LIBERAL Party legislator Mrs Miriam Lau Kin-yee said yesterday all public utility companies should keep fare rises below the rate of inflation. Higher fare rises might push inflation back over 10 per cent, she said. But government economist Mr Tang Kwong-yiu responded that public transport fare increases would only bring a one per cent rise in inflation. Speaking at the City Forum, Mrs Lau said fare rises in public transport might trigger similar fare increases in other sectors. She said that so far, only the Kowloon Canton Railway (KCR) and Light Rail Transit (LRT) had promised fare rises would not exceed the inflation rate. She urged all public utility companies to boost efficiency. ''I think under-utilisation should not be a reason for fare increase,'' she said. Mr Tang said the Government's calculation showed all fare rises on public transport this year would only add up to an extra one per cent in inflation. He said the situation had improved, with the majority of fare increase applications asking for rates similar to or less than the current inflation rate. Inflation was not the sole reason for the increase in the operational costs of public transport, he said, adding that public demand for better services also counted. Another economist at the forum, Mr Cheung Yan-leung, shared Mrs Lau's concerns. He said fare increases in public utility companies might set an example for subsequent fare increases in other areas. Although the fare rises contributed only about seven per cent in the calculation of the local inflation rate, their ability to stimulate fare rises in other areas could not be ignored. ''Take the example of the Star Ferry. Although its 23 per cent fare rise means only a few tens of cents, if other sectors follow and make a 23 per cent rise in charges, the public would suffer greatly,'' he said. United Democrat legislator Mr Lau Chin-shek said the Government should review the profit control scheme of various public utility companies. At present, only ferry and tunnel companies need to seek the approval of the Legislative Council for their proposed fare rises. Buses, taxis and minibuses are not required to put their proposals to the council. But they need the recommendation of the Transport Advisory Committee and approval of the Executive Council. KCR and LRT, together with the Mass Transit Railway, enjoy the highest degree of autonomy. They only need to inform the Executive Council of proposed fare rises. Kowloon Motor Bus and China Motor Bus have recently been given approval to increase their fares by 11 and 13 per cent respectively. Mr Lau said that for the past eight years, fare rises by the two companies had exceeded the cumulative inflation rate in the corresponding period by 30 to 40 per cent.