I wonder what the knock on effect will be on LM services as a secondary operator as it were. If the winner hikes fares will LM also hike fares since they can get away with it?
This won't happen, at least on the Crewe to London route (and by extension, the Birmingham to London route, as Crewe to London tickets are valid via Birmingham). On the Crewe to London route, LM can't compete on the Anytime fares seeing as their first arrival into London is at 09:44, this being their only "Peak" morning service (their next arrival at 10:49 being Off-Peak). So even though LM's Peak and First Class fares are unregulated, I doubt they'll increase them drastically, even if the new WCML franchise holder drastically increases their own unregulated fares - to the contrary, in the next fares round, LM are introducing First Class Off-Peak Return fares, valid on all services except the 09:44 arrival. It's £55 from Crewe to London, compared to £105 for an Anytime Return.
LM mainly compete on Off-Peak fares. These are regulated, so the new WCML franchise holder can't drastically increase these. An "Any Permitted" Off-Peak Return from Crewe to London costs £67.40 and an "LM Only" Off-Peak Return costs £33. LM can't increase that fare by much as they will no longer be competitive.
So, in summary, I wouldn't worry about LM drastically increasing their fares.