Regulation and continuing monopoly on Britain's railways

Abstract

One of the key objectives of rail privatization was to dismantle British Rail's (BR's) monopoly and introduce a competitive spirit into the industry. In order to achieve this, BR was fragmented into 92 separate companies. This restructuring is now complete and, at the time of writing, slightly more than two-thirds of these new companies have been divested. Despite this, the government is taking regulatory steps to prevent the competition it wanted to promote and there are signs that a private monopoly has already begun to rise from the ashes of the public one. This paper explores the government's apparently paradoxical regulatory stance and questions the necessity of such a major restructuring exercise within the railway industry.