East Coast Main Line Call Centre

Lord Beamish Excerpts

Thursday 19th May 2011 Commons Chamber

[Mr Kevan Jones (North Durham) (Lab)]

My hon. Friend says that the company is supported by taxpayers, but does he agree that it has also been supported under GNER and now as a state-owned company by many people in the north-east who have loyally given their custom to the railway? Does he think that because of these moves they should perhaps consider alternative forms of travel?

[Ian Mearns]

I am grateful to my hon. Friend for that comment. I have been in discussions with people from East Coast about a range of problems on the east coast main line service. Normally, by this time on a Thursday evening, we are travelling on the east coast main line on our way home. We are very familiar with the levels of service and the investment—

[Mr Jones]

And with how bad it’s got.

[Ian Mearns]

Exactly—and with how bad it has become.

Next week will see the implementation of a new timetable, but it will also see the downgrading of a number of services that East Coast has been supporting. People in the north-east are asking why we should support East Coast when there might well be better alternatives for travel across the country. That is not good from an environmental perspective.

[Ian Mearns]

My hon. Friend is absolutely right. The call centre at Baron house has provided an excellent level of customer service. Nationally, people regard the north-eastern accent as reliable—

[Mr Jones]

Trustworthy, too.

[Ian Mearns]

The accent is regarded as reliable and trustworthy when it comes to providing call centre services, and that is why the north-east has become a centre for call centre operations. Conversely, it is sad to reflect that unfortunately British customers are averse to call centres based offshore.

--- Later in debate ---

[The Minister of State, Department for Transport (Mrs Theresa Villiers)]

I congratulate the hon. Member for Gateshead (Ian Mearns) on securing the debate and on his speech. I completely understand the concerns of those working at the Baron house call centre. It is clear that job losses are a very harsh blow to the people concerned. That is one of the reasons why the coalition Government are working so hard to try to create the right conditions for growth and the creation of new jobs.

[Mr Kevan Jones]

In the north-east?

[Mrs Villiers]

Absolutely, in the north-east and right across the country.

Before responding to the hon. Member’s questions, I must first clarify and reiterate the relationship between the Government and the east coast main line operator. East Coast Main Line Ltd is wholly owned by Directly Operated Railways Ltd, which is, as he pointed out, owned by the Government. East Coast and DOR are companies registered under the Companies Act and operate in accordance with their own articles of association and governance. This provides a framework for the operation of the franchise as a free-standing entity in readiness for the return of the franchise to the private sector, a return that was envisaged by the previous Government as well as the current one.

[Mrs Villiers]

I will explain the relationship between East Coast and the Secretary of State. The aim is for that relationship to replicate the arrangements for franchises elsewhere on the network in order to ensure that the principles of private sector operation are embraced and maintained. The reason for that approach is so that the Secretary of State is able to protect the value of the franchise and the taxpayer gets value for money when the franchise returns to the private sector.

If the Department or my right hon. Friend the Secretary of State were to start intervening in the way the operator runs East Coast, for example by overturning decisions based on commercial considerations, they might well have to answer for their decisions in front of the Public Accounts Committee. I am afraid that we do not believe it a viable option to intervene on the basis of political or non-commercial considerations, even if the Secretary of State were minded to do so.

[Mr Kevan Jones]

On the threat that the Public Accounts Committee is going to question what the Minister does, may I just say as a former Minister that it can question anything a Minister does? So, that argument is a complete nonsense.

[Mrs Villiers]

The Secretary of State is under a duty to safeguard the assets vested in the Department for Transport. The East Coast operation happens to be one of those assets, so it would be irresponsible to intervene and overturn the operator’s commercial decisions.

--- Later in debate ---

[Mrs Villiers]

The people best placed to make the decision about what is best for the East Coast operation are the specialist practitioners who run East Coast Ltd, not Ministers, not Members. Those practitioners are the best people to make the best decision about what is in the interests of fare payers and taxpayers. East Coast is confident that the new arrangements will deliver better services for passengers and far better value for money.

[Mr Kevan Jones]

Will the Minister give way?

[Mrs Villiers]

As I will outline, should I get the opportunity, the options were fully explored in relation to continuing the relationship between the Baron house call centre and the East Coast operation, but it was found not to be viable in terms of value for money. If East Coast were to ignore value-for-money considerations, not only would the taxpayer suffer, but the fare payer would as well.

[Mr Jones]

Has the right hon. Lady, as a Minister, looked at the case in detail, taking into account not only the value for money for East Coast, but the cost to the taxpayer in terms of redundancy payments directly from the company and the unemployment benefit that will have to be paid in the north-east of England? Has she actually looked at the case in detail?

[Mrs Villiers]

I can assure the hon. Gentleman that East Coast has looked in detail at the viable option for the operation of the franchise.

[Mr Jones]

But have you?