Regulated fares on for UK train services will rise again in the New Year as the government continues to seek a reduction in the subsidy paid by the taxpayer. In a good example of how regulatory agencies can have a direct effect on the cost of living, the price of regulated fares including season tickets will increase by six per cent from the start of 2009.

Regulated fares are based on a set formula which limits increases to 1% above retail price index (RPI) inflation

This BBC article looks at the background to the latest annual rise in the cost of travelling by train. The views of various stakeholders are flagged up – is the government right to squeeze the subsidy on passengers? Will higher fares be used to fund necessary investment in new rolling stock to boost the capacity of the system? Or will they serve only to keep people off rail services who are then prompted to make more use of their cars?

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