TUC says cost of train travel has increased by twice as much as wages over past decade

Campaigners and unions have warned that ever higher train fares risk driving passengers off the railway, as a fresh increase of about 2.9% is expected to be confirmed on Wednesday and after a decade when fares have risen at double the rate of wages.

The fare rise, to take effect in January but dictated by the July inflation figure that will be published by the Office for National Statistics on Wednesday, will add more than £100 to many annual season tickets.

It will mean that the overall cost of train travel has gone up by 46% since 2009, while wages have only grown by 23%, according to TUC analysis of ONS figures.

Frances O’Grady, the TUC general secretary, said: “The last thing UK commuters need is another hefty fare increase. We’re already paying the highest ticket prices in Europe to travel on overcrowded and understaffed trains.”

The TUC said private train operators paid out £200m in dividends to their shareholders in 2017-18 and received £3.8bn in public subsidy. O’Grady said: “It’s time to take the railways back into public hands. Every single penny from every single fare should be invested into our railways.“

Labour said passengers were “paying more for less” and promised to take the take the railway back into state ownership as franchises expired.

Andy McDonald, the shadow transport secretary, said: “It is indefensible and intolerable that many fares may, once again, rise faster than inflation. Rail travel has got more expensive every year in real terms under the Conservatives. What’s worse is that as rail performance and service quality has declined passengers are paying more for less.”

But the government defended the planned increase. The rail minister, Chris Heaton-Harris, said: “It’s tempting to suggest fares should never rise. However, the truth is that if we stop investing in our railway then we will never see it improved.”

Bruce Williamson, from the campaign group Railfuture, warned: “It might be that we’ve now reached the point where we cannot simply put fares up and expect passengers to take the hit. They will just give up and refuse to pay. They will either find another job or another form of transport.”

The number of journeys made by commuters using season tickets has dropped by 12.5% in three years, from 712m in 2015-16 to 625m this year.

The July RPI figure will dictate the maximum rise to regulated fares, which account for about half of all rail journeys, including season tickets on most commuter routes, off-peak returns on long-distance trains and anytime tickets around major cities.

A 2.9% increase would make a Leeds to Manchester annual season ticket £94 more expensive, at £3,366 and would add more than £120 to a Brighton to London or Edinburgh to Glasgow season ticket, both costing more than £4,200.

The previous transport secretary Chris Grayling had discussed abandoning the RPI measure of inflation and raising fares in line with the more common consumer prices index (CPI). The RPI measure is generally higher than CPI and regarded as less accurate.

The Campaign for Better Transport called for the government to commit to the change. Its chief executive, Darren Shirley, said: “There is still no end in sight to these exorbitant increases that will cost commuters dearly from January.”

The Rail Delivery Group (RDG), which represents private train operators and Network Rail, said 98p in every £1 taken in fares was put back into running the railway. Robert Nisbet, an RDG director, said: “No one wants to pay more to get to work but, by holding rises down to no more than inflation, government is ensuring that money from fares continues to cover almost all of the day-to-day costs of running rail services.”

News of the increase comes after a year in which the structure and functioning of the railways has been called into question. Major commuter routes have largely recovered from the chaos of the 2018 summer timetable change, when there were thousands of cancellations and the railway recorded its worst punctuality performance in 18 years, but other problems have persisted.

The mayors of Greater Manchester and Liverpool city region have demanded that Arriva be stripped of its Northern rail franchise, saying little had improved in a year of misery for passengers since the timetable chaos. The promised withdrawal of notorious rolling stock only saw the first Pacer train retired this week.

Strikes have persisted on routes including South Western and Northern, and a bigger row could loom over rail pensions. The RMT has threatened a national strike without assurances over a near £6bn deficit in the industry’s staff pension fund.

This summer, new problems have developed, with trains struggling to run in the June heatwave and commuters left stranded around the network last week due to power outages.

Sign up to the daily Business Today email or follow Guardian Business on Twitter at @BusinessDesk

The future of the privatised franchise system has been plunged into deeper uncertainty by the cancellation of the Southeastern competition by the new transport secretary, Grant Shapps. A decision on the West Coast intercity service has also been delayed amid boardroom chaos at frontrunner FirstGroup, which is expected to edge out a Chinese bid led by MTR. The contract award, which will include the introduction of HS2 high-speed train services from 2026, may be announced as early as Wednesday morning while the spotlight turns to rail fares. The incumbent Stagecoach-Virgin is suing the government after being barred from bidding for the franchise again.

Campaigners and unions will stage protests against the fare increases on Wednesday at stations around Britain. Ellen Lees from We Own It said: “It’s unacceptable that rail fares are going up yet again after the year we’ve had on the railways.”

Mick Cash, the general secretary of the RMT union, said: “The increase will only serve to make the rail network less affordable and accessible for the travelling public. We need a publicly owned and nationally integrated railway now.”

A rail review commissioned by Grayling and led by the British Airways chief executive Keith Williams is due to publish its findings in the autumn. It could recommend a new arm’s-length body to run the railways, but nationalisation appears to have been ruled out by Williams.

The Department for Transport announced one initiative to ease costs for younger travellers, a new railcard for those aged 16 and 17, costing £30 and giving 50% off fares. The government said it could allow 1.2 million youngsters to save an average of £186 a year.