Train Fares to Rise by 4% in 2014. The Inquest Begins.

Aug 13, 2013   //   by Keith McDonald   //   Breaking News  //  Comments Off on Train Fares to Rise by 4% in 2014. The Inquest Begins.

Network Rail - Pendolino

Train fares are set to rise by another 4% in the New Year, heaping yet more pressure upon struggling commuters.

  • Rail fares to rise by 4.1% in the New Year.
  • Fares rising at three times the rate of wages.
  • Network Rail agrees new bonus deal with executives worth £11 million.
  • Taxpayer-supported firm still faces £75 million fine for poor performance.

Companies are allowed to set their January fare increases to one percent above the Retail Price Index (RPI) measure of inflation in July, which was revealed today to be 3.1%. It’s better than last year’s ghastly 5.2%, but that’s hardly any consolation.

Putting this into stark perspective: if the 4% increase goes ahead, it will amount to a 40% rise in train fares since 2008, according to the TUC – around three times the increase in wages over this period (which, we’ve learnt this week, have suffered more in real terms since mid-2010 than either Spain or Cyprus).

The Association of Train Operating Companies (ATOC) and the government have both been quick to defend the rises with their usual rhetoric. It’s “unfortunate”, they say, but “necessary” for vital “investment” in the railways.

But both are in complete denial about the degree to which the various pockets of the rail network are leeching from the system to widen the grins on executives’ faces.

Inflation-busting rises year after year have pushed our train fares to the highest in Europe for some of the poorest conditions – all this at a time when wages are hurtling downwards in real terms.

As commuters, we’re entitled to know how these increases are being spent, and to feel aggrieved if the justification for them doesn’t add up. As it happens, that justification doesn’t look good at all.

A report earlier in the summer by the Centre for Research on Socio-Cultural Change revealed that private train operating companies have been farming off almost all of their profits to shareholders, leaving the taxpayer to fund the investment in the railways.

Predictably, ATOC is quick to stress that only 3p in every pound spent on fares goes towards profit. 48 pence from every pound goes to Network Rail, it proudly reassures us, for essential maintenance and upgrades.

Only, that’s far from reassuring either. Network Rail’s performance in recent years has been so poor that it faces a fine of £75 million for failing to reach modest punctuality targets.

Despite this, the taxpayer-funded organisation has just agreed a deal with its top executives to reward them as much as £11 million over the next three years. That’s a scale of incredulity that, quite frankly, beggars belief.

Network Rail - Track Works
Network Rail: agreeing bonuses for executives despite facing massive fines for poor performance.

If the system is so badly in need of investment, taxpayers expect everyone to take a hit. Executives and shareholders are not likely to go hungry overnight, unlike the low-paid worker who has to leave his/her job because they can no longer afford to sacrifice a quarter of their salary on the daily commute.

Only when dividends are suitably squeezed and executives rewarded according to performance like the rest of us (imagine the thought) should the suffering commuter be reasonably expected to suffer another blunt-edged inflation-busting fare increase.

As it is – far from making any attempt to plug the gap, the rail industry seems to delight in widening it.

It’s a real shame that, aside from the six months ahead of an election, people power is so limited. We can’t just boycott the railways; we rely upon them too heavily. And having paid through the nose for season tickets, we’d only spite ourselves by failing to use them.

But it’s a travesty for social justice and British tradition that a once great industry has been allowed to become yet another prized denizen for overpaid and underperforming executives.

Season Ticket Prices: A Taste of Things to Come

To / From LondonOperator2013 Price2014 Price?
BanburyChiltern£5,028£5,234
BasingstokeSouth West Trains£3,952£4,114
CanterburySouthEastern£4,812£5,009
ColchesterGreater Anglia£4,556£4,743
East GrinsteadSouthern£2,360£2,457
LutonFirst Capital Connect£3,720£3,873
Milton KeynesVirgin£4,620£4,809
OxfordFirst Great Western£4,532£4,718
PeterboroughEast Coast£5,800£6,038
Southend CentralC2C£3,136£3,265
Tunbridge WellsSouthEastern£4,132£4,301
Zones 1-6 (London)TFL£2,224£2,315
Other Connections
Birmingham – LeicesterCrossCountry£3,224£3,356
Cardiff – SwanseaArriva Wales£1,560£1,624
Doncaster – HullHull Trains£2,964£3,086
Edinburgh – GlasgowScotrail£3,512£3,656
Leeds – ManchesterFirst TransPennine Express£2,820£2,936
Lincoln – NottinghamEast Midlands Trains£2,092£2,178
Middlesbrough – NewcastleNorthern£2,128£2,215
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