RPI+3% - Osborne

[O.V.S.Bulleid]

Well - would you believe it?

As we come toward the end of GoVex's ability to fleece commuters the government wants to allow them to continue.

To date GoVex has been hiding behind the DfT by saying that it had signed a contract that specified what it had to do for the rewards of a higher than normal income increase each year.

Will they still give out the same message?

Will Kent continue to be blue at the next election?

Yours sincerely
O.V.S.Bulleid

[NoOnions]

Hi O.V.S.,

How long were/are GoVex allowed to charge +3% rather than +1%? Will we be hit with +5% or just stay where we are now (+3%)?

Either way - even if I get a pay rise in April it will probably all get eaten up by travel cost rises :-(

And to top it all off my Wife's just been let go from her job

Sigh....

NoOnions

[O.V.S.Bulleid]

Well - it isn't known at present. By rights there is a contract existing between the DfT and GoVex but if both parties agree to a change (I would expect Govex to have their arm twisted back enough to make them scream acceptance) then of course it can happen.

The question is whether the extra money will go to GoVex or DfT - again not said by Osborne.

Yours sincerely
O.V.S.Bulleid

[celestine]

Pay rise, NoOnions? what's one of those? This will be the third year in succession I have had no pay rise.
There will come a point when I can no longer afford to commute, and I don't think that day is too far off

[busman]

Oct 20, 2010 18:39:48 GMT celestine said:

Pay rise, NoOnions? what's one of those? This will be the third year in succession I have had no pay rise.
There will come a point when I can no longer afford to commute, and I don't think that day is too far off

Same here no pay rise for 2 years and a 2% this year, If the prices are hiked up by the 30% as stated in the news papers over the next 3 years. I to will have to consider the cost of the trains, may have to have a longer day travailing by coach or part way via car.

[O.V.S.Bulleid]

Compound interest suggests that it will add 7p in the pound more in the third year - assuming all else is zero percent. There is also the issue of RPI being higher in future years because of built in inflation which isn't necessarily going to stay lower than the present government target of 2% - isn't it about 3% at the moment?

My prediction is that commuting will become too expensive (Celestine - nice to bump into you again - is perfectly correct). Will this mean that jobs in the key areas of Westminster, City of London and Southwark will be harder to fill and what will companies in those areas do to avoid having to raise salaries to simply allow people to suffer the present slowest services for 100 years.

It is interesting to look at prices compared to average income in the past and fares are now proportionately higher.

(GoVex will of course simply charge as much as it can for the benefit of its shareholders. You know it might actually be better to have a nationalised railway again as clearly the privatised one doesn't seem more cost effective.)

Yours sincerely
O.V.S.Bulleid

[lordbarne]

O.V.S - RPI is currently 4.6% and has fallen in the last few months from in excess of 5%. It is CPI which is the lower of the two rates and currently stands at 3.1%. Unfortunately both will increase when VAT is increased and as RPI includes housing costs, this will increase with any interest rate rise.

[O.V.S.Bulleid]

Your right of course - it shows that I'm not of your world...

Next year's fares have already been set as a percentage but it will be 2012 that will be interesting as this will include the factors that you note.

I do wonder how long that it will take for the fares hike to become a political issue...

Yours sincerely
O.V.S.Bulleid

[garyw]

Fares in January 2011 will rise around 7%. This was confirmed by Charles Horton at the KCC tonight.