Yahoo Finance Rail fares set to be capped between London and Exeter
Rail fares for passengers travelling between London and Exeter will be capped in line with other similar services after an investigation by the UK’s competition watchdog.
The Competition and Markets Authority (CMA) had raised concerns when First Group won the contract to run trains between London Waterloo and Exeter because it also operated the only other service from the Devon city to the capital’s Paddington station, under the Great Western Railway brand.
The Waterloo line, run under the South West Trains monkier, had been operated by Stagecoach for two decades but the company lost the franchise to its UK rival, which put in a joint bid with Hong Kong’s MTR.
The CMA subsequently raised the prospect that with First Group in control of both services, either prices would rise or service standards would fall.
But First Group and MTR offered to cap prices on unregulated fares between the two cities based on a number of other comparable services to ensure they were kept in line with the market. The CMA said today it had accepted this proposal.
Train operating companies have control over setting unregulated fares, which include advance purchase tickets, but regulated fare rises are capped by Government. Data this week showed that RPI in July was 3.6pc, which will be the maximum amount by which regulated fares - such as commuter season tickets - can rise in January.
The train companies will submit regular reports to the CMA to enable it to make sure the agreement is being maintained.
Rachel Merelie, executive director of markets and mergers, said: “We examined the proposals very thoroughly during the consultation period to ensure that they addressed all of our concerns.
“We believe that they will protect passengers from fares being pushed up due to lack of competition on this key route between London and Exeter.”
Exeter MP Ben Bradshaw said last month he shared the CMA’s concerns about the potential for higher ticket prices, adding passengers would want to see a price cap imposed.
