Railways: Fares

Baroness Altmann Excerpts

Tuesday 31st January 2017 Lords Chamber

[Lord Ahmad of Wimbledon]

My noble friend is right to raise this issue. The basis we currently use, as I have been clear, is RPI. It is important to provide certainty to the market not just for people using the services but, as he points out, for rail companies as well. As I have said, once we see the result of the consultation we will look at this.

[Baroness Altmann (Con)]

My Lords, can my noble friend explain why we are using the RPI rather than the CPI, as RPI is no longer an official statistic? Pensioner incomes are tied to the consumer prices index rather than the retail price index, yet hard-pressed consumers are having to pay an RPI increase.

[Lord Ahmad of Wimbledon]

My noble friend speaks from great expertise, particularly on pensions, and she is right to raise the concern expressed by the travelling public. But I say to her that RPI is consistent with the general indexation approach currently used across all aspects of the rail industry, including franchise payments, network grants and franchise financial models. As she will be aware, those are all indexed at RPI. I have already alluded to the study; let us await the outcome and we will then see how we progress on the way forward.