British commuters hit with rail fares hike to add to their misery

London Briefing: News sparked angry reactions from rail unions and consumer groups

Members of the National Union of Rail, Maritime and Transport protest outside Kings Cross station on Tuesday. Commuters are facing an increase in rail fares by 3.6 per cent next year. Photograph: Andy Rain/EPA

Members of the National Union of Rail, Maritime and Transport protest outside Kings Cross station on Tuesday. Commuters are facing an increase in rail fares by 3.6 per cent next year. Photograph: Andy Rain/EPA

 

Tuesday did not start well for commuters in the capital. An early morning train collided with an engineering wagon at Waterloo and another passenger train hit the buffers on arrival at King’s Cross.

Later, at the height of the morning rush hour, Holborn underground station was evacuated when a platform filled with smoke after a loud bang was heard, bringing the Central line to a standstill.

Fortunately there were no serious casualties but the incidents caused severe disruption for hundreds of thousands people trying to get to work.

At Waterloo, Britain’s busiest station, rail travellers are already being hit by the knock-on effects of extensive engineering work and have now been warned to avoid the station entirely until Thursday.

Not a good day, then, for millions of commuters to learn that rail fares will rise by 3.6 per cent from next January – their biggest increase in five years.

Although the price hike will not come into effect until 2018, it is traditionally linked to the inflation-rate ruling six months earlier, in July, which was revealed by the Office for National Statistics on Tuesday.

And instead of being benchmarked against the more widely used consumer price index, which is running at 2.6 per cent, the rail fare rise is based on the retail price index, now running a full point higher, at 3.6 per cent.

Two indicators

RPI was dropped by the British government as the headline measure of inflation almost a decade and a half ago, being replaced by CPI. The two indicators use different formulae to calculate the cost of living and base their figures on different baskets of goods.

CPI, which tends to be lower, is the measure favoured by government statisticians – and it is the measure used by the Bank of England’s monetary policy committee, as it strives to keep the cost of living within its 2 per cent government-set target. It’s also the figure used to calculate benefits, including pensions.

So it’s good enough for the ONS, and the treasury – but not for millions of commuters who now face a rise in the cost of their journeys to work that far outstrips the paltry level of earnings growth.

It’s not just commuters, although they will be hardest hit, as the 3.6 per cent increase in regulated rail fares affects around half of all tickets, including season tickets, London commuter routes and some off-peak return tickets.

Unregulated fares are not bound by the inflation-linked rise but rail operators tend to use that figure as a benchmark too.

The news sparked angry protests from the rail unions, which staged demonstrations at stations around the country, and consumer groups, which called for the fares to be frozen.

Frozen

RMT general secretary Mick Cash said passengers were paying more for less while ASLEF’s Mick Whelan said the government “must intervene to make fares simpler, fairer and cheaper in Brexit Britain.” If fares could not be frozen, then at least they should be linked to CPI, rather than RPI, he said.

London mayor Sadiq Khan joined the chorus of protest, saying it “beggars belief that the government is yet again inflicting sky-high rail fare increases on commuters who have suffered another year of strikes, delays and overcrowded services”.

The “cycle of misery” could not continue, he said: “If I can freeze TfL [London underground and bus] fares, there is no reason why the government can’t do the same for national rail and commuter services.”

It won’t provide much comfort to rail users, but there was some good news on the inflation front yesterday. Economists had expected the CPI measure to rise to 2.7 per cent but instead it came in at the same level seen in June, 2.6 per cent.

That has raised hopes in some quarters that the Brexit-inspired spike in the cost of living following the fall in the value of the pound, may just have reached its peak.

Early guide

Raw material costs for producers, which provide an early guide to the path of inflation, eased further in July, to 6.5 per cent, down from 10 per cent in June and almost 20 per cent at the start of the year.

So far this year the peak for inflation, as measured by the CPI, is 2.9 per cent, a four-year high that was reached in May. Further rises are possible in the next few months but there’s a sporting chance that the cost of living will not break through the 3 per cent level, as many economists had feared.

With earnings growth running at just 1.8 per cent, however, that’s not much cause for celebration – particularly if you’re a commuter.

Fiona Walsh is business editor of theguardian.com

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