Osborne’s climb-down on train fares shows this chancellor is for turning

Alexandra Woodsworth is public transport campaigner at Campaign for Better Transport

Tomorrow, the Chancellor will announce that the Government is scrapping its plans to raise the cap on regulated rail fares.

The Fair Fares Now campaign has been fighting the planned hikes all year, and it’s a real victory for hard-pressed passengers – especially at a time of such economic hardship. It will save passengers millions of pounds, and, for some, will make the difference between being able to afford to get to work and being forced to leave their jobs.

The decision to raise the cap on regulated fares from one per cent above inflation to three per cent above inflation was supposed to be final. It was supposed to be necessary. But this U-turn shows that a vocal passenger campaign can make a big difference.

Clearly, the government didn’t relish facing the wrath of angry commuters, or the potential political backlash that could be dealt by the ‘Thameslink voters’.

That’s the good news.

The bad news is that regulated fares will still rise by an average of six per cent in January (not 6.2 per cent as some media outlets are reporting), and up to 11 per cent on some routes. These extra increases above the average aren’t necessarily tied to any improvements on the line, which leaves affected passengers justifiably bewildered and outraged as to why they should be penalised so much more than others.

So far, it’s unclear how much it will cost the Government to make the change, or how it will be paid for.

Reports range from £26 million in 2012 to £300 million over three years – but no one really knows, since the Government has denied Freedom of Information requests seeking this data. This lack of transparency on rail funding is a scandal in itself given the amount of public money that gets spent on the railways.

Whatever the exact figure, it’s unlikely to affect planned rail investment, which is already committed as part of the current control period for rail spending and decisions taken as part of the spending review. In terms of magnitude, it is also likely to be relatively small compared to other spending on rail and on transport more widely.

For example, the cost of cancelling the planned fuel duty increase, also expected to be announced as part of tomorrow’s statement, is estimated at £1.5 billion. The comparatively small sums involved in keeping the cap on fares where it is also mean that it should be possible to find alternative sources of both revenue and capital funding for rail (see our briefing for more information – pdf).

There is undoubtedly still a great deal of progress to be made to achieve the ‘fair fares’ that the coalition promised when they were elected.

We still have the highest rail fares in Europe, and they are still going up too steeply against inflation, when they should be coming down to help passengers, the environment and the economy. For now, the U-turn only applies to 2012, and the government could revert to its previous plan of inflation plus three per cent increases for 2013 and 2014.

We need to ensure that the government now sets a timeframe for meeting its commitment to put the era of above-inflation fare rises behind us. And we need to tackle some of the mind-boggling oddities in our fare system and make tickets simpler and fairer.

The review of rail fares policy, set to be launched in the new year, provides an opportunity to address all of these issues – and the good news is, we now know that when passengers protest loudly enough, government can be made to listen.

See also:

• Boris fiddles as London prepares for transport chaos – Alex Hern, October 19th 2011

• How the Government could keep train fares down – Richard Hebditch, August 16th 2011

• Train journeys from Hell: What is to be done? – Alexandra Woodsworth, March 23rd 2011

• There are concerns with High Speed Rail but it’s still worth doing – Richard George, March 10th 2011

• Railing against the train fare rises – January 6th 2011, Richard Hebditch