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Chancellor to reveal cap on rail fare increases

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WestCoast

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Some welcome news for passengers....

Chancellor Osborne to reveal cap on rail fare increases

The chancellor is set to announce a cap on rail fares in Tuesday's autumn statement on the economy.

Fares had been expected to rise by 8.2% - 3% more than the RPI rate of inflation - in the new year.

George Osborne is now expected to announce that this will be restricted to 6.2%, and that the cap will apply to Tube and bus fares in London.

The Association of Train Operating Companies said the decision was a "positive move" for passengers.

Story from BBC NEWS: http://www.bbc.co.uk/news/uk-politics-15907255
 
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Peter Mugridge

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I note ATOC are hailing it as a positive move for passengers. Remind me, what was it they said when the original higher fare rise limits were announced? Something about needing the extra money to make improvements for passengers wasn't it?;)
 

SS4

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It's a positive move, ideally I'd like to see a freeze but that would be living in fantasy land. I wonder why they use July's figure though? Is it a need to push it through Parliament?

Not much to say except I'll believe it when I see it and I'm quite interested to see if they'll be any sly changes to protected tickets and the rise of unprotected ones
 

MikeWh

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I wonder how much this is going to delay NFM11? Might mean more opportunity to buy advance tickets at the old prices if they can't get it live by Dec 5th?
 

radamfi

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I wonder how much this is going to delay NFM11? Might mean more opportunity to buy advance tickets at the old prices if they can't get it live by Dec 5th?

Advance fares are unregulated so in theory shouldn't be affected by this ruling, however if NFM11 is delayed as a result of this very late intervention, I can see revisions to Advance fares being held up at the same time.
--- old post above --- --- new post below ---
I note ATOC are hailing it as a positive move for passengers. Remind me, what was it they said when the original higher fare rise limits were announced? Something about needing the extra money to make improvements for passengers wasn't it?;)

They will now be getting some of this 'extra money' from the Government so it makes no difference to them.
 
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Under the privatisation contracts, all of the extra money from regulated fares increases above RPI + 1 is handed by the TOCs over to the Government. So this move won't impact the DfT budget; however, next year's rise if it stays at RPI + 3 will generate some extra cash for DfT.
 

amcluesent

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We need RPI minus 1% to encourage efficiency on the railways. And controls of the hiking of parking charges to the same figure as regulated fares.
 

Rover

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It's going to cost the taxpayer £300m, whether that's the amount the government will not now be getting or if that's what they have to compensate the TOCs for for lost revenue I'm not sure.
 

bb21

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So only regulated fare rises are capped. Hmm, I wonder what will happen to unregulated fares. Money doesn't just fall out of the sky.
 

furryfeet

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that the cap will apply to Tube and bus fares in London.
So does this mean that everywhere else the RPI + 3% i.e. 8.2% average still applies ?
Also, if it is tube and bus fares only, then rail season tickets within london can go up by 8.2% as well. It this interpretation correct ?
 

LE Greys

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About time off-peak fares were regulated as well. I don't have figures, but I think that SVR/OPR has been going up at about 10% a year for quite some time.
 

Paul Kelly

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On the contrary, off-peak returns (i.e. the equivalent of the former Saver) are regulated everywhere. It is only in the defined commuter zones around London, Cardiff and Edinburgh and in the PTE areas that anytime day returns and singles are regulated. Although seasons are also regulated everywhere, which I suppose comes under peak fares too.

Do you have an example of a particular fare that has been going up by more than regulation - there is probably some explanation for it, but it might be interesting to look into.
 

swt_passenger

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Does anyone else think the BBC headline (and therefore the thread title) is rather odd?

Shouldn't it have been "Chancellor to alter cap on rail fare increases"?

--- old post above --- --- new post below ---

How will that work ? The fares for 2012 have already been announced by TfL.

Confused of North London

What it has meant in previous fares rounds is that individual TfL fares (Tube/DLR/Bus/LO etc) have been subject to the percentage rise set by the Mayor, but all the travelcards have been subject to the DfT's rise, because they are a joint NR/TfL product.

Then you'd normally get the various daily PAYG caps following the travelcards - now that they are equal. (This wasn't always the case though, prior to full PAYG roll out on NR there was generally a slight difference).
 
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Sleepy

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I'd be surprised if the ToCs had not had an idea this might happen and didn't have a contingency plan ready.
Read somewhere ATOC have recently held meeting to discuss this but given NFM 11 should be released next Monday time is very limited !
 

OwlMan

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;) So will TOC pricing managers be burning the midnight oil to change NFM 11 ?

No, as the reduction only applies to regulated fares all they need is to reduce the new fare already calculated by 2% of the old fare. Fairly simple using a computer. Any anomalies that might occur can be sorted out at the next fares change.
Unregulated fares do not need to be adjusted now, but might be adjusted in the next fares round.
 

Mojo

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It's going to cost the taxpayer £300m, whether that's the amount the government will not now be getting or if that's what they have to compensate the TOCs for for lost revenue I'm not sure.
The Tocs' franchise agreements state that for the 2012 fares round they will be limited to RPI + 1%[1]. The extra 2% was therefore going to go straight to the Government.

[1] In previous years Southeastern's was RPI + 3%, however this was already planned to go down to RPI + 1% in 2012
--- old post above --- --- new post below ---
About time off-peak fares were regulated as well. I don't have figures, but I think that SVR/OPR has been going up at about 10% a year for quite some time.
Most SVR fares are regulated.

FWIW I have also heard from a senior fares manager at a popular Toc who has advised his department is very busy with "possible" news of the regulatory change (this message was rec'd by my before today's announcement).
 

TEW

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NFM11 will now not be published until the 19th December instead of the 5th.
 

bb21

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Does this mean the new fares will not go "live" on TIS on 5th December either?
 

yorksrob

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I seem to recall that during the last round of price rises, fares in West Yorks and the South Eastern division were supposed to rise at a higher rate than elsewhere. I wonder if this has been quashed by the fares cap ?
 

swt_passenger

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I seem to recall that during the last round of price rises, fares in West Yorks and the South Eastern division were supposed to rise at a higher rate than elsewhere. I wonder if this has been quashed by the fares cap ?

The SE extra 2% was supposed to have been only for the first 5 years of the new franchise, ie 2006-11, so should no longer happen. Having said that I once read that it was actually delayed until 2007-12, so it might have one year left.

No idea about West Yorks I'm afraid.
 

LE Greys

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Most SVR fares are regulated.

FWIW I have also heard from a senior fares manager at a popular Toc who has advised his department is very busy with "possible" news of the regulatory change (this message was rec'd by my before today's announcement).

My mistake.
 

yorksrob

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The SE extra 2% was supposed to have been only for the first 5 years of the new franchise, ie 2006-11, so should no longer happen. Having said that I once read that it was actually delayed until 2007-12, so it might have one year left.

No idea about West Yorks I'm afraid.

Ah thanks, I wasn't sure how long it had been in place.
 

TEW

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Does this mean the new fares will not go "live" on TIS on 5th December either?

Expect not, delay is because of the need for 'major last minute revisions' so it seems unlikely they will get them on TIS in time.
 
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