Cheaper rail fares expected as greater competition means ‘win-win’ for passengers

Rail fares
Rail fares

The price of rail fares on the country’s major lines could fall as the Government looks to increase the number of operators competing for passengers on certain routes.

Mark Harper, the Transport Secretary, has indicated that the Government would look to encourage more private companies to compete on lines through open access contracts.

Open access companies are operators that run services alongside the main franchise operators on rail lines.

Unlike rail franchises, they do not require any government subsidy and can bid for train services from the Office of Road and Rail that compete directly with the main operator.

Speaking at the annual George Bradshaw Address on Tuesday, Mr Harper said: “Open access operators will play an important role in the industry’s future, especially as we grow new markets.”

Delivering the George Bradshaw Address, Mark Harper reveals ideas to create more competition on the railways
Delivering the George Bradshaw Address, Mark Harper reveals ideas to create more competition on the railways

The move has been welcomed by passenger groups, which have predicted that more open access operators could mean falls in rail fares as competition increases.

Norman Baker, of the Campaign for Better Transport, said these operators tend to offer much cheaper rail fares, which would encourage more people to travel by train.

Anthony Smith, from Transport Focus, said the move would be “win-win” for passengers, as the competition would ensure firms are “attracting more customers, keeping prices keen and beating the opposition”.

Currently, there are three open access operators on the UK network, all currently operating on the East Coast Main Line and competing directly with the government-run LNER.

These include Grand Central - which runs services between Yorkshire, the North East and London - and Hull Trains, which runs a service between Hull and London.

In 2021, Lumo became the newest open access operator running services on the East Coast Main Line between London and Edinburgh.

With operators competing for the same passengers, these companies are often characterised by their low prices.

For example, on Lumo, which was set up to discourage people from flying to Scotland, 60 per cent of its pre-booked, one-way fares are under £30, with some under £20.

Grand Central, which is owned by Arriva, offers flexible off-peak singles from York to London for £58 - well below the industry standard off-peak single of £123.20. A peak return fare is £112, compared with the industry standard of £124.20.

Nick Clarke, head of commercial at Arriva, said open access is not only lowering prices for its customers, but also helping to bring down LNER prices and provide a better customer experience.

He pointed to the fact that Grand Central, Hull Trains and LNER have all recorded growing passenger numbers from 2019, saying: “That is testament to the fact that open access provides competition and if we come up with competitive prices, LNER have to respond.”

Open access contracts have also enabled previously underserved communities to secure services direct to London, with LNER previously not providing direct trains from Sunderland, Bradford and Hull.

The drive for more open access operators fits into Mr Harper’s new plan to encourage more private companies onto the railways - with a new body, Great British Railways, to oversee all aspects of the sector. It could also mean more formalised bidding processes for certain parts of the network.

When asked by The Telegraph where the next open access provider could operate, Mr Harper said that he wants the companies themselves to identify the opportunities and bid.

It is understood that the West Coast Main Line could be the obvious target for a wave of open access operators, with none currently operating on the line.

However, Mr Harper admitted that the current model is not conducive to the open access model.

The move has also been welcomed by some politicians.

John Penrose, MP for Weston-super-Mare, said: "Treating rail like a greener version of air travel, where companies offer services that passengers want at a price they can afford, is miles better.

"It's cheaper, less bureaucratic, less vulnerable to strikes and keeps up with the latest travel patterns continuously too.”