West Coast Main Line

John Hemming Excerpts

Monday 17th September 2012 Westminster Hall

[Mark Pawsey]

I will come on to the First bid, including questions that other hon. Members and I have put to it about the accuracy of its bid and where its bid stands. I am not sure that making comparisons with other Departments in this debate is helpful, Mr Bone. We need to ensure that the Government get the maximum value for money for every item of expenditure.

[John Hemming (Birmingham, Yardley) (LD)]

As a Birmingham MP I use that train, although, to make a declaration of interest, I came down on the Chiltern line. Does my hon. Friend agree that consideration should be given to whether closing down one competitor may reduce the competitive nature of tendering in future and increase aggregate costs?

[Mark Pawsey]

I am about to talk about my own business experience in tendering. Clearly, the more tenderers available in the tender process, the greater the competition and the better chance of getting the best deal.

The First bid is worth more. I have run a business and, on occasions, have missed out on a contract, so I understand Virgin’s concern. In my business, from time to time we lost contracts, which was particularly frustrating when we were confident in a bid and had given exceptional customer service in recent years. It is appropriate and shrewd business for Virgin to encourage their satisfied customers to make representation through the petition. That activity has stimulated this debate.

It is estimated that 2,000 service users from my constituency are among those who signed the petition. I have received many letters and e-mails from constituents asking me to participate in this debate and drawing attention to the substantial improvements in service that they have experienced over the years. I am happy to do that. There are, of course, those who have not had such a good experience and I have in front of me an e-mail from one of those.

In addition to the increase in revenue to the Government, FirstGroup’s offer contains other positives. My hon. Friend the Member for Milton Keynes South (Iain Stewart) drew hon. Members’ attention to the additional seats and services that would be made available. I can, perhaps, support my hon. Friend the Member for Nuneaton (Mr Jones), because I met the managing director of FirstGroup only last week and he told me that he hoped that additional services might be available between Rugby and London early in the morning, and that access from Rugby to the north-west might be improved through Nuneaton, using Nuneaton as a hub station for the north-west. Innovation and proposals are coming from FirstGroup that were not available through Virgin.

The issue distils down to whether First has got its sums wrong. Did it get something about the maths wrong when preparing its bid—something that it did not take into account? I put that to First’s managing director last week and suggested that, if there were anything about his tender that in the clear light of day—in the light of discussions or ideas coming from Virgin and Opposition Members—he is not sure about, right now, before the new contract is awarded, First has the opportunity to withdraw. It might choose to say, “Yes, there are some points that people have drawn to our attention. We did not quite get our maths right. Our projections in the back end are just a little bit ambitious.” There is a window of opportunity for it to say, “Yes, we got it wrong,” and to leave. It does not wish to take that opportunity.

I have looked the managing director of First in the eye and asked “Are you able to deliver what’s proposed?”, and I am confident that he understands the significance of what he has done. Ultimately, he is part of a management team responsible to shareholders within FirstGroup. If First has got anything about the tender wrong, it needs to be called to account through the courts and be held to the commitment that it has made. It happens in plenty of other businesses; I do not see why that should not happen in this instance.

The delays in the process are unfortunate. Certainly, there is no benefit to anybody, whether the companies, the staff or rail users, if there is a short-term nationalisation, such as has been suggested if First is not able to receive its contract before the judicial process is concluded.

I advise the Minister to please get on with the process. I call on Virgin to withdraw its application for a judicial review. A decision has been taken. Let us get on with it and ensure that we get the right service for rail users in our constituencies.