Passengers will bear the brunt of Government’s bailout of rail companies during pandemic

by

Train fares will be frozen until March… before soaring by 2.6%: Passengers will bear the brunt of Government’s bailout of rail companies during pandemic

  • Fares usually rise in January and are linked to the retail prices index (RPI)
  • The cost of an average annual season ticket will go up from £3,064 to £3,144
  • Fare rise comes as passenger numbers remain at less than 50% of pre-pandemic levels

By Tom Payne Transport Correspondent For The Daily Mail

Published: | Updated:

Train fares will rise by 2.6 per cent from March 1 as passengers bear the brunt of the Government’s multi-billion bailout of rail operators.

The increase is the first above-inflation rise since 2013 and will see the cost of an average annual season ticket go up from £3,064 to £3,144.

Fares usually rise in January and are linked to the retail prices index (RPI), a measure of inflation which was announced as 1.6 per cent in July.

Train fares will rise by 2.6 per cent from March 1 as passengers bear the brunt of the Government’s multi-billion bailout of rail operators. The increase is the first above-inflation rise since 2013 and will see the cost of an average annual season ticket go up from £3,064 to £3,144 [Stock photo]

Insiders say the Treasury has been pushing for an increase of 1 per cent above the RPI amid concerns over the multi-billion pound cost of propping up rail firms during the pandemic.

The Department for Transport had hoped to sweeten the deal with an announcement around flexible season tickets, but sources say this has been indefinitely delayed as passenger numbers stagnate.

Examples of 2021 fare rises 

Here are 10 examples of potential rail fare rises across Britain, including in Transport Secretary Grant Shapps’s Welwyn Hatfield seat.

The table compares the price of a 12-month season ticket bought now with one purchased from March 1 next year following a 2.6 per cent increase.

It does not include the price paid if within-London travelcards are also purchased for Tube and bus journeys in the capital:

ROUTE – CURRENT PRICE – MARCH 2021 PRICE – INCREASE

  • Woking to London – £3,440 – £3,529 – £89
  • Brighton to London (any route) – £4,980 – £5,109 – £129
  • Liverpool to Manchester (any route) – £2,692 – £2,762 – £70
  • Neath to Cardiff – £1,808 – £1,855 – £47
  • Whitehaven to Carlisle – £2,032 – £2,085 – £53
  • Welwyn Garden City to London – £3,100 – £3,181 – £81
  • Gloucester to Birmingham (any route) – £4,356 – £4,469 – £113
  • Tweedbank to Edinburgh – £2,900 – £2,975 – £75
  • Bangor to Llandudno – £1,204 – £1,235 – £31
  • Edinburgh to Glasgow (any route) – £4,200 – £4,309 – £109

In better news for commuters, the delay will give them several weeks to buy an annual pass at 2020 prices.

The 2.6 per cent figure relates to regulated fares, which make up around half of all fares and include season tickets on most commuter routes.

Last night’s announcement will spark concern among rail bosses who fear a significant rise will continue to drive customers away. 

Passenger numbers were at 28 per cent of pre-pandemic levels on Monday, according to official figures. 

The level has not risen above 43 per cent since the end of March and has been in steady decline since September.

Around £3.5billion of taxpayers’ money was spent on plugging the shortfall in ticket revenues during the first six months of the pandemic.

The Department for Transport announced in September that the arrangements – which effectively renationalise the rail network – will be extended until at least March 2022. 

At the time Sir Michael Holden, who used to run South West Trains, said the emergency measures were ‘the worst possible arrangement to run the railways’. 

Rail minister Chris Heaton-Harris said yesterday: ‘Delaying the change in rail fares ensures passengers who need to travel have a better deal this year.’ 

He added: ‘By setting fares sensibly, and with the lowest actual increase for four years, we are ensuring that taxpayers are not overburdened for their unprecedented contribution.’

But Paul Tuohy, of the Campaign for Better Transport, said he was bitterly disappointed at the fare rise ‘just as people will be returning to workplaces next year’.

He added: ‘We understand that the Treasury needs to recoup some of the money… but the way to do that is by encouraging passengers back on to the trains, not by pricing them off.’

How big is the increase and where does the money go? Key questions answered on rail fares rise 

Rail passengers are facing an increase in ticket prices. Here are ten key questions around the controversial issue:

– How big is the fare rise?

Fares will go up by an average of 2.6 per cent from March 1 next year.

– What normally determines the figure?

In the past seven years, rises in regulated fares have been linked to July’s Retail Prices Index (RPI) measure of inflation, which this year was 1.6 per cent.

– What’s changed?

The Government is using RPI +1 per cent.

– Why?

Rail Minister Chris Heaton-Harris says the Government wants to make sure taxpayers are ‘not overburdened’, as they are already covering franchises’ losses to keep services running despite the collapse in demand caused by the coronavirus crisis.

– What about unregulated fares?

Whereas rises in regulated fares such as season tickets are set by the UK, Scottish and Welsh governments, operators are free to determine unregulated fares including Advance tickets. But unregulated fare rises are expected to match regulated fares due to the Government taking on operators’ financial liabilities.

– What else is different to normal?

Fares usually become more expensive on the first working day of every year. The upheaval caused by the virus crisis means the 2021 rise is being delayed until March 1.

– How much more expensive has train travel become in recent years?

Office of Rail and Road figures show that between January 2004 and January 2020, average fares increased in real terms by 15 per cent.

– Where does the money go?

The Rail Delivery Group says 98p of every £1 spent on train fares goes towards running and maintaining services.

– Is there any way of avoiding the fare rise?

Savvy commuters can renew their season tickets in the days before the annual increase.

– Any other tips on limiting the cost of train travel?

Passengers can save money by getting a railcard, travelling off-peak and booking in advance, although these options are not available for many journeys, particularly those made by commuters.