"The trouble with Virgin trains is that there is no competition between London and Manchester and therefore prices are eye-wateringly high in the morning. Someone like RYR could compete on price even when the last bit into central London is (ironically) by train. I would travel to London more often if there was a cheaper alternative than Virgin Trains."
The way that competition on the railways work is that companies bid to run the franchise beforehand. It's not necessarily multiple operators on the same route.
DfT set those fares at that level to deter passengers from travelling at that time given how congested the trains are, they are actively trying to discourage people from travelling at that time.
Come HS2 massive new capacity on the service reduces that requirement to throttle demand through price.