Rail fares are set to spike as government is poised to push ticket prices over inflation rate


Train fares are set to spike above inflation at the start of 2021 with annual ticket costs predicted to soar by £80 on average.

Commuters and frequent travellers have just weeks to buy their season tickets at 2020 prices before a 2.6 per cent rise is imposed, reports suggest. 

It would be the first time in eight years that the rise has exceeded inflation.

The forecasted increase will help cover an extortionate multibillion-pound Government bailout of struggling train firms as the coronavirus crisis saw a reduction in travel as Britons were confined to their homes.

In the first six months of lockdown, £3.5billion of taxpayers money was spent on keeping trains running – despite waning passenger numbers.

Train fares are set to spike above inflation at the start of 2021 with annual ticket costs predicted to soar by £80 on average (file image) 

The Government then promised to underwrite train costs for another year and a half in September.

The deadline within which the Government must confirm 2021’s increase with the rail industry passed in November – and negotiations between the Department for Transport and the Treasury are ongoing.

The railway industry needs two months to action Government fare increases within its operations.

Commuters and frequent travellers have just weeks to buy their season tickets at 2020 prices before a 2.6 per cent rise is imposed, reports suggest (file image)

Commuters and frequent travellers have just weeks to buy their season tickets at 2020 prices before a 2.6 per cent rise is imposed, reports suggest (file image)

This means that the 1 per cent above inflation increase will not come into play on the first working day in January – as is custom – but in early 2021, it is understood. 

A spending review will take place on November 25, during which the ticket cost increase is set to be decided, The Times reports.

This year, the retail prices index – a marker usually used to determine season ticket cost rises – was at 1.6 per cent in July.

As costs are set to rise by 1 per cent above inflation, this implies the total percentage increase will be 2.6 per cent.  

The average cost of a season ticket will be £3,144 after the rise – an £80 increase.

A source said: ‘The Treasury wants a fare rise and they want to kick flexible season tickets into the long grass because they want to start recouping the money they’ve already spent on the railway. 

‘Negotiations are ongoing but it looks like the Treasury is going to win.’

A Department for Transport spokesperson said: ‘While we won’t comment on speculation, we must ensure any changes are fair to taxpayers.’

London Mayor Sadiq Khan claimed victory in securing a £1.8 billion bailout for Transport for London and claims he succeeded in 'killing off the very worst Government proposals'

London Mayor Sadiq Khan claimed victory in securing a £1.8 billion bailout for Transport for London and claims he succeeded in ‘killing off the very worst Government proposals’

Ticket costs on Transport for London services – namely bus and tube fares – are set to be subject to the 2.6 per cent cost spike.

It follows the news earlier this month that TfL has secured a £1.8 billion bailout from the Government to keep it operating over winter as Sadiq Khan claims he succeeded in ‘killing off the very worst Government proposals’. 

The London mayor said the Government had wanted TfL to introduce a series of ‘ill-advised and draconian’ measures in return for the financial package. 

Mr Khan said it is ‘not a perfect deal’ but insisted he ‘fought hard to get to the best possible place’ in rejecting the ‘very worst’ proposals. 

The capital’s transport body said the agreement will enable it to continue operating services until the end of March 2021.

The exact amount of money involved is subject to passenger revenue in the coming months.

TfL’s finances have taken a severe hit from the collapse in fare revenue during the coronavirus pandemic. 

Some of the Government proposals Mr Khan said the Government had wanted TfL to introduce in return for the financial package included extending the Congestion Charge zone to the North and South Circular roads.

The capital's transport body said the agreement will enable it to continue operating services until the end of March 2021

The capital’s transport body said the agreement will enable it to continue operating services until the end of March 2021

They also included scrapping free travel for older and younger Londoners, and raising fares by more than previously agreed. 

‘I am determined that none of this will now happen, Mr Khan said.

‘I am pleased that we have succeeded in killing off the very worst Government proposals.

‘The only reason TfL needs Government support is because almost all our fares income has dried up since March as Londoners have done the right thing.’ 

In a statement, Transport for London said: ‘Discussions on longer-term sustainable funding continue.’

Amendments to the Congestion Charge introduced in June as part of a previous bailout – a 30% increase in the fee and longer operating hours – will remain in place due to the new deal.

TfL's finances have taken a severe hit from the collapse in fare revenue after passenger numbers collapsed and revenue crumbled as a result of the pandemic (Kahn pictured on the tube in 2016)

TfL’s finances have taken a severe hit from the collapse in fare revenue after passenger numbers collapsed and revenue crumbled as a result of the pandemic (Kahn pictured on the tube in 2016)

London Mayor Sadiq Khan said last month that the Government wanted TfL to extend the charging zone to the North and South Circular roads, covering around four million more Londoners.

Other proposed measures described by Mr Khan as ‘ill-advised and draconian’ included above-inflation public transport fare rises.

Last month Boris Johnson claimed TfL was ‘effectively bankrupted’ before coronavirus, and proposals to hike charges were ‘entirely the responsibility’ of Mr Khan.

Responding to the new agreement, Mr Khan said the negotiations have been ‘an appalling and totally unnecessary distraction at a time when every ounce of attention should have been focused on trying to slow the spread of Covid-19 and protecting jobs’.

He went on: ‘The only reason TfL needs Government support is because almost all our fares income has dried up since March as Londoners have done the right thing.’

Grant Shapps, the transport secretary, wrote to Mr Khan with a series of demands in return for any financial rescue package

Grant Shapps, the transport secretary, wrote to Mr Khan with a series of demands in return for any financial rescue package

Transport Secretary Grant Shapps said: ‘This deal is proof of our commitment to supporting London and the transport network on which it depends.

‘Just as we’ve done for the national rail operators, we’ll make up the fare income which TfL is losing due to Covid.

‘Londoners making essential trips will continue to be able to use Tubes, buses, and other TfL services, thanks to this Government funding.

‘At the same time, the agreement is fair to taxpayers across the country. The mayor has pledged that national taxpayers will not pay for benefits for Londoners that they do not get themselves elsewhere in the country.’

He added discussions will continue over the coming months to achieve a ‘long-term settlement’, which will include London being given ‘more control over key taxes so it can pay more costs of the transport network itself’.

City Hall said current passenger revenue projections mean the bailout is worth around £1.8 billion in grants and borrowing.

TfL will carry out cost savings to make up a remaining £160 million ‘gap’ based on its forecasts.

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