measure of inflation throughout the period.

It comes days after rail fares for season ticket holders rose by an average of 4.2%, and ticket prices by 3.9% overall, and prompted warnings that passengers had already suffered enough pain from 10 years of inflation-busting rises.

The TSSA rail union said: “[Passengers] should not now be expected to face another six years of even higher fares … they have been persecuted enough already.”

Rail customer watchdog Passenger Focus said: “Frankly, passengers have had enough. We feel the rail industry is about to hit its moment of truth.”

If annual season tickets continue to rise by 4.2% a year (based on July RPI plus 1%) over the next six years, this would push up the typical cost from £2,191 to £2,804. However, there are big differences between routes: an annual ticket from Canterbury, Kent, to London, which now costs £4,812, would jump to £6,159 by 2019, based on that formula.

The Network Rail plan envisages 225 million more passengers a year and 355,000 more trains by 2019. It aims to provide 20% more seats on trains into central London during the morning rush hour and 32% more into large cities in England and Wales.

Projects include electrification schemes, including the Great Western and Midland main lines, station improvements at Birmingham New Street and Reading in Berkshire, and reopening 31 miles of railway lines in Scotland closed under the Beeching cuts 50 years ago. However, the package must be approved by the Office of Rail Regulation to take effect.

Network Rail’s group strategy director, Paul Plummer, said it was assuming annual fare rises would stay at RPI plus 1%. He added that altering the annual fare formula was a matter for ministers and that if a government wanted to make changes it would need to increase the annual public subsidy to the railways. The plan predicts a cut in the subsidy to £2.6bn-£2.9bn by 2019, down from £4.5bn in 2009.

Network Rail’s chief executive, Sir David Higgins, said the industry had entered an “era of trade-offs”, adding: “Increasingly, we have to balance the need to build more infrastructure, run trains on time and cut costs. In many areas, choices will need to be made.”

Anthony Smith, chief executive of Passenger Focus, said: “Passengers have already suffered 10 years of above-inflation increases.” Any “normal” industry could have delivered lower prices on the back of the big increase in demand seen in the rail industry in recent years, he said, but the opposite had happened.

“There needs to be greater efficiencies of scale and a better use of new technology. If there was more standardisation across the industry, this would help,” Smith added.

“Currently, the train companies all run different types of trains which adds unnecessary costs. Only when these changes happen will we have a more efficient industry which, in turn, will mean the fare increases that have hit passengers so hard in recent years can start to level off.”

Campaigners have claimed that rail fares for season ticket holders have risen by as much as 50% in the past decade, making travelling to work by train an extravagance that people struggle to afford.

The government had intended to allow train companies to raise the average price of regulated fares, which include season tickets, by RPI plus 3% this and next January.

In October ministers announced it would instead be limited to RPI plus 1%, a 4.2% rise. However, Labour said the government had undermined its pledge by reinstating flexibility, allowing firms to raise non-regulated fares.

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