The moment of truth approaches
08 August 2012
Regulation of rail fares is a good thing. In the absence of much competition it affords some protection to passengers. The complex formulas that govern fares regulation are largely based around one calculation – train companies can raise an overall ‘basket’ of fares by a certain amount. Current government policy states this is the retail price index (RPI) figure plus three per cent. This policy was set in train by the last government and gives life to the avowed intention to shift the burden of funding the railways from the taxpayer more to the fare payer.
Last year the Secretary of State, taking account of the economy and the rises year after year that passengers have endured, limited the rise to RPI plus one per cent. A previous minister had also taken away the ability of the train companies to use flexibility in the way they applied to rises to load up certain routes – it spread the pain.
The inflation figure used is the July figure which will be published on 14 August 2012. While inflation has dropped sticking to plus three with full flex will mean real pain for some passengers. We hope the Secretary of State follows her logic from last year – RPI plus one maximum and perhaps less flex? Passengers would be grateful.