Rail fares capped at inflation plus zero – but it’s the higher inflation measure

The government have announced that rail fares for 2015 will be capped at ‘inflation plus nothing’.  But it is still inflation measured by the Retail Price Index rather than the lower and fairer Consumer Price Index.

Devizes MP Claire Perry’s tweet – “Great news that regulated rail fares will be capped at RPI plus nothing for next year” – was answered by a tweeter saying it was not ‘great news’ for people as “RPI is higher than wage growth.”

Last month, after Mrs Perry had been made Trains Minister, she told The Sun she was arguing strenuously for another year of ‘inflation plus zero’ fare rises.

It will be good news for thousands of commuters who since 2010 have seen rises in their fares four times higher than their wage rises.

The government has stolen a Labour promise for the 2015 election, by stopping rail companies raising fares on specific routes. That means all fare rises next year will be capped at 2.5% – except in the north of England where the government is trying to reduce its subsidy to Northern Trains who have introduced evening peak fares landing some commuters with increases of up to 160 per cent.

What the 2015 cap will mean for the promised level of investment in such schemes as the electrification to Newbury (and perhaps beyond), is not yet clear.  There have already been reports that cost overruns on investment projects may mean some future schemes will have to be pared back.