The announcement that regulated rail fares will rise by an average of 4.1 per cent next year was greeted by outrage from passenger groups and trade unions. This will be the 11th year in a row that the increase has exceeded inflation. Recent hikes have been particularly painful for commuters, coming in a period of falling real wages and rapidly rising living costs.
But the Government faces a difficult dilemma. Under the current system, if fares are not raised, the burden on taxpayers increases. Annual subsidies are estimated at £4bn a year, though the real figure is much higher when spending on Crossrail and increases in Network Rail’s debt are factored in. This hefty tax bill damages the economy and discriminates against those who rarely travel by train.
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