The cap on regulated fares is calculated according to the formulae in franchise agreements. The current planning assumption, as set out in the 2010 spending review, is that the cap will increase by RPI plus 3% in January 2013 and in January 2014 for operators franchised by the Department for Transport. However, no final decision has been made.
As well as the RPI plus 3% increase proposed by the Government here, the Scottish Government are proposing RPI plus 3% increases in rail fares in Scotland and the potential removal of sleeper services and of cross-border services north of Edinburgh, so my constituents and many people in Scotland face a double whammy. How can we expect people to continue to move on to the railways when we are putting such obstacles in their way?
The hon. Gentleman raises very important issues, and the concerns that he raises are one reason why the Chancellor secured the funding to ensure that the 2012 increase would be just RPI plus 1%. We recognise, however, that it is vital that we get the cost of running the railways down, because that is the long-term, sustainable way to respond to passengers’ concerns about the level of fares.
I, too, welcome the right hon. Lady back to her place.
Last month The Daily Telegraph was briefed that future fare rises are “not set in stone” and are “under constant review.” Will the Minister of State therefore tell the House whether she still intends to allow train companies to hike fares by as much as 8% above inflation in 2013 and in 2014, and has she taken any decisions about fare rises in the years after that?
As I said in my opening answer on this question, the current assumption is based on RPI plus 3%, but we will keep those matters under review, as we did in relation to 2012, to see whether further funding can be secured in order to opt for a different approach. In reality, however, it is crucial that we get the costs of running the railways down—costs that spiralled during the Labour Government. They failed to respond to the problem and were severely criticised by their own Labour-dominated Select Committee at the time for not doing anything serious about rail fares. We are going to get the cost of the railways down so that we get better value for money for passengers.
The Minister seems to be saying one thing to the train companies and another to passengers. I have with me the invitation to tender for the west coast main line, which promises bidders that they can increase fares by up to 8% above inflation next year, by up to 8% above inflation the year after that and, then, by up to 6% above inflation every year for the rest of the entire 15-year franchise. So it seems that the decision has been taken. When is the Minister of State going to stand up to those vested interests and stand up for passengers?
The shadow Secretary of State has resorted to the same old stuff about the fares basket flexibility that the leader of her party got completely wrong at Prime Minister’s questions. It was a fares basket flexibility that Labour suspended for one year and then we introduced, and the Labour Administration in Cardiff are still using that flexibility. It is entirely disingenuous for the shadow Secretary of State to get up and talk about—
Order. We do not use the word “disingenuous” in the Chamber, and I am sure that the Minister of State is happy to withdraw it. We are extremely grateful for her answer.