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Earlier this year the franchise policy was relaxed, so that foreign firms can now take 51% equity stakes in shops that sell just their own brand.
Industry observers speculated on Wednesday that DfT civil servants had fallen foul of implementing a franchise policy that made it impossible to vet far-reaching revenue assumptions with any certainty.
Today's announcement confirmed two new pillars to the government's franchise policy: incumbents should make way for new operators; and the farepayer must shoulder a greater share of railway running costs through higher ticket prices.
I told them, 'I'm paying you a fee to do business, so unless you want to pay us for the customers we are going to lose, it's not appropriate for you to ask us to stop.' They cited us for going against franchise policy.
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However, ministers approved a complex – perhaps unworkable – franchising policy at the same time as overseeing major cuts to the department's resources.
If, as the report indicates, it is the DfT's own franchising policy which is principally responsible for the matters about which it has complained, DfT has the remedy for this in its own hands".
The Rail Regulator blamed the Government's franchising policy yesterday for many of the defects in the market for train rolling stock, as it said it was minded to order a full competition inquiry into the sector.
O'Donnell said the inquiry into the west coast debacle, which is due at the end of the month, must establish whether the fault lay with the government's franchising policy or the implementation of that policy.
But in a week where, because of government franchising policy, train fares were increased yet again above inflation and well above European levels, you can understand a government minister not mentioning this.
The shadow transport secretary, Maria Eagle, said: "For all the effort by the government to pin the blame on civil servants and hide … it was ministers who decided to change franchising policy … and oversaw a bizarre reconstruction of the department leaving no one in charge of rail".
"However, ministers approved a complex - perhaps unworkable - franchising policy at the same time as overseeing major cuts to the department's resources.
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Justyna Jupowicz-Kozak
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