Transport Secretary: East Coast Franchise — House of Commons, 2018-05-23
Topic: Transportation
Huw William Merriman (Conservative, Centre-right): It is a great pleasure to follow my Transport Committee colleague, the hon. Member for Easington (Grahame Morris), who always speaks well on this subject I am very interested in why this franchise has been brought in-house yet again, and the Transport Committee is keen to get under the skin of whether there is a particular issue with this franchise that causes it to be more problematic than others. We were very fortunate to have two respected industry professionals come and speak to the Committee, Iryna Terlecky and Nicola Wood, who both act independently to verify whether a franchise should be passed. Quite simply, their point about why this franchise failed is that the bidders overbid. Why did they overbid? Because they took the view that this network is the jewel in the crown of the UK rail network, and if a private company has the jewel in the crown, that sets it up well for the remainder of its franchises. The House may welcome my taking a step back. The Government can of course be looked at—they should, rightly, be looked at—for allowing this to happen on their watch, but it would be slightly negligent of a Government not to try to take the maximum amount of money they could for the taxpayer. That money ultimately allows the Government to continue with the financing of the entire rail network, and in that regard I think that such strong criticism is based a lot on ideology in relation to who should run the railways. In my view, although I will always regard the private sector as the better operator, where the private sector cannot operate, the state will of course step back in, as has indeed been the case Network Rail has taken a bit a battering in this debate. It was quite clear to us from the evidence—indeed, VTEC has acknowledged this—that, in terms of the works Network Rail has delivered, it is not responsible for the issues on this line. It may be that Network Rail became a problem, but it delivered during control period 5. We should acknowledge that, rather than use it as a scapegoat, as it often is. [Interruption.] Quite frankly, I am not particularly bothered what Richard Branson has to say. That actually tends to be the case, but I think he looks more to Brexit and other reasons to explain why this has failed, when we have in fact seen more of an inflow of people staying in this country, rather than leaving This point has already been raised, but I want to mention the noble Lord Adonis. I was particularly impressed by the evidence he gave to the Select Committee, and he was very balanced. He made the point that, in his view, all the franchise systems work well, but this line is an exception and has been one previously, and there is no reason to change a model that he still believes works well. He is worth listening to, but I take issue with his claim that, on his watch, a bidder such as Virgin-Stagecoach would not have been allowed to bid again and would have lost its other franchises. Of course, when National Express suffered the same fate, the legal advice was that the cross-default mechanism did not allow it to be stripped of the other two franchises, and it was not stripped of them. It is all well and good for Lord Adonis to say that a future Labour Government would have stopped such bids coming through, but he knows full well that between 2009 and 2010 there was no option to do so, so we will never know whether that would have been the case In the 30 seconds I have left, I want to talk up our rail network. In my view it works well. Within the EU, we have the largest investment in the railways; the utilisation of our railways is 60% greater than the EU average; and the European Commission has found that there are £11 billion of efficiency savings for the other 27 members to deliver, but zero for the UK. We have the second safest railway and the second highest passenger satisfaction ratings. That is hardly surprising, given that we have doubled the number of passengers since privatisation. I want to talk up rail because it still has more to offer us in private hands.