Rail passengers could face higher fares from 2027 after Labour appeared to leave the door open to Uber-style surge pricing on inter-city services.
Government papers show that ministers are considering “greater pricing flexibility” on longer-distance routes in an effort to increase railway revenues.
The documents say long-distance fares should “move away from” prices determined by traditional peak travel periods. That could make it harder for passengers to find cheaper tickets outside conventional peak times.
The prospect has emerged as the current fare freeze approaches its end in April 2027, when prices could rise more sharply to help address the rail network’s financial shortfall.
The changes would most likely affect people who need to travel at short notice or purchase tickets close to their departure time.
Surge pricing, already used by airlines and ride-hailing services such as Uber, increases the cost of booking on demand or travelling when services are particularly busy.
Critics warn that passengers with little choice but to book late could pay significantly more than they do under the current system.
Government papers say ministers are considering “greater pricing flexibility” for inter-city fares and want to move away from prices linked to traditional peak periods
Shadow Chancellor Andrew Griffith told Our News Outlet that “Labour cannot keep asking commuters and rail users to prop up the cost of re-nationalised rail”
Tory shadow transport spokesman Richard Holden warned that passengers could be “rinsed” when travelling between major cities
Supporters of demand-based pricing argue that fares could be lower when trains have plenty of spare capacity and relatively few bookings for a particular departure.
The proposal nevertheless comes after Labour ministers repeatedly promoted the prospect of cheaper rail travel as the network is gradually brought back into public ownership.
Shadow Chancellor Andrew Griffith told Our News Outlet: “Labour cannot keep asking commuters and rail users to prop up the cost of re-nationalised rail.
“Labour should be easing the pressure on families already struggling with rising costs.
“The Treasury must explain how potentially uncapped fare increases would help with the cost of living.”
Tory shadow transport spokesman Richard Holden said: “Labour have spent a year claiming they are keeping fares down, but are now opening the door to surge pricing that could see passengers rinsed for travelling between major cities.
“Commuters are being expected to fund Labour’s failing experiment in state control.
“Labour promised a simpler fares system, but what they are delivering is simply more expensive tickets.
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“They must rule out surge pricing on inter-city trains and guarantee that passengers will not face eye-watering fares simply because they have to travel when they need to.”
Former transport minister Norman Baker said: “If this is an attempt to extract more money from rail passengers through the back door, it is neither welcome nor sensible.”
The policy papers were submitted to peers as the House of Lords examines the Railways Bill.
Officials initially said the legislation would give the Transport Secretary the “power to set parameters and guardrails for the overall level of fares”. They also said regulation would protect passengers from “large and unnecessary fare increases”.
However, the latest documents point to a possible change in approach. They state: “Longer-distance and more discretionary markets could allow greater pricing flexibility.”
The papers add: “This should support a fares system that is easier to understand, fairer and more responsive to how people travel…and support revenue growth.”
Labour ministers, including Transport Secretary Heidi Alexander, have repeatedly highlighted the prospect of cheaper rail travel as the network is gradually re-nationalised
Trains carrying the GBR livery are beginning to appear across the network, including on the SWR route
Although the government says cheaper advance tickets should remain available, the plans could leave passengers who must buy at short notice facing higher costs.
Train travel patterns have changed since the Covid-19 pandemic, with office workers often splitting their time between home and the workplace or working more flexible hours. As a result, transport officials are exploring new ways to increase ticket revenue.
Labour entered government in 2024 with a pledge to bring all 19 of Britain’s privately operated train companies under public ownership through a new state-run body, Great British Railways (GBR).
Returning the railways to state control was also a major demand from Labour’s trade union supporters.
South Western Railway became the first operator to be re-nationalised last May. CrossCountry is expected to be the final company transferred to public ownership, with the process scheduled for autumn 2027.
Trains carrying the GBR branding are now beginning to operate across the network, including on the SWR route.
The Railways Bill will establish GBR as a quango responsible for running the railway system, including its fare structure, potentially from 2029.
However, Department for Transport officials could introduce changes to fare rules before then, once the current ticket price freeze ends in April.
A Department for Transport spokesman said: “The Bill will give Great British Railways the tools to fix a fares system that is outdated and unnecessarily complicated.
“We are already carrying out [demand-based] trials on some long-distance services to help passengers access cheaper fares, reduce overcrowding and make better use of available capacity.”
