Rail passengers will face huge, inflation-busting increases in train fares as a consequence of the ever-rising costs in diesel and electricity. These increases could be two to three times the rate of inflation, adding more than £100 extra for some season ticket holders.

The government’s ‘RPI plus one’ formula allows rail companies to increase fares by 1% above the retail price index (RPI), which is expected to be 4.5% or more this month. Some companies will be allowed to make even higher increases. Though rail companies make hundreds of millions of pounds in profit, this mechanism allows them to keep increasing fares annually regardless of how severely such increases will hit commuters in times of high inflation.

From January 2009, when the new fares come into effect, some ticket prices will rise by 10% or more, while hundreds of thousands of commuters face average increases of between 6% and 8%. Commuters travelling from Kent and East Sussex by Southeastern will be the worst hit, with rises of around 8%.

But even before the season tickets go up in January, there may be further rises in September, this time on fares which are not regulated by the government. As the government cuts back on its subsidies, rail operators are trying to find ways to raise more cash through the back door, rather than by across-the-board fare rises which would be hugely unpopular. Such stealth measures include cut-backs on the availability of cheap tickets, increases in parking charges, and a host of other restrictions. An example of a recent stealth rise is the move by Arriva (which took over the cross-country franchise from Virgin) to make passengers wait till 9.30 before they can buy the cheapest fares.

Faced with soaring rail fares, worsening travel conditions (such as overcrowding and delays), and stealth measures that further reduce the ease and increase the cost of train travel, long-suffering commuters may find that making their journey by car becomes the preferable option.

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