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Rail fares set to rise above inflation next year for first time since 2013

LaToya Harding
·3-min read
Passengers walk along a platform at King's Cross station in London January 2, 2015. Rail fares rose on Friday by an average of 2.2% in England and Wales. REUTERS/Paul Hackett   (BRITAIN - Tags: TRANSPORT BUSINESS)
Regulated fares were expected to jump by 1.6% at the start of 2021, however, the Department for Transport (DfT) confirmed that the inflation-busting rise will take place in March next year. Photo: REUTERS/Paul Hackett

Rail fares in England are set to increase by 2.6% next year, rising above inflation for the first time in eight years.

Regulated fares were expected to jump by 1.6% at the start of 2021, however, the Department for Transport (DfT) confirmed that the inflation-busting rise will take place in March next year.

This will allow commuters to buy annual season tickets at current prices.

Rail minister Chris Heaton-Harris said: “Delaying the change in rail fares ensures passengers who need to travel have a better deal this year.

“By setting fares sensibly, and with the lowest actual increase for four years, we are ensuring that taxpayers are not overburdened for their unprecedented contribution, ensuring investment is focused on keeping vital services running and protecting frontline jobs.”

In March, the government took over rail franchise agreements from train operators amid a collapse in demand for travel caused by the pandemic. This is expected to have cost about £10bn ($13.5bn) by mid next year.

Annual fare increases are normally set using the retail prices index (RPI) inflation rate from the previous July, which was 1.6%.

Watch: What is inflation and why is it important?

The move comes amid calls to freeze rail prices as passenger numbers dwindle due the outbreak of COVID-19. Unions have said the rise would deter travellers further.

Shadow transport secretary, Jim McMahon, said: “By allowing yet another fare hike, the government will make rail travel unaffordable for many and discourage people from getting back on to the network when restrictions ease.

“The government’s failure means Britain is facing the worst recession of any major economy. This will be yet another kick in the teeth for families struggling to get by.”

Meanwhile, Jacqueline Starr, chief executive of the Rail Delivery Group, said: “Governments must ultimately decide the balance between how much fare-payers and taxpayers pay to run the railway. To keep fares down in the long-term and support a green economic recovery from COVID-19 it is crucial to get people back travelling by train after the pandemic.

READ MORE: UK government to cut £1bn from rail budget

“While passengers will be disappointed at today’s news, we are committed to working with government to make the fares and retailing system easier to use and pushing for better value deals like flexible season tickets.”

Earlier on Wednesday, data published by the Office for National Statistics (ONS) showed consumer price inflation dipped to 0.3% in November.

The data undershot economists’ forecasts of 0.6% and was well down on October’s reading of 0.7%.

The ONS said inflation was weighed down by falling prices for clothing, food and non-alcoholic beverages.

“Throughout 2020, we have seen clothing and footwear prices follow a different pattern compared with previous years,” the stats body said.

“We recorded increased discounting during March and April, probably in response to the lockdown, then prices were relatively stable (compared with previous years) to August. Between August and October, prices broadly increased as usual, but this has been followed by a fall between October and November, whereas prices tend to rise between these two months.”

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