NEW YEAR FARES NEWS 2 - The TOCs

Train firms barely make a profit, minister complains as 3% New Year fare hike takes some season tickets to more than £5,000

• Regulated rail fares rise by 3.1%, after ministers axed inflation-busting hike
• But increase is three times higher than average growth in wages
• Latest round of price rises pushes more commuters into £5,000 club
• Rail minister Stephen Hammond denies railways are treated as a 'cash cow'

Train firms barely make a profit, the rail minister insisted today as passengers were hit with New Year fare rises of 3.1 per cent, three times higher than average increases in pay.
Stephen Hammond denied operators were using the railways as a 'cash cow', with companies making 'less than three pence in the pound' as profit.
But despite government efforts to limit annual rises to the rate of inflation, passengers returning to work today complained of high costs and poor service with some annual season tickets now costing more than £5,000.

Hike: Regulated rail fares have risen by 3.1 per cent today, much higher than average pay rises of just 1 per cent

The 3.1 per cent rise taking effect today is for regulated fares which include season tickets. The increase on unregulated fares, typically off-peak leisure tickets, is not capped.
The regulated fare increase pushes some commuters into the £5,000-a-year club, with annual season tickets to London from Deal and Dover Priory costing £5,012.
But despite the cost of a ticket, many commuters struggle to find a seat and are forced to stand, with ministers now considering paying rail firms millions of pounds to remove first class carriages to free up space for standard class passengers.

Despite the latest round of fare hikes, rail minister Mr Hammond insisted profit was 'certainly not the aim'.
'That cannot be the aim if you look at the reality. The idea that there’s a huge amount of cash cow is just a nonsense. The average operator earns less than three pence in the pound,' he told ITV's Daybreak.
'The reality is that this is a Government that for the first time is guaranteeing to spend £16billion over the next five years, Network Rail will be spending £38billion over the next five years, putting in extra seats, extra capacity, upgrading the infrastructure of this company. Much of the fares passengers pay go exactly to that.'
But a new study shows that rail fares are rising so fast that the Government will be making a profit from passengers by 2018.
The report said that by then fares revenue will cover 103 per cent of the operating costs of the railways – up from 80 per cent in 2009.

Research has found rail fares are rising so fast that the Government will be making a profit from passengers by 2018

PUSHED INTO THE £5,000 CLUB: HOW FARES ARE RISING ACROSS THE UK

Average rises in regulated fares like season tickets have been capped at 3.1 per cent, in line with the rate of inflation in July.
But with wages increasing by only 1 per cent a year, the costs increase the squeeze on family finances and mean some annual season tickets now cost more than £5,000.
The impact on annual tickets includes:
Leeds-Wakefield Jan 2013: £964, Jan 2014: £992, increase 2.9%
Basingstoke-London £3,952, £4,076, 3.13%

Ramsgate-London £4,864, £5,012, 3.04%

Folkestone Central-London £4,836, £4,984, 3.06%

Bedford-London £4,172, £4,300, 3.07%

Sevenoaks-London £3,112, £3,208, 3.08%

Cheltenham Spa-London £9,184, £9,468, 3.09%

Deal-London £4,864, £5,012, 3.04%

Woking-London £2,896, £2,980, 2.9%

West Malling-London £3,876, £3,996, 3.1%

Guildford-London £3,224, £3,320, 2.98%

Dover Priory-London £4,864, £5,012, 3.04%

Ludlow-Hereford £1,992, £2,032, 2%

Morpeth-Newcastle £1,008, £1,040, 3.17%

Milton Keynes-London £4,620, £4,772, 3.29%

Tunbridge Wells- London £4,132, £4,260, 3.1%

Aylesbury-London £3,632, £3,732, 2.75%
Hastings-London £4,304, £4,432, 2.97%

The report by Credo commissioned by the Campaign for Better Transport (CBT) also showed that by 2018, the Government's funding of the railways will have fallen to just 20 per cent, down from 38 per cent in 2009.
Under the capped price-rise formula, each January rise is calculated from the Retail Price Index rNate of inflation figure for the previous July, which was 3.1 per cent.
But train companies can also use a 2 per cent flexibility regulation, which lets them put some regulated fares up by 5.1 per cent, provided their overall average does not exceed the 3.1 per cent cap.
In the cold and dark at King's Cross station in London, travellers spoke of their anger at the annual rise and their view that rail travel offered poor value for money.
'It's a lot of money for a poor service,' said teacher Simon Jones, 30, as he waited to board a train to Newcastle upon Tyne with his friend Ben James, 33.
Mr Jones was on a leisure trip today but he and Mr James normally commute to work in London from Wandsworth in south west London.
Mr Jones said: 'Fares are pretty high. My salary has just gone up 1% but fares are rising around 3%. There are delays on practically every day.'
Mr James said: 'We're not really getting value for money. At Clapham Junction (in south London) you can hardly get on a train.'
Labour's shadow transport secretary Mary Creagh said the fare rise was 'a continuation of David Cameron's cost-of-living crisis', while Bob Crow, general secretary of the RMT transport union, said 2014 was 'all set to be another year of racketeering and greed on Britain's privatised railways'.
Sustainable transport organisation Sustrans said: 'Commuters will still feel the pinch this new year because salaries aren't increasing by anywhere near the level of inflation.'
Consumer group Which? said the fare increases 'will be a blow to people already feeling the financial squeeze', while campaign group Railfuture said: 'This latest fare rise comes after 10 years of inflation-busting fare increases, meaning that our trains are easily the most expensive in Europe.'

The report also showed that by 2018, the Government's funding of the railways will have fallen to just 20 per cent

The CBT wants the Government to switch the measure on which they allow inflationary fare rises from 'retail' to the 'consumer' index of inflation, which they say is more in line with incomes.
The CBT report said that between 2008 and 2013 the cost of a weekly season ticket from Reading to London has increased by 25 per cent, while average take-home pay rose by 9 per cent.
CBT chief executive Stephen Joseph said: 'The Government must re-examine its fares policy as a matter of urgency and commit to a fairer system in line with the consumer price index so that fares only rise in line with wages.'
The call comes as rail unions stage a protest today at King's Cross station in London highlighting the high cost of fares which they blame in part on the costs of rail privatisation.

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Michael Portillo is on his television railway travels again, this time back on the British mainland from Monday 6th January. However, an alternative rail replacement bus service can be viewed here