Topical question asked in the House of Commons, by Norman Baker (Liberal Democrat). It was answered on Tuesday, 8 July 2008 on behalf of the Department for Transport.

Topical Questions

Question: Yet again this year, as in every year, the Government are pushing up train fares above the cost of inflation, with their flawed retail prices index-plus policy. At the same time, franchised train companies are having to pay a premium—a kind of stealth railway tax—for their franchises, which might account for the fact that the Government's expenditure on railways is due to fall next year, according to their own figures. When are the Government going to get off the fare escalator, abandon the RPI formula and give fare-paying passengers a fair deal?

Answer: I certainly understand the pressure on people's personal finances. I am determined that we restore passengers' confidence in rail fares, and the hon. Gentleman raises the issue of regulating rail fares. We cap fare increases after inflation to protect passengers from unduly high fare increases. It is worth remembering for a moment that almost half of all rail journeys are made with regulated fares, which are no more expensive in real terms than they were at the time of privatisation, so clearly the regulatory cap is serving a purpose. It is important that we simplify the system and ensure that people are confident that they receive good value for money when they pay a rail fare. The Association of Train Operating Companies has promised to promote price simplification and, ultimately, bring in a price promise, but I think that we may need to go further. That is why I have asked Passenger Focus, the rail passenger representative group, to conduct a study to see what further changes are necessary.

Secondary information