Transport Secretary: East Coast Franchise

Debate between Iain Stewart and Chi Onwurah

Wednesday 23rd May 2018 Commons Chamber

[Iain Stewart (Milton Keynes South) (Con)]

It is a pleasure to speak in this debate. As a member of the Transport Committee, I hope to inject a rational perspective into proceedings. As has been mentioned, the Committee is currently scrutinising this issue. I should add the caveat that our proceedings are still under way and we might receive further evidence later.

The first point I wish to make is that this is not a failing railway in the sense that most passengers would understand it. It operates efficiently; there are high levels of passenger satisfaction; there is growing usage of it; and, yes, there is investment in it. Under Virgin, many of the trains have been refurbished and, although I appreciate that this is not a direct part of the franchise, King’s Cross station has been transformed in recent years, so the passenger experience is being enhanced.

The issue at the heart of this debate is that something went wrong with the revenue projections for the line. That is what we need to scrutinise. It is important to understand the nature of the east coast main line franchise. It has a much larger discretionary element than most other rail franchises, by which I mean that the passengers who use it have many more options for making their journeys. Those options are both on the railways, with other train operating companies running services on large parts of the line—at the southern end of the line, Hull Trains and Grand Central offer alternatives to the Virgin Trains, and further north there is TransPennine Express and ScotRail, meaning that there is a discretionary element to which service passengers use—and, because of the long-distance nature of the network, passengers can choose non-rail alternatives, including flying between Edinburgh and Glasgow or driving between some of the key towns and cities. That makes it much more difficult for anyone in the public or private sector accurately to forecast revenues over a lengthy period. I have had conversations with other train operating companies this week, and they said, “We don’t bid for these long-distance franchises because of that element of uncertainty.”

[Chi Onwurah]

The hon. Gentleman is saying that the issue with the east coast line is that there is competition and that Virgin could not handle that competition so should be bailed out. Does he realise that he is undermining the entire argument, because he is saying that when there is competition, franchising fails?