Image copyright Getty Images

The UK's competition watchdog has accepted a proposal to cap rail fares on certain routes between Preston in Lancashire and Scotland.

The agreement is part of a deal with FirstGroup and Trenitalia, who now run the West Coast Rail franchise.

The Competition and Markets Authority (CMA) had raised concerns that train ticket prices could rise.

It found that on 21 routes, passengers would have little or no option but to choose a service run by FirstGroup.

After the first phase of an investigation into the new contract, the CMA discovered that on 17 routes between Preston and Scotland, passengers could only choose from West Coast Rail, operated by the joint venture between FirstGroup and Trenitalia, or from TransPennine Express, which is operated solely by FirstGroup.

It also pointed out that there were four routes between Oxenholme in the Lake District and Carlisle where travellers could only choose between the joint venture, TransPennine Express, and from one other company.

However, the CMA said it had now accepted proposals from FirstGroup and TrenItalia to address the concerns.

"For both West Coast Rail and TransPennine Express services, these include caps on unregulated fares and maintaining the same availability of cheaper advance tickets for all 21 routes that raise competition issues," the CMA said.

It added that the two operators "must submit regular reports to the CMA to show they are complying".

Franchise upset

FirstGroup and Trenitalia won the contract to run the West Coast Rail franchise following a controversial process that saw Stagecoach banned from bidding for the contract in a row over pensions.

Stagecoach ran the franchise with Virgin Trains, of which it owns 49%, for more than 20 years.

Virgin boss Sir Richard Branson said at the time that he was "devastated" by the disqualification.

The new partnership will operate in two phases. The first will run from 8 December to March 2026, when First Trenitalia will operate the existing InterCity West Coast services.

The second phase will run from March 2026 to March 2031, when it will operate the HS2 high-speed rail service.

Steve Montgomery, managing director of FirstGroup's rail division, told the BBC: "We will make gradual changes through the next couple of years as we keep on enhancing the service for customers."

He said the existing franchise was well run and he was looking forward to taking it over, but added that compensation for late trains would be improved.

Instead of payments applying when a train was at least 30 minutes late, the new benchmark would be 13 minutes, he said.