Regulated fares, which include season tickets and saver tickets, are rising by an average of 6% across the board from January 2 in a move described by passenger groups as "wrong" and "daylight robbery". Unregulated fares, which include most leisure and advanced-fare tickets, will rise by an average of 7%, with some fares increasing by over 11%.

The Conservatives said the government had "totally failed" rail users. The shadow transport secretary, Theresa Villiers, said: "Today's bad news for passengers demonstrates very clearly that the Labour government has let passengers down because it has failed to give value for money and has left passengers to put up with crisis levels of overcrowding as well as rising fares, with the most packed trains running at over 170% capacity."

Increases to regulated fares - which are determined by the government and account for 40% of tickets sold - are limited to 1% above retail price index (RPI) inflation, which is 4.2%. However, the fares for the new calender year are set at the RPI figure for the previous July, which was 5% - meaning that rail users could be stung by a 6% increase. However, operators can increase the price of some regulated rail tickets by up to 10% as long as the average increase remains within the RPI plus 1% increase.

The rail analyst Christian Wolmar said there was no evidence to suggest rail fare increases would be used to fund improvement, instead they were part of a "mistaken policy" of reducing government subsidies to the rail system to 25% by 2014.

The increases could be counterproductive for rail operators, he said. "The price of petrol is dropping, the economy is struggling and fares rising - all this could have the effect of pushing people off the rails." But the Association of Train Operating Companies (Atoc) argues the rises are necessary for rail improvements and are in line with government policy.

The Atoc chief executive Michael Roberts said: "Passengers in recent years have helped pay for 20% more services, and performance in the first half of this year is at the highest level since records began, with more than 90% of trains arriving on time. Yet, since 1996, in real terms, overall rail fares have risen by just 5% and standard-class regulated fares are actually lower than they were in the year before privatisation."

It emerged yesterday that the government asked rail operators this week to take passengers' reduced circumstances into consideration - a plea that appears to have been largely ignored.

A spokesman from the Department for Transport said: "It's clear that passengers have concerns about the value for money they receive from train companies, and the secretary of state this week reminded operators that difficult economic circumstances will make these concerns more acute, and called on them to bear this in mind when setting their fares."

He added that the government has committed £15bn to railway companies over five years, of which £10bn will be ring-fenced to increase capacity.

The fare increases have angered passenger groups and rail users. Anthony Smith, chief executive of consumer watchdog Passenger Focus said: "It's completely unfair. In the real world we have inflation at 4.5% and a falling pound, but in the rail world we are seeing a 6% increase in fares. It's completely out of kilter with the economic situation we are facing in this country and it is just wrong."

He said the government needed to reconsider linking fares to inflation and said a company's investment and performance should also be taken into account. "We cannot simply go on dumping costs on to the passenger in this way," he said.

Gerry Doherty, leader of the transport union TSSA, said: "This makes a mockery of the government's pledge to help hard-working families through the recession. Ministers should have cancelled this annual inflation-plus increase if they were serious in helping people just get to work, let alone keep their jobs. If every other business is cutting prices, why should the rail companies be allowed to get away with daylight robbery?"

Stephen Joseph, executive director of the Campaign for Better Transport, said the government's policy on rail fares was "completely against the government targets to tackle climate change".

The highest annual increase is for unregulated fares on CrossCountry services, which will rise in January by an average of 11%. In contrast, London Midland has frozen its unregulated fares which, in effect, will be reduced by 5%.

See also:

Commuter group hits at rail fares rise

Financial Times: November 22 2008
By Robert Wright, Transport Correspondent

Rail passengers face from January the largest single fares increase since privatisation, with the average cost set to rise by as much as 11 per cent.

Regulated fares - which include season and off-peak on-the-day tickets - would rise by 6 per cent at most train operators, the Association of Train Operating Companies said.

The increases result from the policy followed by the government since January 2004, where regulated fares rise annually by one percentage point above retail price inflation. It had been known since August the increases would be substantial because they are based on the inflation statistics for July, when RPI was 5 per cent.

