Transport secretary says fares, and staff pay, could be pegged to lower inflation measure

This article is more than 2 years old

This article is more than 2 years old

The transport secretary has opened the way for smaller annual rail fare increases by suggesting they could be pegged to a lower measure of inflation – but only if unions accept the same measure for staff pay.

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Chris Grayling made the suggestion in a letter to unions and the Rail Delivery Group (RDG), the industry body representing train operators and Network Rail. It came a day before the announcement of what was expected to be another round of high annual fare rises.

Since 2008, rail fares have increased at double the rate of wages.

A fresh hike, to be imposed in January, is likely to be confirmed by the July retail prices index (RPI) inflation figure published by the Office of National Statistics on Wednesday. It is expected to be 3.5%. Campaigners have long demanded that fares should be set by the normally lower consumer prices index (CPI) figure.

The RPI figure is used to set the maximum increase in regulated fares – which account for about half of all tickets sold – including commuter season tickets, some off-peak long distance returns and “anytime” tickets in major cities.

In a letter to the RMT, Aslef, Unite and TSSA unions, Grayling said he shared the desire for lower ticket prices, but added: “As you will be aware, one of the industry’s largest costs is pay.”

He said the use of RPI was “difficult to justify”, and asked the RDG to move to theCPI figure in future.

Unions, which planned to stage protests at stations across the country on Wednesday to mark the latest fare increase, blamed privatisation for escalating rail costs.

Mick Cash, the RMT’s general secretary, said: “If Chris Grayling seriously thinks that rail staff are going to pay the price for his rank incompetence and the greed of the private train operating companies then he needs to think again.”

The RMT and others have renewed their calls for rail to return to public ownership after research suggested fares had increased at more than double the rate of wages over the last decade.

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A 3.5% rise would mean fares had risen by 42% since 2008, while average weekly pay had grown by only 18%, according to TUC analysis.

Grayling’s suggestion to unions comes in a year when passengers havd suffered months of cancellations and delays after the May timetable fiasco.

The TUC said the private firms running the trains paid at least £165m in dividends to their shareholders last year, when overall taxpayer subsidy to the rail industry reached £3.5bn.

Steve Chambers, of the Campaign for Better Transport, said: “We’re calling for a rail fares freeze in January and for a move to CPI from 2020. Fare rises are out of step with household budgets and wages.”