East Coast Main Line

Graeme Morrice Excerpts

Tuesday 12th November 2013 Westminster Hall

[Graeme Morrice (Livingston) (Lab)]

People wait all day in Westminster Hall for one Graeme Morrice to turn up, then two turn up at the same time.

It is always a pleasure to serve under your chairmanship, Mr Bone. I congratulate my hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) on securing this important debate on the future provision of the east coast main line rail service. She mentioned that she is a regular user of the East Coast service to London King’s Cross, and I travel regularly on the service from Edinburgh Waverley. We are both aware, as I am sure are many other hon. Members, of the benefits provided by the service to Scotland, the north-east of England, Yorkshire and beyond.

I note that, like me, my hon. Friend appreciates the general reliability, frequency, excellent customer service and value for money the service provides to all passengers. As a state-owned operator, the ethos of putting the customer first and ensuring the most effective and efficient use of public resources is the company’s prime objective. Private companies can be just as good, of course, but their foremost loyalty is to their shareholders and any profits not reinvested go on share dividends, often to already wealthy people.

The difference with East Coast being a subsidiary of Directly Operated Railways, a holding company owned by the Department for Transport, is that its surpluses are paid back to the Exchequer. As my hon. Friend has already mentioned, £800 million has been returned to the taxpayer since 2009. Moreover, East Coast has invested some £40 million in infrastructure and asset improvements in that period.

East Coast also has the best punctuality on the line since the service was privatised, and all passenger surveys and polling indicates that the overwhelming majority of people are satisfied with East Coast and wish it to remain in public ownership. So why are the Conservative-led coalition Government, supported by their compliant fellow travellers in the Liberal Democrats, intent on re-privatising what is evidently a most successful, lucrative and popular public service? Has re-privatisation been proposed for the right financial and service reasons, or is there another, perhaps more partisan, explanation? From the evidence available, it is apparent that that privatisation is born of ideology, not necessity.

Indeed, in answer to a parliamentary question in April, the previous Minister with responsibility for railways, the right hon. Member for Chelmsford (Mr Burns), implied that investment in the east coast main line’s infrastructure is not dependent on re-privatising passenger operations:

“Funding for the 2014-19 upgrade of the east coast main line will be delivered through the Office of Rail Regulation approving a £240 million increase in the value of Network Rail’s regulatory access base. Network Rail may then borrow up to this amount to fund the upgrade works.”—[Official Report, 15 April 2013; Vol. 561, c. 2W.]

For the sake of clarity, it would be helpful if the new Minister with responsibility for railways stated whether any elements of replacing and upgrading the electrification on the east coast main line are dependent on the transfer of the operation of passenger services to the private sector. Similarly, it would be useful if he explained how that investment will be delivered more swiftly if privatisation takes place. Finally, will he provide details of the increased investment, over and above the taxpayers’ money being put into the line, that would be delivered as a result of privatisation?

The past, current and planned public investment in the east coast main line has been and continues to be highly effective. If further investment is required, however, it could easily be provided by public means, given that the service returns far more to the Exchequer than it receives in subsidy. Furthermore, given the thoroughly negative history of private involvement in the east coast main line, it is highly probable that, if the East Coast service is privatised, taxpayers will be left to pick up the tab, as we have seen in so many other botched franchise deals, including, not least, on the west coast main line.

The British taxpayer has funded the east coast main line service successfully since November 2009, following 12 years of declining profits and eventual failure under Great North Eastern Railway and National Express. The service became hugely profitable almost immediately after re-nationalisation and has returned its soaring profits to the Exchequer every year, with the estimated total returned by the end of this financial year in excess of £800 million.

It is unfathomable that the coalition Government’s response to that success, which came about so quickly after years of failed management by the private sector, is to decide that this is a good time to give the private sector not just a second, but a third chance. It is appalling that the Minister and his Department are so eager to overlook the clear demonstration of the high quality of our public rail service management, the dedication of train staff and the co-operation of rail unions.

Rather than continue with this charade, the Minister should focus his efforts on sorting out the debacle of the west coast main line and other, similar franchise fiascos. It is ill-advised for the Government to create an issue out of nothing and to waste resources trying to solve a problem that does not exist, when they struggle to deal with real problems and real issues, often of their own making. I can conclude only that political dogma is driving this agenda, which I hope will ultimately be derailed.

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[Mark Lazarowicz]

rose—

[Graeme Morrice]

rose—

[Grahame M. Morris]

rose—

--- Later in debate ---

[Graeme Morrice]

The question I was going to put has already been asked by my hon. Friend the Member for Edinburgh North and Leith (Mark Lazarowicz), but given the discussion earlier about the public view on this issue, does the hon. Gentleman not accept that the overwhelming majority of the public, including passengers, oppose privatisation? Is he aware that the Government have actually consulted on the issue?

[Karl MᶜCartney]

I am, and I am happy to accept that the majority of people in his constituency, and the passengers who use the rail station he uses, might, like him, not want to see any changes to the level of services they enjoy. However, some of us, in seats that do not receive such a regular service, might feel differently, and that might be where the ideological difference is.

--- Later in debate ---

[Stephen Hammond]

The hon. Lady cannot argue that we are rushing it through when she has just said that we are keeping to the original timetable. The then Secretary of State, my right hon. Friend the Member for Runnymede and Weybridge (Mr Hammond) announced a timetable and we had already started the consultation prior to the west coast refranchising process being stopped, so it is nonsense to argue that this is rushed.

[Graeme Morrice]

I am grateful to the Minister for giving way. I appreciate that time is running out. Will he confirm what public consultation there has been with passengers and passenger groups, and what the outcome was?

[Stephen Hammond]

We followed the absolutely standard procedures. We had a public consultation between June and September 2012, and there will be further consultation when the ITT has been finalised. The Government are putting in place the refranchising process that will deliver the best partner to deliver the best benefit for all customers on the east coast main line. That is the way forward.