However, Anthony Smith, chief executive of Passenger Focus, the passenger lobby group, attacked the Department for Transport's decision to go ahead with the price rises, given inflation had since started falling.

The DfT said it had called on operators to bear in mind, when setting fares, the economic difficulties that passengers faced. It would continue to work with Passenger Focus to improve transparency and confidence in the fares system.

Theresa Villiers, shadow transport secretary, said the government had failed to bring rail costs under control.

Regulated fares will rise by an average 8 per cent from January 2 next year at Southeastern Trains, where fares have been increasing at RPI plus three percentage points since 2006 to pay for new high-speed train services due to start next year. Increases at Merseyrail Electrics - whose services are subsidised by local authorities - will be only 5 per cent.

There will be some even higher increases in unregulated fares such as first class tickets, peak-time tickets and advance purchase tickets. Most operators are increasing these fares by 7 per cent, with the highest fare increases 11 per cent at Arriva Cross Country and 9 per cent at First Capital Connect.

Many train operators in recent years have undertaken, when striking franchise agreements with the transport department, to increase unregulated fares to reduce their subsidy needs or increase the amount they can pay the department. The DfT is seeking to reduce its contribution to the rail network from about 50 per cent of total costs now to 25 per cent by 2014, despite a substantial planned investment programme.

Michael Roberts, Atoc's chief executive, said fares were still only 5 per cent higher in real terms than at privatisation in 1996 and regulated fares were still lower.

See also:

Season ticket buyers face hefty rises as train companies dodge fare regulations

The Times: November 22, 2008
Ben Webster, Transport Correspondent

Some rail season tickets will rise by more than 10 per cent in January as train companies take advantage of loopholes in the system of fares regulation. The average season ticket will rise by 6 per cent under the Government’s price cap of inflation plus 1 per cent. The cap is based on the inflation figure for July and does not take account of any subsequent changes. This July, the rate was 5 per cent but it has now fallen to 4.2 per cent and is set to fall further.

Commuters on Southeastern will pay 8 per cent more because the Department for Transport claims that they are benefiting most from extra investment.

However, many passengers face even higher increases because the DfT only caps the average rise across the franchise and allows train companies to vary the price on individual routes by up to 5 per cent above inflation. Commuters between Gillingham and London will pay 10.2 per cent more, adding £280 to the cost of an annual season ticket. There will be a £260 rise (9.5 per cent) between Tonbridge and London.

An East Midlands Trains season ticket between Derby and Nottingham will rise by 8.9 per cent.

Anthony Smith, the chief executive of Passenger Focus, the passenger watchdog, said: “The companies are exploiting the rules to impose much higher increases on individual routes. The rules must be tightened to give passengers proper protection.”

He said that the increases would come at the worst time for many passengers, who were already struggling financially. “These fare rises hark back to a time of high inflation and spiralling energy costs. The economy is different now, but the seemingly unstoppable rail price express ploughs on.”

Unregulated fares, which include peak singles or returns, will rise by an average of 7 per cent, with some fares going up by more than 11 per cent. The highest increase among the unregulated fares are on Arriva’s Cross-Country services, which cover the whole of Britain and which will be rising by 11 per cent on average.

Train company chiefs said that the rises were necessary to pay for investment on the railways, but opposition MPs and transport unions condemned the increases.

The Conservatives said that passengers were “picking up the tab” for Labour’s failure to get costs under control. However, they declined to say whether they would cancel government plans to raise fares by inflation plus 1 per cent every year until 2014.

TSSA, the white collar rail union, said that the train companies had “a licence to print money”.

Norman Baker, the Liberal Democrat transport spokesman, said that ministers should have frozen fares in the same way that fuel duty increases had been deferred to help motorists.

However, Michael Roberts, the chief executive of the Association of Train Operating Companies, said that since 1996, rail fares had risen by just 5 per cent in real terms and standard-class regulated fares were actually lower than they were in the year before privatisation in the mid1990s.

