CMA may cap Northern rail fares amid fears of price rises
THE Competition and Markets Authority has warned it may cap fares on some local routes after it revealed the award for Northern rail franchise to Arriva may lead to price increases.
A group of independent panel members at the CMA has investigated whether Arriva’s ownership of certain overlapping rail and bus services may lead to increased fares as a result of reduced competition.
Their provisional finding is that there is a substantial lessening of competition on four rail routes – Leeds to Sheffield, Wakefield to Sheffield, Chester to Manchester and Chester to Stockport -and nine bus routes including three in the Redcar area, two in the Huddersfield area, one in the Darlington area and three in Northumberland.
A notice of possible remedies published outlines the measures the CMA might take if it still believes the franchise award could substantially lessen competition on the routes identified when a final decision is taken. These targeted local remedies include caps on bus and rail fares for the affected routes.
Phil Evans, inquiry chair, said: “We assessed the franchise award thoroughly and have provisionally found that it could lead to higher fares for passengers on some local rail and bus services in the North of England, which would be significant for consumers using these services.
“However, we have not identified competition concerns arising from this merger on most routes and we recognise Arriva’s commitment to bringing a range of benefits through the Northern rail franchise to passengers, such as better trains and improved customer service. Our remedies will protect passengers in the relatively few local areas where we have identified competition concerns.
“We are now inviting responses to our provisional findings and remedies notice, and will continue to assess all the evidence before we make our final decision.”
In December 2015, the Department for Transport awarded the Northern franchise to Arriva Rail North (ARN), a subsidiary of Arriva, following a competitive tender.
ARN began operating the franchise on April 1 2016, under terms agreed with the CMA, with a commitment to delivering significant benefits to passengers over the next nine years.
Arriva operates some rail services which overlap with the Northern franchise, including the Arriva Trains Wales and CrossCountry rail franchises, as well as operating Grand Central trains and also provides local bus services in the North of England, some of which operate in the same areas as the Northern rail franchise.
