Miliband’s pledge to cap rail fares puts Tories on back foot

[dutchman]

A “tough cap” on rail fares would be imposed by an incoming Labour Government, Ed Miliband has pledged.



The Labour leader pitched for the commuter vote as he warned that fares could rocket by up to 5.6 per cent in January under the Coalition’s formula. The increase will be based on the retail price index (RPI) to be announced on 19 August. It is currently 2.6 per cent.

Labour plans to simplify fare structures, bring in a legal right for passengers to get the cheapest ticket, and would extend the Government cap to all fares. At present, it covers regulated fares – most season tickets, some off-peak and anytime day tickets.

The Department of Transport’s formula for the cap is RPI plus one per cent, but rail firms have the flexibility to vary individual fares by up to a further two per cent as long as the average figure does not breach the cap. Labour would abolish that flexibility, so companies could no longer vary rises on different routes and commuters would know their fares would be capped at the level set by the Government. However, Labour has stopped short of promising to freeze fares or raise them only in line with the RPI.

On a visit to Hastings in Sussex, Mr Miliband warned that local people who commuted to London could see their annual fares bill rise by up to £265 to £4,724 next year.

He said: “David Cameron has failed hard-pressed commuters – who are already struggling due to the cost-of-living crisis – by allowing fares to rise by 20 per cent since he came to power. A Labour government would cap annual fares on every route and drive through the biggest reforms of the railways since privatisation.”

Mr Miliband’s move on fares will put pressure on George Osborne to limit the pre-election rise when he makes his autumn statement. Conservative MPs, many of whom represent commuter belt seats, will press him to repeat his intervention last year, when he knocked one per cent off the scheduled rise by limiting it to the RPI figure.

Mr Miliband told LBC Radio: “We have the highest fares in Europe and the biggest taxpayers’ subsidy [£4bn a year]. There must be a better way forward than that.”