Hurrah! Even as a free market conservative I've long been in favour of this: bidding for the multi-year contract to operate a line is a poor proxy for (impossible) proper competition where rail users could vote with their feet and wallets. There's effectively only one operator anyway, for a given journey, it should be the state, awarding the multi-year contract to the elected government is strictly better than to a p…
How are customers on trains supposed to vote with their wallets? It's not as if you can set up competing parallel networks running trains side by side between identical destinations at varying levels of speed and comfort. Capacity is physically constrained , especially on an ancient network like the UK's. Timetable slots are scarce and have to be centrally coordinated and managed. There is no sparkly market magic tha…
To an extent, this does exist on some routes. Both LNER and Grand Central operate trains up the East Coast Main Line, for example. Then there are destinations served by multiple routes, like Cambridge, Oxford, and Bedford, where each route has its own operator.
Competition is impractical for most journeys, though.