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Most commuter fares set to drop next year

Most commuter fares set to drop next year

News Release issued by the COI News Distribution Service on 18 August 2009

Rail passengers are set to benefit from lower rail fares from January 2010 following today's announcement that the Retail Price Index (RPI) stood at -1.4% in July this year.

On the majority of rail journeys fares are regulated by the Government. Increases to most of those fares are capped at RPI+1% with the changes implemented in January, based on the previous July's RPI figure.

The RPI figure published by the Office for National Statistics today means that next January most regulated fares will have to fall.

The Government has also taken away the flexibility for operators to raise individual regulated fares by up to 5% above the national fare change, protecting passengers from unduly steep rises in regulated fares next year.

Transport Secretary Andrew Adonis said:

“Today’s RPI figure of -1.4% means that the majority of regulated rail fares, including most commuter fares, will fall in January.

“This is good news. For the first time in a generation passengers across the country will see their fares fall. Drops in fares should encourage more people to travel by train, which is good for the economy and the environment.

“In addition I am removing train operators' ability to increase individual fares next year by up to 5% above the national fare change. This means most regulated fares will fall in line with the national fare change, which will be welcomed by passengers."

Notes to Editors

1. Two train operators are currently excepted from the RPI+1% rule:

· Southeastern has a higher cap of RPI +3% for five years from 2007. This is in recognition of historically low fares on Southeastern and to allow for the investment recently made in the Kent services.

· In the Northern franchise, West Yorkshire PTE fares also have a higher cap of RPI +3% from 2007 until the end of the franchise to enable investment in additional trains in and around Leeds.

2. Previously, train operators have been allowed to increase individual regulated fares by as much as 5% above the average cap on regulated fares so long as the average increase across their 'basket' of fares was no more than RPI+1%. Andrew Adonis announced in, February 2009, his intention to remove this flexibility for 2010.

3. The regulation of rail fares in Scotland, Wales and Liverpool and London Overground are matters for the Scottish Parliament, Welsh Assembly Government, MerseyTravel and Transport for London respectively.

4. Since 1997 regulated fares have risen by about 5% in real terms while disposable income has increased by over 20%.

5. The RPI+1% formula does not apply to unregulated fares which are set on a commercial basis by train operators.

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