Tuesday 16 August 2011

Rail fares race ahead of inflation

I see that rail fares are to up by an average of 8% next year. Inflation is currently 4.4% (RPI), and the chances of any of us getting adecent pay rise something like 0%!

Apparrently rail fares have been rising on a formula based on inflation: It has been RPI + 1%, but for the next three years it will be RPI + 3%.

This begs three questions:
  1. Why do rail fares go up at a higher rate than inflation at all?
  2. Why are they going up at a higher than normal rate over the next three years?
  3. How is 4.4% + 3% equal to 8%?
Here's an answer to question 3: "Some fares will go up by far more than the 8% average, because train companies are allowed to increase fares by another 5% on top, as long as that is balanced with reductions elsewhere." (courtesy of the BBC) I wonder where the "reductions" are to be found - not on any popular routes, I'm sure!

Apparently the answer to quesion 2 is that the government is trying to reduce the taxpayers' burden for the railways; thus, people using the service (fare payers) have to pay more. But will the money go to improvements in rail services?

I could find no answer to question 1.

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