Labour would cap train fares to stop hike of up to 5.6%, says Ed Miliband

From the Guardian:

Quote

Ed Miliband spoke about capping train fares and reforming the rail network when he appeared on LBC radio in Hastings. Photograph: Yui Mok/PA^▸ (Public Address)

Labour would bring in a "tough cap" on all rail fares in contrast to David Cameron's failure to stop another hike of up to 5.6% for some commuters from next year, Ed Miliband said on Friday.

The opposition leader said the prime minister has failed hard-pressed commuters by allowing fares to rise by 20% since the coalition took power. Another rise in fares ^ which Miliband said could be 5.6% ^ is due to be announced on 19 August and will take effect in January. Labour has said it would extend the government cap to all fares, which currently only covers regulated fares including most season tickets, some off-peak and anytime day tickets.

Speaking in Hastings, East Sussex, Miliband said: "Commuters here travelling into London could see their fares rise by up to ^265 to almost ^5,000 next year. A Labour government would cap annual fares on every route and drive through the biggest reforms of the railways since privatisation."

He expanded on Labour's plans during a phone-in on radio station LBC 97.3, where he revealed he thought it had been the "right decision" for his brother, David, to move to the US for a major charity job after losing the party leadership contest. Miliband said their relationship has got a "lot better" and they often talk on the phone.

Addressing the issue of rail fares and his plans to transform the ownership of railways, he said: "There are some good services, certain services are OK and some people will be happy with them but we, at the moment, have a system ^ which has the highest fares in Europe and the biggest taxpayer subsidy. Now I think there must be a better way forward than that and that's what we want to do."

Patrick McLoughlin, the transport secretary, said Miliband's comments looked like "yet another unfunded spending promise which shows that Labour has failed to learn the lessons from their great recession". He added: "It would cost ^1.8bn over the lifetime of the next parliament and be paid for by more borrowing and higher taxes."

Ticket prices rising above inflation have been in place for a decade since the last Labour government brought in a formula to increase fares by RPI^▸ plus 1% annually, in a bid to make train passengers bear a greater cost of the railways.

Coalition policy to accelerate rises to RPI plus 3% were twice modified by the chancellor George Osborne ahead of January rises as inflation crept up, but fares rose by over 6% annually in 2011 and 2012.

Labour had scrapped the "flex" ^ which allowed train operators to raise certain fares by a further 5% provided the cumulative average was capped ^ but it was restored under the coalition. Last year the flex was capped at 2%.

Shadow transport secretary Mary Creagh told the Guardian that while Labour had brought in above-inflation fare rises, "I think that was acceptable when services were improving. But when we had the recession that formula meant fares fell as well, and Andrew Adonis abolished the flex. That was the context when we left government. This government let train companies raise some fares in some years up to 9%. There has been a huge increase in season ticket prices and not many people have seen similar pay rises in that time. What we want is for people to have transparency and plan."

Labour says it will also simplify fare structures ^ an aim that was also pursued by the former coalition transport minister Norman Baker, although a fares review in 2013 ran into industry opposition. Creagh floated the idea of advance tickets to travel in a one-hour time bracket rather than on particular trains, as well as the legal right to be sold the cheapest ticket.

Labour has promised a review of franchising which will look to allow public sector companies to challenge private firms to run lines, although it has stopped short of pledging reforms moving towards renationalisation that some in the party and unions wish to see. The East Coast line, currently state operated, will be franchised out to a private firm in the autumn, although one shortlisted bid is from two companies owned by the French state railway SNCF^▸ .