Fares warning as rail plan unveiled

Birmingham's New Street Station will undergo improvements as part of Network Rail's investment plan

Birmingham's New Street Station will undergo improvements as part of Network Rail's investment plan

First published in National News © by

The spectre of annual above-inflation fare rises until the end of the decade is hanging over £37.5 billion plans unveiled to run and expand the railways.

Network Rail (NR) said its plans assumed the annual RPI inflation plus 1% formula would be in place throughout 2014 to 2019.

There was further discouraging news for passengers when NR announced its trains-on-time target for 2014-19 would not be an improvement on the 2009-14 target of 92.5% which it is failing to meet. Gloom also deepened when NR said it planned to axe nearly 4,000 jobs by 2019, although it hoped that compulsory redundancies could be kept to a minimum.

And NR chief executive Sir David Higgins sounded a further ominous note when he said the rail industry had entered an "era of trade-offs" and had to balance the need to build more infrastructure, run trains on time and cut costs.

To be approved by the Office of Rail Regulation (ORR), the NR plan comes just days after regulated fares, which include season tickets, went up by an average of 4.2% - to a widespread chorus of disapproval.

The NR plan provides for 170,000 extra morning commuter seats at peak times by 2019 including 115,000 - a 20% increase - on services into central London. NR also envisages 225 million more passengers per year travelling by 2019 and 355,000 more trains in service.

Projects include various electrification schemes, such as the Great Western and Midland Main Lines, station improvements at Birmingham New Street and Reading in Berkshire, and reopening 31 miles of railways in Scotland closed under the Beeching cuts 50 years ago.

NR group strategy director Paul Plummer said they were making an assumption that annual fare rises would stay at RPI plus 1%. He said altering the annual fare formula was a matter for government and that if a government wanted to make changes it would need to increase the public subsidy to the railways.

The subsidy is set to fall during the five-year period, from £4.5 billion in 2009 to between £2.6 billion and £2.9 billion in 2019. So receiving less money from the farebox would mean this subsidy rate of decline would slow.

With the Government committed to laying more of the burden of rail costs on farepayers rather than taxpayers, there seems little likelihood of ministers embracing any plan to limit fare rises if that means subsidies for the railways continue at high levels.

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