Fear that rail fares may rise by 8%

Commuters may see rail fares soar by as much as 8% if the transport department suffers big cuts in the spending review this autumn.

July’s retail price index (RPI) figure is released later this week, and expected to be in the region of 5%. Rail fare increases are normally calculated using July’s inflation figure, plus 1%, which means passengers could face fare hikes of around 6%.

But price increases could be worse than that. The BBC has reported that the government may be thinking of altering the existing fare formula to allow increases of as much 2% or 3% above inflation, if the department of transport suffers large spending cuts in the government spending review this October. No firm decision has yet been announced.

Philip Hammond, transport secretary, said: “This is not a normal year. The scale of the financial crisis that we have inherited means that we will have to make some tough decisions in the spending review which concludes this autumn. I am therefore not yet in a position to determine next year’s fare increase”.

Commenting on this, Ashwin Kumar, rail director for Passenger Focus, said: ‘We hope train companies show restraint and passengers won’t see the double digit fare rises that we saw on some journeys in 2009’.