Transport Secretary: East Coast Franchise

Grahame Morris Excerpts

Wednesday 23rd May 2018 Commons Chamber

[Chris Grayling]

Any franchise that runs its full term is expected to pay the full premiums, but when National Express went under and there was a further £1.5 billion of premiums to pay, that money continued to be paid by the new operator, in the same way that the premiums that we are expecting will continue to be paid by the operator in this instance. This is my point: the hon. Gentleman does not understand how the finances of the railways work, and that is why the Labour party is so unfit to be in opposition, let alone to govern.

[Grahame Morris (Easington) (Lab)]

rose—

[Lilian Greenwood]

rose—

[Chris Grayling]

I will give way first to the hon. Member for Easington (Grahame Morris) and later to the Chairman of the Transport Committee.

[Grahame Morris]

I am grateful to the Secretary of State. I hope that he will clear up that point about the last Labour Government and National Express. As a member of the Transport Committee, I heard a former Transport Secretary, Lord Adonis, explain that sanctions had been applied and that that particular operator was not permitted to bid for other franchises, which was a significant sanction.

[Chris Grayling]

If I am not mistaken, Lord Adonis actually accepted before the Select Committee that that did not happen. He thought that standing up in Parliament and saying that there would be a ban meant that there actually was one. I assure the hon. Gentleman that my Department looked very carefully at this and no evidence of any ban has been found. Moreover, a report from the National Audit Office stated that it had found no such evidence.

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[Grahame Morris]

Will the hon. Gentleman give way?

[Stephen Hammond]

I am mindful of the six-minute limit. I have taken two interventions, so I will not take one from the hon. Gentleman.

That private investment, which Labour so heavily opposes, is the very investment that will greatly benefit the people who travel on the trains, about whom all hon. Members should be most concerned. Under Labour proposals, that investment would disappear.

I applaud my right hon. Friend the Secretary of State, who has come to the House with a future rail strategy. It is a great start, but he knows I would like him to go further in a few key areas. I went to speak to the managing director of South Western, which runs the trains around my area. The reality is that Network Rail is causing the bulk of the delays. I am delighted to see public-private partnerships, but I urge my right hon. Friend to go further with his plans to devolve sections of Network Rail, which would provide local accountability and responsiveness to local passenger need. Let us not worry ourselves about nationalisation; let us make sure we get this right. It is ironic that the part of the railway that is most criticised is the nationalised part.

My right hon. Friend the Secretary of State made the point about timetable delays and one or two other issues. The projects division inside Network Rail is responsible for many good works, but it is also responsible for a number of delays. I urge him to get the private sector more closely involved in the design and concentration of projects.

Finally, I am pleased to say that this motion fails at the most basic level. It is wrong to censure the Secretary of State, who has followed the right processes. The last thing this country needs is to go back to the 1970s. It needs to look forward to the 2020s, and nationalisation can never be the answer.

--- Later in debate ---

[Grahame Morris (Easington) (Lab)]

It is a privilege to speak in this important debate. I would like to recognise the expertise of many members of the Transport Committee, on which I have the honour of serving.

Listening to the debate, I cannot help feeling a sense of déjà vu. The shortcomings of privatisation and the franchising process are demonstrated by the private operators running the east coast main line. I was slightly amused when the former Rail Minister, the hon. Member for Wimbledon (Stephen Hammond), who is very affable, talked about the golden age of privatisation and how wonderful the new rolling stock was. I just checked the age of some of the rolling stock on the east coast main line. The InterCity 125 diesel-powered high-speed trains were introduced in 1976; the 225s, which were the mainstay, were introduced in 1989; and the Pacer trains on the Northern Rail franchise were introduced in 1984, so let us have a sense of realism.

This is the third occasion in a decade that the Government have had to accept back the keys to a failed east coast franchise. A failure once we can excuse and twice is unfortunate, but the third time is a cause for censure and for reflection. It demonstrates that the Government’s desire to privatise the east coast main line is nothing more than adherence to blind political ideology.

It is ironic that the Transport Secretary, as a leading Brexiteer and staunch privateer, now allows our railways to be run by any state-owned company except one owned by the British state. The right hon. Gentleman might like to dust off an old phrase to use in this context: “Take back control”. He would be in good company, as numerous surveys show that 70% of the public support calls for the railways to be publicly owned—run in the public interest, not as a cash cow for private operators.

I remind the House that, when in public ownership, the east coast main line returned over £1 billion to the Treasury to be used either to upgrade the rail service or for vital public services. In 2015, we were told that re-privatising the east coast main line represented “best value” for commuters and taxpayers, and I do not believe the Secretary of State has adequately explained how that can be reconciled with the decision to bail out Virgin-Stagecoach to the tune of £2 billion.

Why do the Government not hold such companies to their contractual commitments? The noble Lord Adonis, with whom I do not always see eye to eye, gave some interesting evidence to the Transport Committee. He questioned why it is acceptable for corporate entities to walk away from their commitment to us—the taxpayers—to my constituents and to the Government. We really should take a harder line with the private train operating companies. We should block companies that have corporate structures and base themselves in tax havens from bidding for public contracts. A decision to overbid on such a contract is simply corporate irresponsibility, and the taxpayer is being fleeced time and again.