Rail Update — House of Commons, 2018-02-05
Topic: Transportation
Andrew Joseph McDonald (Labour, Centre-left): I would like to thank the Secretary of State for advance sight of his statement, but as I was given it just 15 minutes before he started to speak, I am not sure that I need to be over- grateful. Given the content of his statement, I am not surprised at his reticence. Let us see whether the markets deliver the sort of share value boost that his last statement secured. Today’s announcement is yet another monumental misjudgment to add to a growing list of miscalculations by this Secretary of State. It is increasingly clear that he does not care about taxpayers, rail passengers or the rail industry itself, but will do everything in his power to protect and support Virgin, Stagecoach and their ilk, and the failed franchise system Members on both sides of the House can be in no doubt: the bail-out culture at the Department for Transport is alive and well—it has never been better. Virgin-Stagecoach failed to deliver on its contract on the east coast route. No problem—the Government will step in and bail it out, kissing goodbye to the £2 billion that Virgin had previously agreed to pay. But, guess what? Let us just give both companies a new contract to run the west coast line as well Listening to the Secretary of State’s statement, I did not know whether to laugh or cry. His argument that a direct award to Virgin-Stagecoach for the west coast and east coast represents a good deal is truly laughable. The idea of more profits and less risk for those companies is an insult to Members and their constituents. What makes me want to weep is that he is giving yet more gifts to Richard Branson and Brian Souter. What is more, he is using our public money to fund his failure. Let us not forget that Virgin and Stagecoach are companies that extracted hundreds of millions of pounds in rigged compensation payments from taxpayers during the upgrade of the west coast main line between 2002 and 2006—£590 million to be precise. [Interruption.] Similar tactics are now being deployed on the east coast, as the companies blame Network Rail for their failure to deliver on their contract Virgin Group games the system in rail and Virgin games the system in health. It has done it before, and it is doing it again: Virgin Trains is a company that shakes the system down. The Secretary of State’s failure to stand up to Virgin and Stagecoach is a disgrace. He is supposed to protect the taxpayer interest, not to sacrifice it to Branson and Souter, yet he stands by this model. Companies are not bidding for franchises, which makes a mockery of competition, and his taxpayer bail-outs make a joke of train operating companies paying premiums to the Treasury. What does this Secretary of State do instead? He just gives train operating contracts without competition. Since 2012, there have been more contracts directly awarded than franchises let after competitions. Why? Because he is ideologically opposed to running the railways in the public sector. He just will not do it. He cannot do it, even when the clear majority of the public are in favour of bringing the railways into public ownership. His solution is more taxpayer support and ever higher fares for passengers The Secretary of State refused to answer my questions about these contracts in a debate in this House on 10 January. He does not do long-term thinking, only crisis management. Franchise failure should mean forfeit. If a private train company cannot deliver on the contract, it does not deserve the contract. That was what the Labour Government did in 2009 with the east coast line. This Government’s failure to grasp reality is costing passengers and taxpayers dear. That is why a Labour Government will bring in a railway for the people and businesses that it is intended to serve, and put a stop to this appalling, profiteering racket.