AS Scotland's commuters return to work today forced to pay an additional 3.9% on their train fares, the only consolation is that they would pay even more in other parts of the UK.

The average increase for the UK is 4.2%, the 10th consecutive above-inflation rise in ticket prices.

Rail fares have become a political issue and policy on regulated fares increasingly diverges between London and Edinburgh. The Tory/LibDem Coalition at Westminster took a policy decision that passengers should pay more to ensure investment in the rail network. However, a proposal to increase fares by the Retail Price Index (RPI) plus 3% for three consecutive years to fund infrastructure projects, including high-speed rail, did not survive opposition from passengers and MPs in commuter constituencies angry at the prospect of a 6.2% increase. The formula was hastily reduced to RPI plus 1%.

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This funding policy contrasts with the Scottish Government's strategy of keeping fare increases as low as possible. Off-peak fares on ScotRail will be frozen after 2013 and, as long as the Retail Price Index (RPI) remains below 3.5% a year, the freeze will continue until the end of the franchise in 2015. Peak fare increases will be capped at RPI minus 1% for the next two years. And last month the Scottish Transport Secretary Keith Brown announced that, from 2016, ScotRail's off-peak fares would be pegged at 1% below RPI from 2016.

Passengers will greet this apparent bounty with relief at a time of stagnating wages and higher food and energy bills. However, it raises the fundamental question of how the railways are to be funded at a time of reduced public expenditure. The answer appears to be "later". The Scottish Government has cut £350 million from the flagship Edinburgh Glasgow Improvement Programme and electrification of routes to Stirling and Dunblane has been deferred.

The Association of Train Operating Companies says that 48p in every pound received goes to Network Rail for improving and maintaining the tracks. If income is reduced, there is less to invest, specifically in leasing trains. The fiasco over the tender for a new operator on the West Coast Main Line has revealed extraordinary levels of incompetence at the Department for Transport (DfT). The division between operating companies and the network infrastructure makes a financial strategy for rail in the UK particularly complex. Nevertheless, it appears also to be unnecessarily expensive. DfT officials have signed a contract for combined electric/diesel trains for the East Coast Main Line which costs twice as much as the Pendolinos used by Virgin on the West Coast Main Line. The UK has the highest train fares in Europe, with some UK tickets almost ten times the price of equivalent fares on the Continent. It is not only tighter control on fares that is required but better long-term strategy for sustainable investment. On both sides of the Border.