Any speculation that her recent announcement of scrapping peak payment increases was a token commuter relief call in isolation. This is the first time in three decades that national rail fares in England will be frozen in cash terms. This announcement, set to be detailed in the upcoming budget, is expected to save commuters over £300 annually on expensive routes.
The freeze comes amid increasing pressure to address the high cost of living. Reeves said the budget will go toward addressing ways to reduce costs for families. We’re freezing rail fares for the first time in 30 years! This bold decision will take some of the pressure off household finances and make it more affordable to get to work, school or see friends and family.
Reeves has benchedmarked plans to raise up to £7.5 billion of the cash by freezing income tax thresholds. This move is meant to help plug a projected £20 billion gap in UK government finances. This approach is in keeping with the nature of the anticipated increases in taxes across various sectors. Like Reeves, British Prime Minister Keir Starmer understand that they can’t ignore the political fallout from these changes.
Reeves’ budget is more than fare freezes. It seeks to address key political priorities such as cutting NHS waiting lists and cutting the national debt. Starmer remarked, “I want the budget to focus on growth and stability – the two pillars that are really important.”
Among these three announcements, her decision to freeze rail fares is the most welcome and important. Since 2010 regulated fares in England have increased by about 64%. Then last year’s budget snuck in the idea of increasing fares by an additional 1% on top of RPI inflation. This provision makes for an effective increase of about 4.6%. We can breathe easy as commuters are spared the predicted 4.8% increase driven by July’s RPI inflation rate. Instead of fare increases, they can now look forward to a zero percent increase on regulated fares next year.
Heidi Alexander, the new Labour transport secretary, suggested she is confident the fare freeze will have a positive impact. We all want to see better value, cheaper rail travel, so we’re taking action to freeze fares and save millions of passengers money. This is part of our wider plans to rebuild Great British Railways the public can be proud of and rely on,” she commented.
This long-overdue fare freeze addresses both the affordability crisis and equity issues. It leads to an increase in people choosing rail travel over driving or flying. Ben Plowden, transport director at Transport for London, summarises the critical problem. He says that “cost is the top issue for people considering any form of rail travel. This will allow millions more Americans to choose rail over flying or driving, taking pressure off congested highways and bringing economic, environmental, and time-saving benefits. This is a very encouraging sign that affordability for passengers is being prioritized where it’s most important.
Given that transport is already the second biggest household cost after housing, this decision is particularly damaging to families in the North of England. Mick Whelan, general president of SMART, representing the men and women of America’s railway workforce, called the announcement a historic milestone. We’re delighted that after 14 years of Tories making train travel unaffordable, the Labour government is finally showing its teeth. Today, Americans have greater access to jobs and a wider range of vacation destinations.