Rail fares in England will not be increased in 2026, the government has announced, surprising passengers with the first fare freeze in 30 years.
The chancellor, Rachel Reeves, will confirm a freeze on fares in this week’s budget, a move designed to limit inflation, ease the cost of living and support economic growth.
Reeves and the prime minister, Keir Starmer, are hoping that measures such as freezing train fares and a package of support for energy bills will help mitigate the political fallout of several expected tax increases.
Starmer flew back from the G20 summit in Johannesburg on Saturday night to put the finishing touches to the budget announcement, which senior government ministers expect could define his and Rachel Reeves’ political futures.
The prime minister told reporters in South Africa: “I want the budget to focus on growth and stability – the two pillars that are really important.”
Reeves will set out on Wednesday which taxes she has decided to increase as she looks to eliminate an estimated £20bn hole in the government’s finances.
She is expected to raise about £7.5bn by freezing income tax thresholds and several additional billions with a host of smaller revenue-raisers, such as eliminating tax benefits on salary sacrifice pensions and taxing electric vehicles.
With critics of Starmer’s leadership growing more vocal in recent weeks, the prime minister knows he needs a good reaction from markets and consumers if he is to survive until the next election, though he told reporters this weekend he expects to be in office until 2034.
While ministers are braced for a negative reaction from voters to the expected tax rises, the prime minister and chancellor are hoping they will regain some credit for consumer-friendly offerings such as freezing rail fares.
Instead of a feared rise in fares of at least 4.8%, based on July’s RPI inflation rate, the transport secretary, Heidi Alexander, said there would be an absolute freeze on regulated fares next year.
The government said the move would save commuters more than £300 a year on expensive routes.
Fares directly controlled by the government include season tickets, peak returns for commuters and off-peak returns between major cities, which constitute more than a billion passenger journeys annually in England.
Train companies may still increase other fares – such as advance tickets or first-class seats – although all operators will be under state control by the end of 2027, under plans for a nationalised Great British Railways.
Regulated fares in England have gone up by about 64% since 2010, and transport costs are about 12% of household spending.
Reeves said her budget next week would prioritise cutting the cost of living, alongside reducing NHS waiting lists and national debt.
She said: “That’s why we’re choosing to freeze rail fares for the first time in 30 years, which will ease the pressure on household finances and make travelling to work, school or to visit friends and family that bit easier.”
Alexander said: “We all want to see cheaper rail travel, so we’re freezing fares to help millions of passengers save money. This is part of our wider plans to rebuild Great British Railways the public can be proud of and rely on.”
A typical commuter work three days week in an office, travelling using flexi season tickets, would save £315 a year between Milton Keynes to London or £57 annually from Bradford to Leeds. A traditional full-time commuter to the capital from Canterbury could have seen their annual season ticket rise by more than £400, to £8,929.
The announcement was welcomed by public transport advocates, many of whom have long contrasted the fuel duty freeze for motorists since 2010 with the rapid rise in rail fares.
Ben Plowden, chief executive of Campaign for Better Transport, said: “We know that cost is the number one concern for people wanting to travel by train.
“This will enable more people to choose rail, reducing traffic on our roads, benefiting the economy, helping the environment. This is a positive sign that affordability for passengers is being given the high priority it deserves.”
Aslef, the train drivers’ trade union, said it was “the right decision to help grow our railway”.
The outgoing general secretary, Mick Whelan, said: “We are pleased that after 14 years of the Tories pricing people off our railways, this Labour government is helping people to commute to work and travel for pleasure.”
The announcement will come as some relief to passengers, and to those dismayed by Labour’s first decision of fares in government. In last year’s budget, accompanying documents revealed that fares would rise by 1% more than RPI, or 4.6%, in March this year.
The preceding two years had seen even higher rises under the Conservative government, of 5.9% and 4.9% – albeit significantly below RPI as inflation soared.
Decisions on fares within Scotland and Wales are taken by the devolved governments and are yet to be announced.
