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Chris Grayling has been accused of “gross incompetence” after telling rail unions he wants to change how fare rises are determined – but also how employees’ wages are decided.
The transport secretary sparked anger after he said he wanted to move the industry away from basing fare rises and wages on Retail Prices Index (RPI) inflation, using the Consumer Prices Index (CPI) instead.
The cabinet minister wrote to union general secretaries following calls to use the lower CPI instead of RPI when it came to rail fare rises.
Protests around the country are set to go ahead amid frustration over an expected 3.5% increase in train fares as a result of using RPI.
But union bosses hit back and accused Mr Grayling of trying to cap pay rises in the process.
The politician wrote: “I am aware that you have raised concerns about the level of increases in recent years, and I share your desire to see lower levels of increase for passengers in future.
There has been anger over how fare rises are decided
“A key part of achieving this without additional burden on taxpayers will be to ensure that costs in the industry rise no faster than ticket prices.
“This will require a move away from the use of the Retail Prices Index in the way the industry operates to the more commonly used Consumer Prices Index.
“I have already taken steps to ask the Office of Rail and Road to move away from the use of RPI in the contractual and regulatory structures that the industry uses. This will be part of the next regulatory period, which starts next year.
“However as you will be aware, one of the industry’s largest costs is pay. I support paying rail staff decent wages for the hard work they do, but I also now believe it is important that pay agreements also use CPI and not RPI in future when it comes to basing pay deals on inflation.”
Mick Cash, general secretary of the Rail, Maritime and Transport (RMT) union branded Mr Grayling a “lame-duck transport secretary” and hit out at the “basket-case” government, vowing to fight any attempts to impose a pay cap.
“If Chris Grayling seriously thinks that front-line rail workers are going to pay the price for his gross incompetence and the greed of the private train companies he’s got another think coming,” he said.
Labour’s shadow transport secretary, Andy McDonald, called Mr Grayling’s comments a “pathetic attempt” to shift blame for the Conservatives’ fares policies.
He added: “If the Secretary of State recognises that train companies’ profits are responsible for sky-high fares, instead of asking them to make less money, why not go one step further and end privatisation altogether?”
However, the chief executive of the Rail Delivery Group Paul Plummer said 98p of every £1 paid in fares went back into running and improving the railway.
The government is expected to keep using RPI to set fare increases unless pay rises are switched to CPI.
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Train ticket rise called ‘rip-off’
Manuel Cortes, the leader of the Transport Salaried Staffs’ Association, called for Mr Grayling to quit.
“I had to check it wasn’t April Fool’s Day when Grayling suggested our members should work for less so rail companies can keep their fat profits,” he said.
“This is yet another example of the completely ridiculous manner in which this buffoon of a transport secretary is now running Britain’s railways.”
:: What is RPI and CPI?
The Retail Prices Index – announced each month – is a measure of inflation which shows the percentage price rise over the past 12 months and is used when calculating increases in anything from private pensions to student loan rates.
It is calculated by the government, which takes a “shopping basket” of more than 650 goods and services typically used by UK households and comes up with an average figure.
The Consumer Prices Index is similar but does not include any housing costs – the effect of mortgage rates or council tax for example.
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