Rail fares to be frozen in England next year

For the first time in 30 years, rail fares in England will be frozen next year, according to the government. Season tickets and off-peak returns will be included in the freeze, which will continue until March 2027. In March 2025, the most recent fare rise was 4. 6%. Rail fares have traditionally increased in January, based on the retail price index's rise in July (RPI) + 1% - although this formula has not always been followed. The announcement comes just days before the chancellor sets out the government's financial plans in the Budget, with Rachel Reeves stating that lowering the cost of living would be the primary goal.

However, the chancellor is also expected to raise taxes to help close a multibillion-pound deficit in her spending proposals, but at the same time.

The government has issued a 45% freeze on rail fares in England, Wales, and Scotland, but the freeze only affects travel in England. The announcement also refers to services provided by England-based train operating companies. Season tickets on most commuter routes, some off-peak return tickets on long-distance journeys, and flexible airfares for travel in and around major cities are included in the regulated price list. Train operators are free to set prices for unregulated fares, but train operators typically increase by similar amounts. According to the government, freezing rail fares was supposed to significantly reduce inflation by holding down

a key component of everyday costs. The annual increase has occurred in March rather than January since 2021. According to a government source, it was likely that unregulated fares would continue to rise, but that regulated tarmacfares would be used to guide travelers. Unregulated fares increased by 5. Year-round, 5%, to March 2025, 1. With a total increase in rail fares of 5. 01 percent over controlled fares, fares soared by 1% over controlled ones. 1% in that period. When challenged about whether other ticket prices would increase to compensate for the freeze on tightly controlled fares, Transport Secretary Heidi Alexander maintained that the scheme was

fully funded. Regulated fares have tended to warn the price of unregulated fares, according to Laura Kuenssberg's report on Sunday, and they generally

track against each other. When asked whether the government will have less to spend on upgrading the rail network, Alexander said that investment in the rail system would be covered

because we acknowledge that investing in the country's infrastructure is the right long-term investment. The Rail Delivery Group, a trade body made up of the UK's rail operators, said the freeze would be good news for customers.We want our railways to flourish, and that's why we're committed to working with the government to ensure that forthcoming railway reforms deliver real benefits for customers,

a spokesperson said. Following the privatization of British Rail, the government has regulated certain train fares since 1996. The freeze marks the first time since then that fares have been frozen, though there have been periods where price increases have been below RPI and a decrease in prices following the financial crisis in 2010. According to the government, the change would save commuters on more expensive routes more than £300. The freeze was being introduced to help reduce living expenses and make travel

traveling to work, school, or visiting friends and relatives a bit more accessible. It was part of wider efforts to restore Great British Railways, according to the transport minister. Great British Railways is a public body that is under construction, and it is part of the government's attempts to bring portions of the railway system into public hands.

Enduring years of fragmentation, driving up passenger requirements, and making journeys safer and better value for money,

the government has announced that it will take over the running and administration of the tracks and trains. According to the government, part of the new body's reforms would be to

gradually shift away from annual blanket increases. Under Labour's previous Tory government, passengers would have faced

relentless

fare increases every year. However, shadow transport secretary Richard Holden said:

The Conservatives maintained fares on the right track in government, with below-inflation rises and consistently calling for no further increases to shield hardworking commuters. Olly Glover, a Liberal Democrat transport spokesperson, welcomed the freeze but said it was

too little, too late for millions of commuters who have suffered years of eye-watering price hikes.

We need a long-term strategy to operate a reliable, inexpensive railway, not just a temporary political fix days before a tough Budget.

In the meantime, the government is expected to reveal an additional £1. In the Budget, there are 3 billion dollars for a scheme to encourage the use of electric cars. However, electric vehicle owners could face a new levy in the form of a pay-per-mile levying. After stepping away from raising income tax rates, the chancellor is expected to lay out a number of smaller tax increases in her Budget, a sign that would have been in breach of Labour's election pledge not to raise "the basic, higher, or additional rates of income tax. However, the government has not ruled out extending the freeze on income tax thresholds – the point at which people begin paying taxes or have to pay higher rates. If any wage increase were to pay more, people will be dragged into a higher tax band or be required to pay taxes on their income for the first time, and any wage rise will see them pay more. The two-child benefit cap is also expected to be scrapped, meaning that parents can only get universal credit or tax credits for their first two children. Labour MPs have been pressed to remove the cap, which was introduced under the Conservatives, a move that could cost more than £3 billion.

Months of rumors over which taxes will rise have dominated the pre-Budget period, with multiple potential steps being proposed in the media. The leaks had been costly for the economy and caused stifled work and customers, according to former Bank of England Chief economist Andy Haldane.

It's the single biggest reason [economic] growth has flatlined,

he told the BBC. However, he admitted that pre-Budget leaks had occurred under previous administrations, and that the

budgetary process has been degraded for many years. Alexander said in reaction that the Budget process had occurred

on shifting sands,with a downgrade to productivity forecasts anda very challenging global economic environment. There was always speculation ahead of a Budget, according to the transport secretary, but the chancellor had been open and transparent with the public, but not sure about her priorities.