Developments in transport policy - The evolution of policy towards on-railcompetition in Great Britain

This paper examines the development of public policy towards on-rail compet ition in the provision of passenger rail services in the privatised and res tructured railway industry in Great Britain. It shows that policy has sough t to restrict on-rail competition in order to ensure the maximum possible r eduction in public subsidy to passenger rail operations through competition for passenger franchises. Policy has been implemented through a combinatio n of tight regulatory constraints on entry and regulation of price competit ion on routes where two or more franchised train operators compete. Recent developments in policy suggest that industry regulators envisage little sco pe for relaxing these constraints despite evidence of consumer benefits in areas where a degree of onrail competition prevails.