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Commuters would be better off if Government took on board CPI recommendation

22 January 2018

Campaign for Better Transport has today welcomed the Treasury Select Committee recommendation that the Government should start using the Consumer Price Index (CPI), rather than the Retail Price Index (RPI), to set annual rail fare increases.

Stephen Joseph, Chief Executive of Campaign for Better Transport, said: “We strongly support the Treasury Select Committee recommendation to switch to the Consumer Price Index (CPI) for rail fare increases. We have long called for the current Retail Price Index (RPI) formula to be dropped as it is an outdated method for measuring inflation that has left passengers struggling with the cost of their commute. We think the Government should commit to a fares freeze for 2019 and switch to CPI for all future increases to ensure rail travel remains affordable for all.

“The Select Committee’s recommendation underlines last week’s Office of Rail and Road figures which show that fares revenue now more that covers the running costs of the railways and proves passengers are bearing the brunt of paying for the rail network, despite the obvious benefits to the rest of society from reduced congestion, improved air quality and economic connectivity.”

According to the Office of Rail and Road (ORR), fares income has gone up by 18 per cent in the last five years, whilst Government funding for the railways has decreased by 21.1 per cent.

ENDS

 

For further information please contact Alice Ridley on 020 7566 6495 / 07984 773 468 or alice.ridley@bettertransport.org.uk

 

 

Notes to Editors
 

  1. Treasury Select Committee Report states in paragraph 138.’ The RPI is no longer a National Statistic and its deficiencies are numerous. The Government has acknowledged that using the statistically-flawed RPI to uprate the Business Rates multiplier is unfair on businesses. Having acknowledged this, the Government should now discontinue the use of RPI for any indexation purpose where legally possible’. (https://publications.parliament.uk/pa/cm201719/cmselect/cmtreasy/600/600.pdf)
  2. The Office of Rail and Road’s Annual Rail Funding Report was published last week. Read it here: http://orr.gov.uk/news-and-media/press-releases/2018/orr-publishes-annual-rail-funding-report
  3.  
  RPI figure % used for rail fare rises that January CPI figure % at that time
2011 4.8* 3.3
2012 5.0* 4.5
2013 3.2* 2.8
2014 3.1 2.6
2015 2.5 1.5
2016 1.1 0
2017 1.9 0.7
2018 3.6 2.6

 

 

*Fares rose at RPI+1% for these years

RPI and CPI figures: https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/czbh/mm23

  1. Campaign for Better Transport is the UK's leading authority on sustainable transport. We champion transport solutions that improve people's lives and reduce environmental damage. Our campaigns push innovative, practical policies at local and national levels. Campaign for Better Transport Charitable Trust is a registered charity (1101929).