Complaints about rail fares and car park charges - the role of competition law

If you are concerned about the price of your rail fare or car-park charges at your station, please read our plain English guide on Complaints about rail fares and car-park charges – the role of competition law, at the bottom of this page.

If you are familiar with competition law and would like to know more about the background to the guide, please read our paper on Excessive pricing complaints and franchised passenger services, at the bottom of this page.

Questions and answers

This set of questions and answers accompanies the guide on Complaints about rail fares and car-park charges – the role of competition law. It provides a little more detail to answer some questions you might have.

How do I know if my fare is regulated?

We can check this for you. We will look at the journey you are making and the time of day, and check this against the Government’s policy on which fares it regulates.

If you want to read more about this, the Government’s policy is set out in the Strategic Rail Authority’s Fares Review Conclusions 2003 ( PDF 384 Kb). The Strategic Rail Authority has now been abolished but the bodies that took on its responsibilities for fares regulation continue this policy.

Please note that the names of some types of fares have changed since this document was published. Please see the National Rail Enquiries website for more details.

How much can a regulated fare go up by?

Certain standard class rail tickets are regulated by Government:

Transport Scotland (for First ScotRail);
Welsh Assembly Government (for Arriva Trains Wales); and
the Department for Transport (for all other train companies)

(for details of which fare types are regulated, please see the Strategic Rail Authority's Fares Review Conclusions 2003 ( PDF 384 Kb).)

As such, the amount by which an individual regulated fare can rise is capped at the Retail Prices Index (RPI) plus a maximum of 6%, within a basket of fares that cannot rise by more than RPI plus 1%. RPI was 4.8% when the limits were set for this year, so the maximum average increase for the basket is 5.8%, and the maximum increase for an individual fare is 10.8%.

There are three exceptions to this: Southern, Southeastern and Northern Rail (in the West Yorkshire Passenger Transport Executive).

Southern fares are regulated at RPI plus 2%, so the maximum average increase for its basket is 6.8% and the maximum increase for an individual fare 11.8%, while Southeastern and Northern Rail fares are regulated at RPI plus 3%, so the maximum average increase for their baskets is 7.8% and the maximum increase for an individual fare 12.8%.

I cannot walk for 15 minutes to the station, does that mean the car-park charge could be unfair?

We recognise that some people may not have an alternative, but under competition law we need to look at the choices that all of the people who use the train service or station car park could make. Customers as a group may have enough choices to prevent prices from being too high, even if a few people do not. This is because the risk of losing business should stop companies from charging too much.

Would a trend towards higher premiums and lower subsidies mean higher prices and more likelihood that those prices are illegally high?

As we say in our guide, the Government wants the best-value deal for passengers and taxpayers, so it gets companies to compete for contracts (franchises) to provide services. One of the ways that a train company can increase its income is by raising fares and car-park charges. Another way might be by attracting more people to use its services.

Higher fares and car-park charges do not necessarily mean higher profits for the train company though. This is because the train company’s profits will be affected by the amount of premium it pays or subsidy it receives.

Think of a premium as a cost and a subsidy as income. For prices to be too high under competition law, the income a train company earns would have to be much higher than the train company’s costs. If the competition for the franchise has worked well and things go roughly as expected, there will not normally be any prices that are high enough to mean the law has been broken.

Page updated: 27 January 2011