Freeze rail fares says transport charity as July's Average Earnings Growth rate hits 7.8%

Tuesday, 12 September 2023 07:57

Responding to the publication of July’s Average Earnings Growth rate – the figure which last year was used to set the annual rail fare rise – Norman Baker, from Campaign for Better Transport, said: “The Government has yet to confirm next year’s rail increase, but if it follows the same formula as last year and uses today’s Average Earnings Growth rate, passengers will face eye watering increases. Rather than hammer rail passengers yet again, the Government should...Request free trial

“The Government has yet to confirm next year’s rail increase, but if it follows the same formula as last year and uses today’s Average Earnings Growth rate, passengers will face eye watering increases. Rather than hammer rail passengers yet again, the Government should freeze rail fares – as they have done with fuel duty – until the long-promised ticketing reform takes place.”

Regulated rail fares, including standard day returns, season tickets and most commuter fares, make up almost half (45 per cent) of all fares and increases are set by the Government. Usually fares rise by the previous July’s RPI figure but in 2022, to avoid a double-digit fare rise, the Government used the average earnings growth rate instead and postponed the rise until 5 March (instead of January 2023).

This meant fares rose by 5.9 per cent, rather than 12.3 per cent (July 2022’s RPI figure), but this was still the highest rise in a decade (fares rose at six per cent in 2012).

If the Government uses a similar method to calculate next year’s rail fare rise, it is likely that passengers will still be subjected to a large fare hike (the average earnings growth rate in July was 7.8 per cent, the highest for two decades), and, unless the Government postpones the 2024 rise again, it will be the second such hike within 12 months.

Out of 40 popular commuter routes into London, 27 could see season tickets go above £5,000 next year, and ten pass the £6,000 mark with an annual season ticket from Southampton to London costing over £7,000 (£7,218).

Campaign for Better Transport is calling for a fare freeze for 2024 in recognition of the burden high fares place on rail passengers and to bring rail passengers in line with car drivers who benefitted from a 13^thconsecutive year of frozen fuel duty in this year’s Budget.

ENDS

See examples of season ticket costs into London

See examples of season ticket costs into regional stations

Notes to Editors

In May to July 2023, annual growth in regular pay (excluding bonuses) was 7.8%, the same as the previous three-month period and the highest regular annual growth rate since comparable records began in 2001.

	Annual fare rise %	RPI figure % the previous July	CPI figure % at that time
2011	5.8	4.8*	3.3
2012	6	5.0*	4.5
2013	4.2	3.2*	2.8
2014	3.1	3.1	2.6
2015	2.5	2.5	1.5
2016	1.1	1.1	0
2017	1.9	1.9	0.7
2018	3.6	3.6	2.6
2019	3.2	3.2	2.5
2020	2.8	2.8	2.1
2021	2.6	2.6	1.0
2022	3.8	3.8	2.0
2023	5.9**	12.3	10.1

*Fares rose at RPI+1 for these years **Fares rose at 5.9% after government intervention

RPI and CPI figures: https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/czbh/mm23

The 13-year long fuel duty freeze has meant a real terms tax cut for motorists which has benefitted the top fifth of earners twice as much as the bottom fifth: 12% of the benefits go to the poorest fifth, while 26% go to the richest.
The Williams-Shapps Plan for Rail, published in May 2021, promised a fundamental reorganisation of the rail sector and a ‘root and branch’ reform of the ticketing system’ to provide a better deal for rail passengers. The reform of the ticketing system has yet to take place.