ABSTRACT
This chapter reviews the effectiveness of the institutions responsible for the regulation of the rail and road transport industries in Great Britain with regard to investment, service quality, fares, safety and competition. The level and structure of charges for using the railway have been regulated ever since the nineteenth century, when railways enjoyed a near monopoly in many markets. In the London, Cardiff and Edinburgh commuter markets, an extended approach is taken to regulating the price of fares. The considerable sunk costs involved in railway operation contrast with the much more flexible investment decisions faced by those involved in road and air transport. Many of the problems faced by the railways are manifest in the case of the West Coast Main Line. When launching the Transport White paper in July 1998, Mr Prescott stated that the railways have suffered from a lack of strategic planning, fragmentation of services and profits being given priority over passengers.
