Thursday 23 October 2014 4:35 pm

West Coast main line: Has Richard Branson forgotten the virtues of competition?

Tony Lodge is a research fellow at the Centre for Policy Studies (CPS). He is author of the CPS pamphlet Clean Coal – A Clean, Affordable Alternative.

Tony Lodge is a research fellow at the Centre for Policy Studies (CPS). He is author of the CPS pamphlet Clean Coal – A Clean, Affordable Alternative.

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Richard Branson’s famous guerrilla campaign to break British Airways’s grip on Heathrow Airport is safe in history as a victory for competition and passenger choice. The tenacious campaign fought by Virgin to secure access and slots at Heathrow dominated the UK aviation scene for most of the 1990s, and ultimately led to lower fares and better services.

So why is the man who fought tooth and nail to deliver choice and competition in the air now fighting to stop it on the railways?

Virgin Trains has enjoyed a virtual monopoly on the long-distance, high-speed rail services between London Euston and the north west for over 17 years. During this period, the company has made healthy profits and enjoyed massive public investment in the railway to deliver more and faster services.

But this franchised service has never faced any long-distance, high-speed railway competition, and Virgin is doing its best to stop it emerging.

The Office of the Rail Regulator (ORR) is currently considering its ruling on whether new “open access”, privately funded high-speed tilting trains will be permitted to start operating between London and the north west – in direct competition with Virgin.

These new services would bring long overdue fare choice for passengers, providing better services on the neglected routes across the Pennines, which regularly suffer from overcrowding and poor rolling stock.

Since 2007, Yorkshire and the north east has enjoyed such open access competition with the franchise out of London King’s Cross on the East Coast main line. Passengers heading north tonight from King’s Cross can reach Yorkshire and the north east using either the franchised service (East Coast), or the open access trains run by Grand Central and Hull Trains.

These services all compete for passengers. But why has such a competitive model never been encouraged or allowed on the West Coast main line, connecting London with Manchester and beyond?

As part of the consultation to examine this proposed new rail competition, Virgin has sent two letters to the ORR, dated 1 July and 10 July. Initially, it called for the proposal for new services to be withdrawn; next, it outlined Virgin’s opposition, irrespective of the fact that Network Rail has said there is space on the railway to take the new services.

Open access services on other lines have led to lower fares, a greater number of routes, more and happier passengers and better trains. They pose no threat to the viability of the railway. On the East Coast main line, where the franchise directly competes with rivals, fares are lower, stations are busier and overall revenue is higher.

Branson and Virgin dragged BA kicking and screaming into a competitive environment in which it faced competition and eventually rose to the challenge. It’s now time that Virgin – as the incumbent franchise holder – accepted the same challenge, embracing more competition in the interests of the passenger and the railway.

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