The Prime Minister’s spokesman said: “It is clear that passengers do have concerns about the value for money they receive from train companies. Secretary of State Geoff Hoon this week reminded operators that difficult economic circumstances will make these concerns more acute and called on them to bear this in mind when setting their fares.”

See also:

Anger at train fare rises

Western Morning news: November 22, 2008

RAIL passengers in the Westcountry will be hit by some of the biggest fare increases in the UK after train companies revealed a steep rise in ticket prices.

Some Cross Country Trains routes will see fares soar by more than 11 per cent – almost three times the rate of inflation.

And First Great Western, which runs services out of Penzance, Plymouth and Exeter, says average prices will go up by 7 per cent.

The news comes days after it was revealed the strained South West rail network will get just eight new carriages to help cope with rising passenger levels over the next eight years.

Passengers have reacted with a mixture of astonishment and fury, with one Westcountry MP condemning the "astronomical" price rises which are due to come into force in January 2009. Regular rail user Adrian Sanders, Lib-Dem MP for Torbay, said: "Are we going to see a percentage equivalent rise in punctuality, comfort or capacity? I don't think so.
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"I really don't see what justification there can possibly be for above-inflation increases given the fact passenger numbers are increasing. It can only be that the companies want to put people off using the trains because they don't have the extra capacity to deal with them."

Cross Country is putting up the cost of its regulated fares, which include season tickets, by an average of 6 per cent.

The company, which runs regular services from Penzance, Plymouth and Exeter to Manchester, Birmingham and Edinburgh, will push its unregulated fares up by 11 per cent. These include most leisure and advance fare tickets.

Cross Country said the changes were necessary to "allow us to continue investing in a better travel experience for our customers".

But Mr Sanders said: "Train operators have been saying this for many years now and to be fair there have been some improvements in punctuality and refurbishments.

"But the key to this is increasing capacity. We should be trying to encourage more people to use railways, which means putting on more services and not putting on above-inflation increases in fares.

"We live in a country where it is cheaper to fly to Alicante than it is to get a train from Exeter to London. Putting up prices even more will just keep people away from trains."

FGW will put up regulated fares, which are linked to inflation, by 6 per cent and unregulated fares by 6.6 per cent.

This will see the cost of a standard (peak) return ticket from Exeter to Paddington rise from £179 to £196.

However, some fares will fall in price. The same journey from Penzance to Paddington will go from £257 to £239. Some first-class fares will also fall.

An FGW spokesman said: "From our point of view we have done our very, very best to keep fares down. The issue we face is our costs are rising above inflation and we've got to deal with that now. We've tried to reduce the impact on customers."

South West Trains, which runs regular services from Plymouth and Exeter to Waterloo, will put up regulated fares by 6 per cent and unregulated fares by 7.2 per cent. The cost of a peak return from Exeter will rise from £105 to £113.

A spokesman for the company said: "South West Trains continues to invest, including £3.5 million on station improvements last year, £1.8 million on security guards, £12 million overall on ticket machines and car park expansions."

Peter Mulley, Westcountry secretary for the passenger group Railfuture, said: "Obviously this is something we are very disappointed about. The main effect will be that people will make fewer journeys on the trains.

"It should be said that if passengers can find an off-peak ticket they will probably find a bargain. However, the ticket system is so complicated that passengers are confused by it all.

"There has been more investment in the services in recent years but continually putting up prices is not the way to encourage rail use."

David Redgewell, regional spokesman for the Campaign for Better Transport, said the Government was to blame for the fare increases because it was cutting the amount of direct subsidy from the taxpayer.

"This means that in the future prices will just go up and up as the burden falls on the fare payer," he said.

He said improvements to the service in the South West were limited to a three- mile stretch of line between Axminster and Chard.

"I'm yet to see how Cross Country are improving; they have already cut their buffet service. Most of the improvements will be outside the South West," he said.

Anthony Smith, chief executive of customer watchdog Passenger Focus, said: "These average fares will no doubt mask some very steep rises on particular routes. We will study the real impact as we unearth the details in the next few days."