Rail passengers will see fares rise by an average of 3.4% from 2 January, the industry announced on Tuesday.
It marks the largest fares hike for passengers since 2013, when fares increased by 3.9%.
The increase will cover both regulated fares, which includes season tickets, and unregulated tickets, which covers off-peak and leisure tickets.
The Rail Delivery Group (RDG) noted that the increase is below the regulated fares increase of 3.6%, which was July’s RPI measure.
In announcing the decision the RDG said that over 97% of money from fares goes back into “improving and running the railway, underpinning the rail industry’s long-term plan to work together to change and improve services for customers, the economy, communities and people who work in rail”.
Over the next 18 months, the RDG said, many services in “many parts” of the country will be “transformed” with more trains, better services and improved stations.
This includes Crossrail, Thameslink, Edinburgh-Glasgow, Great Western, Waterloo and the South West, and upgrades in the Midlands and the North, the RDG said.
The announcement did not sit well with commuters who took particular issue with the RDG’s claim that fare money improved services.
Passenger watchdog Transport Focus compared the news to “a chill wind” blowing down platforms as many passengers’ incomes are stagnating or falling.
Chief executive Anthony Smith said: “While substantial, welcome investment in new trains and improved track and signals is continuing, passengers are still seeing the basic promises made by the rail industry broken on too many days.”
One in nine trains (12%) failed to meet the rail industry’s punctuality target in the past 12 months.
That means they arrived at terminating stations more than five minutes late for commuter services or 10 minutes late for long-distance journeys.
Smith’s comments were echoed by Alex Hayman, the Managing Director of Public Markets for Which?
He said: “This price hike will be another blow for passengers, many of whom continue to experience cancellations, delays, overcrowding and poor service from train companies.
“For passengers to genuinely get value for money, they must be able to find the best ticket for their journey, cheaper fares must not be hidden and compensation must be paid where it is owed.”
The Rail, Maritime and Transport (RMT) union described the fares announcement as “another kick in the teeth” for passengers.
General secretary Mick Cash said: “For public sector workers and many others in our communities who have had their pay and benefits capped or frozen by this Government, these fare increases are another twist of the economic knife.
“The private train companies are laughing all the way to the bank.”
Fewer than half (47%) of passengers are satisfied with the value for money of train tickets, according to Transport Focus.
Analysis From Paul Waugh’s Waugh Zone
At 7am, we learned that rail fares will go up an average of 3.4% from January – which is in journo-jargon “inflation-busting” (inflation is 3%) and a real terms rise. The privatised rail companies say that out of every pound spent on fares they take just 3p in profit, ploughing the rest back into investment.
One big issue is the way the Government has loaded the burden onto the customer. Ticket sales continue to make up an increasing proportion of the investment in the railways. In effect, individuals rather than the state are bearing the burden and rail fares are a bit like shifting taxation from income tax to VAT. Of course, millions who use cars and buses may not want to pay through general taxation for rail commuters, but that won’t make the political pain any easier for the Tories.
And in the end the rises are a political decision. Shadow Transport Secretary Andy McDonald has a simple, doorstep-ready answer on this: renationalisation of the railways. Ministers however struggle to come up with anything populist. And as Paul Plummer, chief executive of the Rail Delivery Group, said this morning: “Government controls increases to almost half of fares, including season tickets, with the rest heavily influenced by the payments train companies make to government”.
Paul Plummer, chief executive of the Rail Delivery Group which brings together train companies and Network Rail, said: “Government controls increases to almost half of fares, including season tickets, with the rest heavily influenced by the payments train companies make to government.
“Alongside investment from the public and private sectors, money from fares is underpinning the partnership railway’s long-term plan to change and improve.
“Working together, our plan will secure £85 billion of additional economic benefits while enabling further investment and improved journeys for customers, better connections to boost local communities and a bright future for our employees.”
Rail companies are working together to deliver more than £50billion of improvements, including private sector investment of £11.6billion on 5,700 new train carriages by 2021, the RDG noted in its statement.
The Government uses the previous July’s Retail Prices Index measure of inflation to determine increases in regulated fares, which was 3.6%.
These are around half of all tickets and include season tickets on most commuter routes and some off-peak return tickets on long-distance journeys.
Train operating companies set the prices of other tickets but are bound by competition rules.