Norfolk rail users could benefit from a cut of up to 2pc in fares after the government announced yesterday that prices would have to fall in line with inflation.

Norfolk rail users could benefit from a cut of up to 2pc in fares after the government announced yesterday that prices would have to fall in line with inflation.

Annual rises of regulated fares, which make up around 60pc of all train fares, including all those on National Express East Anglia main and local lines and many East Midlands tickets, are linked to the retail price index.

Because the RPI is likely to head into negative territory this year, train companies wanted the Government to scrap the formula, which is based on the figure each July.

But transport minister Lord Adonis said yesterday that the formula will remain in place and that if RPI is significantly negative in July 2009 'it is the Government's intention to allow regulated fares to fall'.

High inflation last summer meant regulated fares rose by an average of 6pc last month. But with RPI possibly being as low as minus 3pc in July, regulated fares could, under the RPI plus 1pc formula, dip by 2pc next January.

Furthermore, the cap will apply to individual regulated ticket prices and not the average of all a single operator's regulated fares.

Bob Crow, general secretary of the Rail Maritime and Transport union, said: 'It is only right that operators that have made obscene sums

of money out of the railways should

not to be allowed to tear up

their contracts simply to maintain dividend payments to shareholders. But by the same token they must be told not to cut jobs and services either.'

Peter Meades, spokesman for National Express East Anglia, which runs services from Norwich to London, Yarmouth and Lowestoft, said the position over possible job cuts and the loss of dining cars

was unaltered. The company would confirm its new fares in autumn.

A spokesman for East Midlands trains said its season tickets and walk-up off peak fares were regulated but not the cheapest advance

tickets.

Passenger Focus chief executive Anthony Smith said: 'Anything that assists people with a major expense such as an annual rail season ticket can only be helpful. We only hope train companies do not put up unregulated fares by significant amounts to compensate for any lost revenue. They could also decide to cut staff, shorten off-peak trains and increase station car park charges.'