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An increase of more than 3% is expected to be applied to some fares in the new year, including season tickets. Fare prices are linked to the rate of inflation recorded for July, which will be unveiled on Wednesday.

Rail fares: Grayling urges inflation change to slow rises

The rail industry should change how it calculates fare rises and staff wages to cut costs for passengers, Transport Secretary Chris Grayling has said.

He has asked train operators and unions to use a different inflation measure, the Consumer Prices Index (CPI), to determine rail fare and wage increases.

This is lower than the current tool used, which includes mortgage costs.

But the RMT union said it opposed Mr Grayling's call - made hours before January's rail fare rise is announced.

Fares are expected to go up by 3.5% at the start of the next year.

The exact increase will be announced on Wednesday when official inflation figures - used to set the price increases - for July are published.

Economists are predicting that the Retail Prices Index (RPI) measure of inflation - the number used by the Department for Transport to set rail fare increases - will increase by 3.5%.

This year rail fares rose by 3.6% - the biggest jump for five years.

Mr Grayling said he wanted to see "lower levels of increases for passengers in future".

"This will require a move away from the use of the Retail Prices Index in the way the industry operates to the more commonly used Consumer Prices Index," he wrote in his letter.

He said pay deals should also be based on the same, lower measure.

"I support paying rail staff decent wages for the hard work they do, but I also now believe it is important that pay agreements also use CPI and not RPI in future," he said.

Mr Grayling urged the rail companies' membership body the Rail Delivery Group to help the government move towards using CPI for future pay deals.

He said the move would help the industry to "keep costs down".

The letter was sent to all the rail unions, with a separate letter sent to Paul Plummer, the chief executive of the Rail Delivery Group, asking for his support.

Shadow transport secretary Andy McDonald said Mr Grayling was in charge of how much firms could raise regulated fares by.

"He has the power to enforce this, he's just choosing not to.

"The truth is that our fragmented, privatised railway drives up costs and leaves passengers paying more for less," he said.

Mick Cash, leader of the Rail, Maritime and Transport union, said it would fight any attempt to impose a "pay cap" on its members in a drive to protect private train company profits.

"This is a basket-case government and a lame duck transport secretary continuing its all-out war on staff and passengers alike," he added.

The TUC union earlier calculated that rail fares had risen over twice as fast as wages over the past decade.

Wednesday's fare hike comes after a summer of chaos for many train customers, after a rail timetable overhaul saw scores of cancellations and delays.

If you want to cut costs for passengers let’s start by looking at large projects like the electrification of the GWML. On time and on budget is it?!

Do you understand the difference between CAPEX  and OPEX?

Yes.  Capital and Operational expenditure.

UK inflation rose to 2.5% in July, after holding steady at 2.4% in the previous three months as the cost of transport and computer games increased.

It was the first jump in the Consumer Prices Index (CPI) measure since November and was in line with forecasts.

Meanwhile the Retail Prices Index (RPI) measure of inflation fell to 3.2%.

The Department for Transport uses the RPI figure to set the maximum annual increase for regulated rail fares.

Does the RPI include the cost of transportation?   If so, isn't there an element of the fares going up this year ... because they went up last year?  A system that - to a very limited degree it must be admitted - stokes its own inflation?

Does the RPI include the cost of transportation ?

Don't know without googling RPI and CPI but a major difference in the two is RPI includes mortgage costs whereas CPI does not. This is a legacy of Mrs. Thatcher. When wages were steaming ahead during her tenure of No. 10 state pensions were uplifted by the average of wage inflation and so her administration changed the state pension uplift rate to be based on the RPI which was lower until some bright spark looking for promotion to her cabinet pointed out that the RPI included mortgage costs for which most state pensioners did not of course have and so was born the CPI which subsequently became the trigger point for state pension uplifts and was thus the ridicule of the infamous 50p state pension rise in Gordon Browns first budget. This was subsequently revised to the triple lock of the 2010 coalition government which was the higher of, 2 1/2 %, wage inflation or CPI and ever since wage inflation and CPI have remained below 2 1/2 % much to the chagrin of the present administration who have an ongoing exercise to define a fairer method of uprating the state pension, fairer to whom.

There were a couple of Chris Grayling's statements I didn't understand.

1. He talked of the greed of the unions being responsible for the rises being so high.   Now I thought the rise was based totally on the price rises in the year to last August and nothing to do with the industry's labour cost. Or is he blaming the whole general inflation on the unions?

2. He talked about how busy trains are now, with passenger numbers doubling, so there was a need to put up fares by a bigger percentage to provide for them. But surely with passenger numbers so much higher, the cost is spread across so many more people and the need for a big percentage rise goes away.   Could it, perhaps, be that the headlines fares are going up because so many more railcards are coming in .. rumour has it that the next one will be a tall person's railcard for anyone over 6' 3".

.. rumour has it that the next one will be a tall person's railcard for anyone over 6' 3".

Wouldn't that be ironic, with me becoming eligible for a wrinkly's wrailcard next year...

Perhaps the wallies at the DfT meant to say that 98% of the profits on the railways are reinvested in the industry which is what has been stated in the past I would believe it, not 98% of the farebox.

There were a couple of Chris Grayling's statements I didn't understand.

1. He talked of the greed of the unions being responsible for the rises being so high.   Now I thought the rise was based totally on the price rises in the year to last August and nothing to do with the industry's labour cost. Or is he blaming the whole general inflation on the unions?
...

So you're as tall as Chris Grayling are you?

Contrasting news reports today.  Grayling, as usual, is blaming someone else for the fares rise - the standard Conservative whipping boys, the unions.  However on local radio this morning GWR placed the blame squarely on the government stating that they imposed the fares rise.

Do you not think it's a little ironic how the RMT froth at the mouth re:fare rises yet in the next breath demand above inflation pay rises for its members? 🙂

You could make a case that the RMT's job is to fight for its members; FirstGroup's job is to produce healthy returns for its shareholders; and the Government's job is to improve the lot of the travelling public - and the only one of those achieving its aims right now is the RMT...