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Inflation-busting rail fare rises, that are adding to the cost of living crisis, could have been brought to an end next year if Ministers had not negotiated such poor contract extension deals with private train companies, new figures from Labour reveal. 

Passengers have been facing annual fare rises of as much as nine per cent a year since the Government reversed Labour’s policy of strictly applying the cap on annual fare rises to every route. 

New figures, obtained from parliamentary answers, reveal that the deals signed by Ministers to extend just two rail franchises will see train companies pay back £78.5m less in franchise payments next year than in 2011/12. This could have funded an inflation-only fare rise in 2014 at a cost of £67.5m, according to the Government’s own figures included in documentation for Autumn Statement 2011 (when the government u-turned on plans to increase annual fare rises from RP1+1% to RPI+3%).

Following the collapse of the Government’s franchising programme, twelve existing franchises are set to be extended by as much as fifty months. The lost revenue resulting from the poor negotiating of these extensions is in addition to the one-off waste of more than £48m of tax-payers money, as a result of Ministerial incompetence over the failed letting of the InterCity West Coast contract. 

Maria Eagle, Shadow Transport Secretary, speaking ahead of confirmation of the RPI rate that will be used to set January 2014’s fare rises, said:

“Inflation-busting increases in rail fares are adding to the cost of living crisis facing households, with yet another increase of as much as nine per cent due at the start of next year. David Cameron claims to want to end the era of above inflation fare rises, yet we now know that he could have done so if it wasn’t for the appalling deal secured by his transport ministers when they negotiated rail franchise extensions. To add insult to injury, instead of sticking up for passengers he has decided to side with the private train companies and let them hike fares by as much as nine per cent next year. The least the Prime Minister could do for hard-pressed commuters is to strictly enforce the cap on fare rises on every route, as Labour has pledged to do to tackle the cost of living crisis.” 


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