UPDATED 9 March 10.45

THE Competition and Markets Authority has called for greater competition on the railways, with a substantial increase in the number of open access operators. However, such operators could be called upon to help subsidise unprofitable routes and make a greater contribution to network costs.

There has been a mixed reaction. There has been some support, but transport campaigners and the RMT are opposing the proposals, which the union describd as 'ludicrous', while the Rail Delivery Group said a 'joined-up approach' was the priority.

The CMA said its report had 'identified a range of benefits that could arise from allowing other operators to run competing services against the existing franchise operators'. It highlights the East Coast Main Line, where operators like Grand Central and First Hull Trains have been able to run competing services. Although these services represent fewer than 1 per cent of passenger kilometres, the CMA claimed the 'the evidence of resulting benefits has been underlined by examples of competition between passenger rail operators in other European countries and in other transport markets such as the GB rail freight sector, air transport and airports'.

It concluded that an increase in on-rail competition could result in benefits for passengers and taxpayers, including lower fares and growth in passenger numbers,  greater incentives for operators to improve service quality and innovate, greater efficiency by train operators and more effective use of network capacity.

The CMA said increasing the number of open access services or splitting franchises offers the most immediate benefits from increased competition – but that a move towards a system of multiple licensed operators replacing franchises could also be worth consideration in the future.

The report is proposing that competing open access operators should be able to make more of a contribution than at present through track access charges and through a Public Service Obligation levy to contribute to the funding of important but unprofitable services.

CMA chief executive Alex Chisholm said: "We’ve found that there is strong evidence, both here and abroad, of the benefits that the introduction of competition on main line intercity routes can bring. Where competing operators have been given the opportunity, the need to attract passengers who have a choice can mean lower fares, new routes and destinations, more innovations and flexible ticketing. Not only does this offer a better deal for existing travellers but it can increase overall passenger numbers by attracting new customers to the railways."

"In a more competitive environment companies will push to be more efficient and for there to be better use of existing capacity – so there are benefits for both the network and the taxpayer who helps subsidise the railways.

"There are legitimate concerns about the impact that greater competition might have on the income received by government from franchise operators but so far that concern has been tackled in a way that hinders new entrants. We think a better way would be to have a level playing field – where competing operators are able to make more of a contribution to network costs and to funding unprofitable services. In return they would get more freedom to compete for business against the franchise operator."

Paul Plummer, chief executive of the Rail Delivery Group, said: “The rail industry is actively engaged in the debate over how to harness the best aspects of competition to deliver even better services. We will continue to work with governments and the regulator to balance the opportunities for more competition in rail with the wider complexities and practical challenges of running this vital public service.

"It is important that everyone is clear about what the nation wants from the railway and how we can best achieve this. We must take a joined-up and consistent approach to competition, freight, franchising, regulation, capacity, the shape of Network Rail and how we fund much needed investment. Considering these in isolation is unlikely to deliver the best results for customers, freight users or taxpayers."

However, Which? executive director, Richard Lloyd supported the CMA, saying: "Our annual rail survey shows that millions of passengers are not satisfied with the service they are receiving on Britain's railways. But on open access lines, where there is more competition between train companies, satisfaction is significantly higher.

"More must be done to drive up standards for passengers - they shouldn't have to wait until the end of a lengthy franchise for services to be improved. We urge the Government to listen to the CMA and look at what can be done to increase competition on our railways so passengers get a better service."

Meanwhile the Campaign for Better Transport said passengers would benefit more from a 'joined up network'. CBT chief executive Stephen Joseph said: "The Government has committed billions to upgrading the railways to meet record passenger demand. Rather than handing this much needed capacity to open access operators, as the Competition and Markets Authority proposes, communities and the economy would benefit far more if train companies worked with new city regions and combined authorities on joined up networks of public transport designed to support the local economy."

The RMT described the CMA's proposals as 'ludicrous', The union's general secretary Mick Cash said: “The idea that the solution to the profiteering and fragmentation that has wrecked Britain’s railways over the past two decades is more privatisation is frankly ludicrous and just exposes the Competitions and Markets Authority as wholly unfit for purpose.

“Opening up the lucrative routes to some kind of Wild West free-for-all where the bandit capitalists slug it out station by station, track by track would reduce what is left of our rail network to deregulated and dangerous chaos."