Steve McCabe – 2016 Parliamentary Question to the Department for Transport

The below Parliamentary question was asked by Steve McCabe on 2016-10-07.

To ask the Secretary of State for Transport, pursuant to the Answer of 13 September 2016 to Question 45695, on railways: fares, for what reason his Department uses the Retail Price Index as an index for inflation; and if he will consider using a different index for inflation.

Paul Maynard

The use of the Retail Price Index (RPI) is consistent with the general indexation approach adopted across the rail industry. The Office of Rail and Road uses RPI as the index for Network Rail’s revenues e.g. Track Access Charges. RPI is used widely across Government, including for index linked bonds, vehicle exercise duty, alcohol and tobacco duties, air passenger duty and climate change levies.

It is worth noting that the July 2016 figures for RPI (published on 14 September 2016) and average weekly earnings growth stood at 1.9% and 2.3%, respectively. Each July’s RPI figure is used to set regulated rail fares from January 2nd the following year. On this basis average earnings continue to remain ahead of allowable regulated rail fares increases.