East Coast Main Line

Ian Swales Excerpts

Wednesday 5th June 2013 Westminster Hall

[Ian Swales (Redcar) (LD)]

I congratulate the hon. Member for Middlesbrough (Andy McDonald) on securing this debate and on his excellent speech, which fully covered many of the issues. I have been a regular traveller on the east coast main line for more than 25 years for business purposes. It seems hard to believe that it is the most successful and profitable line in the country, because the bungled franchises under both Governments and under-investment have left us with old trains, poor punctuality and high fares.

Arriving at Darlington station to come to Parliament, I have a choice: buy a standard return ticket, or get back in my car, drive to London and do the return trip that way. At 45p a mile, I save the taxpayer £60 if I drive. Is there anywhere else in the world where a mass transit system is so much more expensive than each passenger recovering in full the cost of driving a car?

In the year to March 2012, East Coast made a profit before tax and payments to the Department for Transport of £196 million on a £666 million turnover; that is more than 29%. It is high time that some of that money was used both to reduce the fares and to upgrade the rolling stock. Until then, users of the line are bound to feel that they are being ripped off and, in effect, used to subsidise the rest of the network.

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

My hon. Friend makes an important point about the quality of the rolling stock, but is he not aware that the inter-city express programme, which will be built in the north-east, will introduce new trains on the east coast main line?

[Ian Swales]

Indeed, and I hope they will be built in the north-east at the new Hitachi factory. Let us hope the public procurement produces the right answer.

I note the Opposition’s position. They had the chance to make the franchise public in 2007; they did not, and they went into the last election promising a refranchising in 2011. The Public Accounts Committee, of which I am a member, reviewed the east coast fiasco in mid-2011. It mainly considered the National Express failure, which was a familiar story of unrealistic bidding, poor due diligence, poor contracting and wasted taxpayers’ money. Since then, the Department’s franchising team has caused the west coast train disaster with another huge loss of taxpayers’ money. Will the Minister give us confidence that a proper job will be done this time?

Although I understand the commercial sensitivity, I feel that the whole bidding review process should be as transparent as possible. Independent experts should be involved from the start to provide scrutiny to avoid unrealistic assumptions producing the wrong answer. Taxpayers should not have to wait for the National Audit Office to pick over the entrails again. Furthermore, if the offers are not good value for travellers and the taxpayer, continuing public ownership must be a realistic alternative. As the hon. Member for Middlesbrough said, we should not start with the answer and allow political dogma to decide.

I hope that the bid review process will also be stress-tested. For example, there should be no assumptions about tax recovery from companies, which then avoid tax, as we constantly see in the world of the private finance initiative.

With its inherent profitability, and given that the 250-mile journey from Darlington to London takes as little as two and a quarter hours, the east coast line should be the jewel in the crown of the UK rail network. However, with two bungled franchise deals behind us, the Minister has a lot to do to convince us and the public that this will be third time lucky.