Labour promises to cut rail fares by a third and to offer free travel to young passengers

Economy News

The Labour Party announced plans yesterday to reduce the cost of many train tickets from January 2020. Instead of the 2.8% increase currently scheduled, the price of regulated fares would fall by 33% and would be completely scrapped for those under the age of 16.

The Labour manifesto had promised to bring down train fares but had not specified the extent of the reduction. Yesterday’s announcement included plans for a central online booking system which would attract no booking fees. A simplification of the ticketing system would also see part-time workers pay the same amount per journey as season ticker holders.

The promise represents a shift of funding away from the passenger and onto the taxpayer. At present, around three quarters of running costs are made up of ticket sales, a proportion which has gradually increased since the mid-1990s when the state contribution was around 50%.

The regulated fares which would be covered by the plans represent about 45% of journeys, and include most season tickets, standard returns, and off-peak tickets between major cities. At present their annual increase is capped at inflation.

The promise forms part of Labour’s plans to nationalise the rail network within five years of forming a government. A party spokesperson said that privatisation had “created one of the most expensive ticketing systems in the world” and that the new plans would “tackle the crisis of unaffordability on the railway”.

The lowering of ticket prices would cost $1.5 billion per year and would be funded by the Vehicle Excise Duty. This money had been set aside by the Conservatives for a road-building fund, and it is not yet clear which road projects would be abandoned.

Transport Secretary Grant Shapps labelled the idea “another desperate attempt” to distract from the Labour Party’s “inability and unwillingness to be straight with people on where they stand on Brexit”. The Conservatives have promised to improve the punctuality of trains, to make prices more transparent, and to invest an additional £500 million in the rail network.

The Liberal Democrats have pledged to cancel the 2.8% planned increase in January and to freeze prices for peak times and season tickets for five years.

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