The government has turned down a request, for increasing fares, from UK train companies. At the moment, fare increases are linked to a formula that was introduced by the conservatives some time ago, that allows fare increases of 1% above inflation. The train companies are worried that, should deflation occur, they would actually have to cut their fares which could cost them tens of millions of pounds.
The fares structure affects about half of all UK fares, since around half of the fares are regulated. And those train companies that are affected have called for the government to scrap the formula, in order that they can continue to increase fares. The government have decided to reject their pleas, and in light of the current financial climate this will probably come as good news to many hard up commuters.
The governments’ stance has also been welcomed by debt advice organisations. These debt help specialists have seen an increase in the number of consumers that are struggling with basic household bills, in addition to large debts, and higher transport costs would make matters worse. Since the onset of the credit crunch, the number of people seeking specialist IVA advice or entering into debt management plans has been rising.
The governments’ rejection of the fares increase could cause some train companies to suffer as they are reliant on regulated fares and therefore may be forced to reduce them. The consumers interests have to come first, in this instance, especially since we are already paying the highest train fares in Europe, at the moment.