Ministers postponed announcement of tariff increases after rail plan backlash

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Ministers postponed announcement of tariff increases after rail plan backlash


An announcement that rail fares will rise 3.8% in March was postponed by ministers last week after the furious backlash against the government’s lowered plans for rail investment in the north.

The tariff hike for England and Wales, not yet publicly confirmed but contained in leaked documents seen by the Guardian, will be the largest in nine years.

The rise is tied to the July Retail Price Index (RPI) inflation figure, and ministers have in the past attempted to describe the annual increase as a freeze in real terms.

Ministers were to announce the hike last Friday. However, government spinners advised against releasing the news after overwhelmingly negative public reaction to the integrated rail plan, unveiled by Transportation Secretary Grant Shapps the previous week.

The plan, released on November 18, was trumpeted by Shapps as a set of record-breaking rail investments – but masked the removal of the eastern part of HS2 and the failure to build a promised new high-speed line. TransPennine connecting Manchester and Leeds, which had been considered the heart of the Northern Powerhouse Rail project.

Dissatisfaction with the rail plan grew as details were discussed over the weekend, with northern leaders and transport authorities in particular expressing their anger. Senior Transport Department officials on Sunday said ministers should postpone news of increases that would add hundreds of pounds to the cost of train travel for regular commuters already reeling from skyrocketing food costs and fuel.

The government had already hiked fares by an exceptional 1% above RPI inflation in March this year, arguing that passengers had to pay more to offset the additional billions in Treasury subsidies that enabled passengers to pay more. trains to operate during the pandemic. That meant a 2.6% increase in regulated fares, which are set by the government and represent about half of all tickets sold, including season tickets, off-peak returns, and anytime fares in urban areas. Other fares normally increase by a similar overall average.

Grant Shapps confirmed the scrapping of the HS2 rail section to Leeds on November 18. Photography: Daniel Leal / AFP / Getty Images

The move raised fears of a repeat that would mean a 4.8% increase in 2022 – potentially allowing Shapps to present the 3.8% increase as better than expected.

However, the RPI measure was much higher than the most commonly used measure of inflation, the Consumer Price Index (CPI), which was only 2% in July. Campaigners and unions have highlighted how rail fares have risen sharply in real terms – and significantly faster than wages – over the past decade, as the government has frozen fuel rights for motorists in absolute terms at 57.9 pence per liter.

News of the steep fare hike will increase concerns about the future of the railways, with many former regular commuters working from home since the start of the pandemic or traveling only two or three days instead of five. Passenger numbers peaked last month at 70% of pre-Covid levels, while provisional DfT figures suggest the Omicron variant may have seen numbers drop this week. Operators and passenger groups have argued for tariff cuts to stimulate demand, but the Treasury has been keen to recoup its spending.

With passengers told to avoid public transport at the start of the pandemic, fare revenues have fallen by £ 8.6 billion in 2020-2021, according to figures released this week by the Office of Rail and Road.

A DfT spokesperson said: “We do not comment on the speculation. It is important to ensure that the right balance is struck between the contribution of passengers and the unprecedented support from taxpayers of over £ 14bn. A tariff announcement will be made in due course.

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