03-07-2025
Virgin Trains' attempt to get back on to the railways blocked
Virgin Trains' attempt to get back on to the railways has been blocked by the rail regulator.
The Office of Rail and Road (ORR) has turned down all three existing applications to run private company train services out of London Euston along the west coast mainline.
The regulator says there is insufficient capacity on the line and it would affect existing passenger train and freight users.
The ruling comes after pressure from Heidi Alexander, the transport secretary, for the regulator to clamp down on 'open access' train services because they might take income away from the government's renationalised Great British Railway (GBR).
Virgin had planned to run services along the line to Glasgow as well as separate services to Manchester and Liverpool. The other rejected applications were from First Group, which wanted to run a new cut-price Lumo service to Manchester, and the French company Alstom, which had wanted to run a service to north Wales.
Virgin, which ran the west coast mainline franchise for two decades after privatisation, immediately vented its frustration.
'The decision is a blow for consumer choice and competition,' a Virgin Group spokesperson said.
'We believe that given the opportunity, Virgin's open access routes could play a valuable role in delivering the high-quality train services the British public deserve and GBR wants to encourage.
'Anyone who remembers British Rail would rather forget it. Competition improves services, increases rail ridership and drives better results for everyone, including the taxpayer.'
In a statement, the regulator said: 'ORR has concluded there is insufficient capacity on the west coast main line southern section for the introduction of any of the proposed services.
'To introduce any of these proposals would be detrimental to performance on the line and therefore all passengers and freight customers.'
Open access rail services, which popped up during the years of privatisation, are operations run by a private company filling gaps in the timetable or the network and are run outside the ambit of the Department for Transport (DfT) without subsidy and retaining all their own profit.
Earlier this year Alexander had warned the ORR that such open access operations risked taking revenues from GBR and the taxpayer and creating congestion on the network.
The ORR said revenue abstraction was not the issue in its ruling: 'In the case of these three applications, lack of capacity and the anticipated impact on performance alone meant we could not approve them. As such, our duty to have regard to the funds available to the secretary of state was not relevant to this decision.'
FirstGroup has been a leading open access operator, running Lumo, a London-Edinburgh service and Hull Trains. The services at times or on routes ignored by the DfT have proved to be highly profitable. It has already gained licences to provide new open access services between London Paddington and Carmarthen in Wales and London Euston and Stirling in Scotland.
It is the operator of Avanti Trains' intercity services under DfT contract on the west coast mainline.
Of the decision to block a new Lumo service from Euston to Rochdale north of Manchester, First said: 'We are disappointed. Open access services are good for the communities they serve, offering new travel options and reaching under-served stations, and giving great value fares for passengers. These operators bring significant private investment to both the rail sector and UK [train] manufacturing.'
Alstom said it had spent two years preparing the Wrexham, Shropshire & Midlands Railway and had received encouragement and support from the DfT for the open access operation.
'We are extremely disappointed,' a spokesman said. 'We have received overwhelming support from local people, businesses, councillors and MPs, who all recognise the urgent need for this connectivity. We will now urgently seek to re-engage with the ORR and determine our next steps regarding the future of this vital passenger service.'
'A setback for passengers seeking greater choice'
Open access train operations are a legacy of the gaps in the network or the timetable created during the privatised era, when private companies launched new services, taking all the risk without state subsidy, and reaped all the profit if they made it work.
All current open access operations are on the east coast main line into and out of London Kings Cross competing with — or complementing — services run by state-owned LNER: FirstGroup's Hull Trains direct services to Humberside; FirstGroup's Lumo service to and from Edinburgh; and Grand Central, owned by Arriva, serving northern towns and cities.
Tony Lodge, a research fellow of the Centre for Policy Studies and a long-term campaigner for open access, criticised the decision by the Office for Rail and Road (ORR) to block all three extant applications to run services on the west coast main line into and out London Euston.
He said: 'It is a significant setback for passengers seeking greater choice, reduced fares, and expanded route options. Open access competition on the east coast main line has successfully delivered all of these, driving increased passenger numbers and revenue growth. The recent pressure from Whitehall to reject these open access proposals is particularly concerning.'
Heidi Alexander, the transport secretary, had instructed the ORR to think very carefully about revenue abstraction and network congestion before green-lighting any new open access applications.
Notwithstanding the unedifying precedent of ministerial interference in an independent regulator, Alexander will have been influenced by a look at the books of FirstGroup.
As a Department for Transport contractor running the giant regional networks of Avanti, GWR and South West Railway, FirstGroup last year made a profit of £107 million on annual revenues of about £3.5 billion, a profit margin of up to 3 per cent.
In the same period Hull Trains and Lumo made £34 million on annual revenues of just £106 million for a profit margin of 32 per cent, returns unprecedented on Britain's railways.
Open access operations are minuscule compared with the network as a whole. As a battlefield for the argument of private versus public ownership, the issue could become a noisy cuckoo in the nest.
