Rail season tickets up by 8 per cent

RAIL commuters will face increased annual hikes in fares from 2012, Chancellor George Osborne announced today.

Spending review in full

At present the annual increases in regulated fares, which include season tickets, are capped at 1% above the retail price index (RPI) inflation level.

Today Mr Osborne said that from 2012 the cap will be RPI plus 3% which - if introduced for next January - would have meant season tickets going up almost 8%.

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Mr Osborne said the rise was needed to pay for new trains and improve passenger conditions.

Bob Crow, general secretary of the RMT transport union said: "The massive increase in rail fares will drive people off the trains and onto the roads and it looks like the profits of the private rail companies will be ring fenced while upgrades are kicked into the long grass, forcing passengers to pay through the nose to travel on creaking, overcrowded services."

Mr Osborne said the amount of money for transport projects over the next four years would be greater than for the previous four years.

He confirmed that the 16 billion pounds cross-London Crossrail scheme would go ahead and listed a number of other key projects that would escape the axe.

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These included Manchester to Liverpool rail electrification, widening schemes on the M25, improvements to the M1, M4, M5 and an upgrading of the A11 in East Anglia.

Campaign for Better Transport chief executive Stephen Joseph said: "The Chancellor's statement focuses on large-scale transport projects but the reality is cuts in funding for everyday transport. These projects should not be used as a smokescreen to cover up service cuts and rocketing fares on our buses and trains. Understandably, this will enrage people across the country who rely on these essential services

"We are appalled at the Government's plan to allow rail fares to rise so far above the inflation rate. Hard-working commuters who depend on the train face paying over 1,000 more for their annual season ticket by the time of the next election. These eye-watering rises are unacceptable at a time when we should be growing the railways in order to tackle congestion on our roads and reduce carbon emissions in line with Government targets."

The new RPI plus 3% rail fare formula will be in place for three years. The Department for Transport will reduce resource spending by 21% in real terms over the next four years and capital spending will be reduced by 11% in real terms.

The department's administration budget will be cut by 33%.

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Transport Secretary Philip Hammond said: "This Government inherited a financial crisis because we were spending more money than the country could afford. That has meant that we have had to look again at every pound that we spend to ensure we get value for money.

"Whilst we have had to make some difficult choices, I am confident that our focus on the long term will ensure that we can continue to build a transport system that supports economic growth and reduces carbon. We have secured investment to allow us to go ahead with important projects such as high speed rail, support for ultra-low carbon cars and major road building and public transport programmes.

"We have taken big steps forward in improving efficiency - making genuine savings of over 21% from our resource budget. We have also radically reformed the way decisions are made, ensuring that local people have more control over their priorities."

Among decisions taken today are:

A 20% reduction in bus subsidies paid directly to operators that will save more than 300 million by 2014/15;

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Concessionary fare "bus passes" to remain for older travellers;

Higher charges for cars using the Dartford River Crossing, with the price going up from 1.50 to 2 in 2011 and to 2.50 in 2012;

A reduction of 28% in resource grants to local authorities;

Spending on upgrading the London Underground network will be protected;

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More than 10 billion funding for the national and local road networks, and public transport schemes in Britain's major cities. This will include widening the remaining section of the A11 to provide a continuous dual carriageway link between Norwich and the M11; improving the junction between the M4 and M5 in the West Country; easing congestion on the M1 between junctions 28 and 31;

There will also be route extension and capacity increases on the Midland Metro; investing in the Mersey Gateway Bridge; improving the A23 Handcross to Warninglid in Sussex; upgrading the Tyne and Wear Metro; improving the Tees Valley bus network for passengers; introducing a managed motorway scheme between junctions 25 to 30 of the M62; and improving accessibility to Leeds rail station;.

Crossrail will proceed in its entirety, providing an additional 10% capacity to London's rail network, while Government will continue to seek efficiency savings to maximise value for money;

Better management of contracts across the Highways Agency will save 240 million by 2014-15

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