Rail passengers will see the price of regulated rail fares in much of the UK rise by as much as 3.2% in January.

The rise, determined by the RPI inflation measure, could add more than £100 to annual season ticket prices.

Transport Secretary Chris Grayling has called for future rail fare and wage increases to be based on the lower Consumer Prices Index – rather than the higher Retail Prices Index.

The RMT union accused him of trying to impose a “pay cap” on its members.

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The cost of most train fares are set by train companies themselves but 40% of fares in England, Scotland and Wales are regulated so that they are only allowed to rise by an amount pegged to the RPI rate of inflation in July the previous year – currently 3.2%.

These regulated fares include annual season tickets.

The government’s preferred measure of inflation, the Consumer Prices Index (CPI), rose to 2.5% in July from 2.4% in June.

Labour leader Jeremy Corbyn described the increase in regulated fares as “an insult to everyone who has suffered from the chaos on Britain’s railways”.

How would Chris Grayling’s proposal have affected annual season ticket costs in January 2018?

A Brighton to London ticket would have been £39 cheaper (£4,293 instead of £4,332)

Gloucester to Birmingham: £37 cheaper (£4,071 instead of £4,108)

Woking to London: £30 cheaper (£3,218 instead of £3,248)

Liverpool to Manchester: £29 cheaper (£3,123 instead of £3,152)

Maidenhead to London: £26 cheaper (£3,066 instead of £3,092)

Mr Grayling said he wanted to see “lower levels of increases for passengers in future”.

If the lower CPI measure was used to calculate future ticket price increases then, he said, rail firms should also use it to set annual pay rises for staff.

Mr Grayling told the BBC the lower inflation measure was “used by pretty much the whole of the rest of the public sector and much of the rest of our economy”.

He said he was “very disappointed” by the unions’ immediate reaction.

He acknowledged that – due to existing pay deals for rail workers – any changes would “not happen overnight”.

Analysis

By BBC transport correspondent, Tom Burridge

Trust in the railways, and the government’s handle on them, has sunk pretty low after a woeful spring and summer for passengers on Northern and Govia Thameslink.

We travelled in a rickety, crowded carriage from a village outside Wigan into Manchester early this morning and commuters were fuming.

The government points out that the worst affected passengers are being offered compensation, which outstrips the rise in ticket fares which will take affect in January.

However today’s RPI figure, and what it means for ticket prices, will be viewed within the context of recent failings.

It adds ammo to calls from Labour that fares should be frozen on parts of the network which are not performing.

Chris Grayling’s challenge to the rail unions to back a lower benchmark of inflation for both maximum ticket rises on regulated fares and annual wage increases for workers, is an attempt to steal some initiative.

And this row feeds into the broader ideological divide between the Conservatives and Labour vis-a-vis the railways, which could hardly be starker.

Everyone wants cheap rail fares, but there is little agreement on how it should be funded.

In response to the transport secretary’s suggestion, RMT head Mick Cash said: “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 thing coming.”

He accused Mr Grayling of continuing an “all-out war on staff and passengers alike” and said the RMT would fight any attempt to impose a pay cap.

The RMT is organising protests on Wednesday outside stations in London, Birmingham, Cardiff, Leeds and Edinburgh against fare rises.

Mick Whelan, general secretary of train drivers’ union Aslef, argued that cutting staff pay would not reduce passenger fares, but only increase the profits made by railway bosses.

What is the difference between RPI and CPI?

Both RPI and CPI measure the rate at which the price of common items – such as bread, beer and cinema tickets – rise.

But the two measurements use different formulas to calculate the rate of inflation.

RPI, unlike CPI, also includes housing costs such as mortgage interest payments and council tax. It has been higher than CPI for years.

CPI takes into account that when prices rise, some people will switch to products that have gone up by less.

The Office for National Statistics describes RPI as “a very poor measure of general inflation”.

David O’Donnell, 37, from Glasgow, takes the train every day to Paisley. He supports Chris Grayling’s proposal.

“I think railway workers should get a pay rise but it should be more in line with the rest of the UK,” he says.

“But in general I don’t think there should be any rail fare increases. It is a disgrace that rail fares continue to increase at a higher rate than the average worker’s wage.”

Analysis

By BBC Reality Check

How well paid are train drivers at the moment?

If you look at ONS figures for average pay for train and tram drivers in the UK, the median worker (that’s the one for whom half earn more and half earn less) was making £1,031.20 a week, which is £53,622 a year. It’s been going up on average by about 4% a year for the last five years.

That weekly average is more than double the £448.60 a week for all employees in all industries in the UK and indeed the £462.00 a week earned on average by bus and coach drivers.

While other rail firm employees are on lower pay than drivers, they still earn considerably above average.

For example, the median wage for a rail transport operative is £721.70 a week, while rail travel assistants are paid £647.60, and rail and rolling stock builders and repairers take home £902.10.

Research has found the cost of rail travel has increased more than twice as fast as wages since 2008.

The TUC said fares had risen by 42% over the past 10 years, while nominal weekly earnings have only grown by 18%.

But the Rail Delivery Group – which represents railway companies – said passengers’ fares were used wisely.

“For every pound paid in fares, 98p goes back in to running and improving the railway,” said Paul Plummer, chief executive of the RDG.