Oral Answers to Questions

Debate between Andy McDonald and Simon Burns

Thursday 12th September 2013 Commons Chamber

[Mr Burns]

Because, as I would hope the hon. Gentleman appreciates, the purpose of Directly Operated Railways is not to run a railway ad infinitum; it is a short-term measure when a problem arises with a franchise. He is absolutely right that as part of the record-breaking investment in our rail infrastructure we are investing in the east coast main line—as we are doing in the west coast main line and other lines— because that is the way forward. With the innovation and impetus of the private sector and a private sector franchisee, the maximum benefits can be ensured from state and Government investment.

[Andy McDonald (Middlesbrough) (Lab)]

Why have the Government reordered the franchising timetable, and what is the justification? The east coast main line timetable has been accelerated way out of order. What is the cost to the taxpayer?

[Mr Burns]

The reason for the change in the timetable is the unfortunate episode with the west coast main line—[Interruption.] I said “unfortunate”. Following the Brown inquiry, we redrew the franchising programmes and took his advice that the west coast main line and east coast main line franchises should not be done at the same time. That is why we are pressing ahead with putting the east coast main line franchise back into the private sector in February 2015.

East Coast Main Line

Debate between Andy McDonald and Simon Burns

Wednesday 5th June 2013 Westminster Hall

[Andy McDonald (Middlesbrough) (Lab)]

It is a great privilege to serve under your chairmanship, Dr McCrea, in this vital debate on the future of the east coast main line. I am sure you will keep us on track and on time. Debates between hon. Members on nationalisation and democratic control of industry often stall due to an obstinate adherence to our political prejudices. All of us, on both sides of the House, have political prejudices about the relative merits of private and national ownership of basic industries. At the outset, I invite Members to disregard all preconceived theories and consider the future of the east coast main line objectively, as a technical problem with hard facts.

According to a written answer from the then Minister of State for Transport in 1996, the total gross proceeds to the taxpayer from selling off our rail infrastructure were £5.28 billion. Adjusted for inflation, that would be slightly more than £8 billion today—equivalent to only the past two years of taxpayer subsidy. According to the Office of Rail Regulation, the east coast main line is the only line in the country that comes close to paying for itself. Government subsidy makes up only 1% of East Coast’s income, against an industry average of 32%. The total cost to the Exchequer of the east coast main line was only £9 million in 2011-12; by comparison, Northern Rail, jointly owned by Serco and the Dutch Government, cost the taxpayer £685 million. Since the UK Government put the franchise under the publicly owned Directly Operated Railways, financial stability has been restored. The total premium, plus operating profit, amounted to £647.6 million in the four years to 31 March 2013; that is more in both cash and real terms than any previous franchise on the line, and all that money is available for reinvestment in our railway network.

East Coast has seen revenue growth of 9% over three full years, with 4.3% growth in 2012-13. The Minister of State described that growth to the Select Committee on Transport as a “plateau”. One wonders what word he would use to describe the Chancellor’s performance over the same period.

[The Minister of State, Department for Transport (Mr Simon Burns)]

Very good.

[Andy McDonald]

Thank you very much.

Journey numbers have grown from 18.1 million in 2009-10 to 19.1 million in 2012-13. An estimated £800 million will have been generated by the franchise for the taxpayer by April 2014. All that has resulted in a £40 million surplus: money that would otherwise be providing the profit to shareholders, if the line were privatised, and which East Coast has reinvested in its greatest asset, its staff. The fruits of that investment are clear to see: employee engagement is now at an all-time high of 71%—up from 66% in 2011 and 62% in 2010—which is the highest score of the eight train operators that is currently available. The average number of sick days has fallen from 14 to nine. Investors in People accreditation has risen from “standard” in 2009 to “silver” in 2012. Impressively, East Coast was the only train company to have achieved “Britain’s top employer” status in 2012 and 2013. Most importantly, on-board passenger-attributed accidents have reduced by 20% and staff accidents by 23% in the past year.

East Coast has also introduced a new timetable—the biggest change on the east coast main line in 20 years—seamlessly launched in May 2011. It introduced 117 extra services a week; a four-hour Flying Scotsman express from Edinburgh to London, calling only at Newcastle; and new direct services between London and Lincoln and Harrogate, and I hope that it will soon restore the link to Middlesbrough, the largest conurbation in the country without a direct link to the capital.