Is there any end in sight at all for rail price rises?

Laura Kuenssberg

Former Business Editor

Network Rail launched a new £37.5 billion plan to run and expand the railways today. Credit: Rui Vieira/PA Wire/Press Association Images

Certainly, Network Rail’s plan to upgrade the railways are ambitious. Certainly, they have a massive price tag of £37.5 billion – more than we spend on the police and court system, four times the cost of the Olympics. And almost certainly, unless the Government radically changes its policy, that cost will fall largely on passengers who have already had to contend with rises well above inflation.

Network Rail does not set prices itself, the Government sets the rules for fares which the train companies have to deal with. But that means the boss of Network Rail, David Higgins, is in the curious position of asking for tens of billions of pounds without having much say over how the money is raised. He told me this afternoon that he understands "why people would be frustrated", but that his own views on fares are "irrelevant".

It feels odd that one of the most influential players in the whole rail industry says he has no view on the most pressing issue for passengers – the actual cost of travel. Privately I’m sure he has. For the record he was keen to point out that as Network Rail boss he does not get any subsidised travel and goes standard class everywhere.

But Network Rail asks for the cash, so indirectly has a massive influence over how much comes out of our pockets, even if technically it is not up to them how the money is raised. So broadly, there are two choices – either passengers pay or taxpayers do. Over recent years the Government has shifted the balance from the taxpayer subsidising rail to the passenger paying a bigger and bigger share.

With a big bump up in the costs, that means a heavier and heavier price for passengers. Although the Government could in theory change their mind and shift the burden back to the taxpayer there is no sign whatsoever of that happening. So those unlucky enough to be commuting at a time when spending on upgrading the railways will surge will carry proportionately more of the cost than travellers in years gone by.

What David Higgins says is that as the numbers of people using the trains keeps rising at a very healthy rate each year passengers and indeed potential passengers must see enough value in travelling that way. Yet surely many commuters in particular don’t feel they have much of a choice. And that is a more painful situation as each year goes by, and each inflation busting increase is added on.