Labour's Proposals for Fares capping and Rail re-organisation

Annual rail fares for commuters from Brentford and Isleworth into central London have seen a 17% rise during the life of this Government and could rise by another 19% by 2018 the Labour Party revealed last week. Labour’s Shadow Transport Secretary Mary Creagh warned of the risk of five more years of Tory failure on tackling rising fares or reforming the broken rail market. She published new figures from the Commons Library showing that rail fares, already up by 21.5 per cent since 2010, could rise by a further 24 per cent by 2018 under another Conservative Government. She also set out Labour's commitment to rail reform.

Mary Creagh said
“David Cameron has failed to stand up for working people struggling with the cost-of-living crisis. He’s allowed train companies to sting passengers with inflation-busting fare rises of over 20 per cent since 2010, costing them hundreds of pounds. A Labour Government which will cap annual fares on every route and enact the biggest railway reforms since the Tories’ botched privatisation, delivering a better deal for passengers and taxpayers.”

Fares for those commuting into Central London from Isleworth & Brentford stations (for example) have seen a 17% rise since 2010 (£184 pa) and could rise by another 19% (£240) by 2018.

I welcome Mary Creagh’s proposals. Rail fares in the UK are the most expensive in the world, and the whole system is terribly fragmented, thanks to the botched privatisation of John Major’s Government. I’m glad that the Labour leadership is committing to address the mess of the privatised rail system and is bringing forward proposals that will benefit passengers and the taxpayer.

The solution doesn’t mean recreating the old British Rail, but addressing investment in the rail system, and our party is committed to stop rail companies ripping passengers off with a confusing pricing structure and a minefield of different tickets.

Labour's plans to reform the railways to get a better deal for taxpayers and passengers include:
Easing the pressure on fare payers by passing on the savings from our reforms by capping annual fare rises on every route, simplifying fare structures and creating a new legal right to the cheapest ticket.
Bringing Network Rail together with a new representative passenger rail body to contract routes; co-ordinate industry services and skills; oversee stations, fares and ticketing; and ensure customer satisfaction across the network;
Legislating to allow a public sector operator to take on lines and challenge the train operators on a level playing field to secure value for money;
Building cooperative principles to increase passenger and employee involvement, including encouraging mutuals and co-operatives into the industry;

If you are a regular rail passenger and are fed-up with rising fares for a worse service, do consider the following:

Annual changes to rail fares come into force in January, on the first working day of the calendar year. On 19 August new RPI statistics will be announced. This is the figure that the Department for Transport will use to set regulated fare increases for 2015.
Train operating companies have full commercial freedom over all unregulated fares while the Department for Transport sets an annual cap on the average percentage increase permitted for regulated fares (e.g. most season tickets, and some Off-Peak and Anytime Day tickets).
Train companies can vary regulated fare rises by up to a certain percentage either way of the ‘cap’ set by government, provided the average of all increases does not breach it – a policy known as ‘flex’. The last Labour government abolished the flex but this was reintroduced by the Coalition in 2011. This allowed train operators to increase regulated fares by as much as 5 per cent above the rate set by the department. In 2013 the Government reduced the flex to 2 per cent. See: http://www.parliament.uk/briefing-papers/sn01904.pdf
The June rate of RPI is 2.6 per cent. The Department for Transport’s fare rise formula for regulated fares is RPI+1. In Autumn Statement 2013, the government lowered this to RPI for 2014 only. If the Department’s standard formula applies next year, this would mean that commuters on certain routes could face increases of up to 5.6 per cent (2.6 per cent + 1+ 2 per cent flex). See: Office for National Statistics, Consumer Price Inflation, June 2014, [http://ons.gov.uk/ons/rel/cpi/consumer-price-indices/june-2014/stb---co…] & Autumn Statement, 2013, para 1.272 [https://www.gov.uk/government/uploads/system/uploads/attachment_data/fi…]
Figures from the House of Commons Library show regulated fares have increased by 21.5% since May 2010 with forecasts suggesting a further 24% rise by 2018.
A Labour government would abolish the flex so that companies could not vary annual fare rises on different routes. This would mean that commuters on every route would have certainty that their fares would be capped at the level set by government.