PM: I’ll freeze rail fares
RAIL fares will be frozen in real terms for five years under a Conservative government, David Cameron will pledge today.
In the most significant announcement of the party’s election manifesto, due to be published next week, the Prime Minister will say the move will save commuters an average of £400 by 2020.
Annual rises in so-called regulated fares will be capped at the rate of inflation for the whole of the next Parliament, meaning costs will be frozen in real terms. These include commuter tickets for major cities, weekly, monthly and annual season tickets, day singles and returns and long-distance off-peak return tickets.
Regulated fares were set aside after privatisation for the Government to oversee, and are those most often used by commuters who have to travel at certain times. Unregulated fares are set by train operating companies at commercial rates, and include firstclass, advance-purchase and long-distance anytime fares. About half of rail fare revenue comes from regulated fares, the other half from unregulated fares.
The pledge is designed to demonstrate that the Tories understand working families are still under pressure on the cost of living, despite the economic recovery and the end of the long wage squeeze. It will also be seen as a counter to Ed Miliband’s commitment to freeze energy bills for 20 months if he wins power next month.
It is an extension of the Coalition’s cap on
‘Fantastic news for millions of people’
regulated fares at the rate of inflation, which has been applied for two consecutive years. Chancellor George Osborne limited fare rises that took effect in January to 2.5 per cent, below the Retail Prices Index (RPI) inflation figure of the previous July, which was 3.5 per cent.
The current rate of inflation is close to zero, meaning fares would be all but frozen in cash terms at the start of the next Parliament if the Tories remain in power. Labour’s ‘flex’ policy, which meant individual fares could rise by as much as an extra 5 per cent on top of inflation, has been abolished.
The Tories say the freeze will particularly benefit more than 250,000 annual season ticket-holders, saving the average commuter around £400 over the five years from 2015 and 2020. London travellers, meanwhile, will benefit from a separate decision by Boris Johnson to freeze all Transport for London fares in real terms until 2016, when he is due to stand down as Mayor.
Mr Cameron will say: ‘The cost of commuting is one of the biggest household bills that hardworking families face and it is something we are determined to bear down on.
‘Because of the difficult decisions that we have taken to repair the economy, we have been able to hold down commuter fares for the past two years. If elected in May, we would freeze them in real terms for the next five. Under Labour, commuters were hit with above-inflation rises year after year. And if they got in again, the chaos they would wreak on the economy would ensure that it happened all over again.
Mr Johnson said: ‘The Prime Minister’s announcement is fantastic news for the millions of people who travel by rail in London each day, unlike the inflation-busting fares rises under the previous Labour Government. Alongside this, I am delighted to announce that I will be freezing TfL fares in real terms whilst I am Mayor.’
Under the last Labour government, rail fares rose faster than the RPI measure of inflation in every year from 2005 to 2009.
The average annual increase across all fares in the last six years of the Labour government was 5.7 per cent. But in 2009, Labour’s last full year in control, fares rose by an eye-watering 11 per cent.
James MacColl, of the Campaign for Better Transport, welcomed the Conservative pledge. but added: ‘We’d like a long-term commitment to actually reducing the burden that rail fares put on people. The formula that’s used – RPI inflation – is not the fairest one, and we’d like it to be switched to CPI (Consumer Prices Index) inflation, which is consistently lower.’