Rail Franchising

Debate between Hilary Benn and Andy McDonald

Wednesday 10th January 2018 Commons Chamber

[Andy McDonald]

I will make a little progress, but I will take interventions later.

In 2016, the Department for Transport set out that its aims and objectives for rail franchising were

“to encourage a flourishing, competitive passenger rail market which secures high-performing, value for money services for passengers and taxpayers whilst driving cost effectiveness.”

The Department has clearly failed to meet those objectives. The latest collapse of the east coast franchise, which was announced in November, makes a mockery of the Department’s 2016 aims. Virgin-Stagecoach did not deliver and defaulted on their contract, and the Secretary of State has given them a gift.

[Hilary Benn (Leeds Central) (Lab)]

Given that this is the third occasion in just over a decade that a private contractor has announced that it wishes to hand back the keys to the east coast franchise, was it not a fundamental mistake for the Government not to allow East Coast, which successfully ran the franchise for more than five and a half years and paid back £1 billion to the Treasury, to continue its good work? Instead, the Government ideologically said that anyone could bid to run the franchise except the state-owned company that had run it so successfully.

[Andy McDonald]

My right hon. Friend makes a perfect point. I have no doubt that that will be a consistent theme throughout this debate.

The Government should have followed Labour’s example. When the operator defaulted in 2009, Labour took the contract back into the public sector. If a company defaults, it does not deserve a contract. Taking a contract back into the public sector would mean that there is no reward for failure, and other companies in the industry would not expect the same treatment. In the light of what happened with the east coast franchise, what plans does the Secretary of State have to renegotiate the TransPennine Express, Northern and Greater Anglia franchises?