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Labour would “take on” train operating companies
Wednesday, 11 January 2012
The 5.9 per cent rise in average rail fares this month have been defended by the train operating companies after Labour leader Ed Miliband said he would 'take on' train companies and insist that caps on rises were equally applied to all fares, under a future Labour government.

Regulated fares rose by an average of 6%, although operators were allowed to use the 'flex', which had been suspended in 2010 by former transport secretary Lord Adonis. This process means that some fares can be increased by an additional 5%, so long as others are kept low to give the permitted average, across a range of fares for each operator.

This month's increase of regulated fares was going to be based on the formulae of RPI + 3%, but this was reduced to RPI + 1 per cent by the Chancellor in his Autumn Spending Statement, in which he provided £290 million to keep the rises down.

Fares are still set to rise by RPI + 3% in 2013 and 2014, but Mr Miliband promised that a Labour government would change the rules about fares.

He said: "Some are going up by as much as 11 per cent. Next year and the year after, some are going to go up by as much as 13 per cent.

"Some train companies have jacked up prices so much that some season tickets are now a fifth of the average salary in this country. And what are the Government doing about it? Nothing.

"They are afraid to take on the train companies. In fact they are making it worse. Just ask a commuter coming into London from Basildon or Basingstoke. The Government are giving the train companies more freedom to rig the system of fares, so that the busiest routes get the biggest fare increases. That’s got to change."

But the Association of Train Operating Companies responded by pointing out that a 'booming rail industry' was good news. They said "The average rise in season tickets is set by the government under a policy introduced by Labour in 2004 to reduce taxpayer subsidy to the railways. Train companies are subject to rules that were created and rigorously implemented by successive Labour transport secretaries. Within this highly regulated system, operators can vary the price of individual season tickets but it is misleading for Ed Miliband to suggest that they can put all the highest rises on the busiest routes.

"For more than a decade, train companies and the Government have worked together successfully to attract record numbers of passengers to the railways. There is always more that can be done, but a booming rail industry is good news for the economy at a time when the country needs the private sector to boost growth."