East Coast Main Line
Debate between Karl McCartney and Sharon Hodgson(11 years ago)
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Mrs Hodgson
That is a very good question, which the Minister will perhaps answer. For all of us here and our constituents, that is the question, and our only answer is that dogma and ideology are forcing re-privatisation to go ahead. The Government have pressed on regardless, and the tendering process is well under way, which is why my colleagues and I thought it was time for another debate.
Karl MᶜCartney (Lincoln) (Con)
It is a pleasure to serve under your chairmanship, Mr Bone. The hon. Member for Wansbeck (Ian Lavery) made an interesting intervention in which he mentioned that the Opposition are blaming the current Government. Will the hon. Lady tell me exactly how many train companies were renationalised in the 13 years of the Labour Government?
Mrs Hodgson
We are not talking about the renationalisation of the east coast main line—it has already been nationalised—but about how to stop it from being re-privatised. The point is that it is already in national ownership.
Mrs Hodgson
That is the point—the east coast main line does not need to change. The process might ultimately lead to a significantly worse deal for all our constituents, as well as for the Exchequer, when there is absolutely no need to go down such a path.
As I and others said in the last debate, East Coast is doing very well under the current arrangement, both for passengers and the Exchequer. Since the failure of National Express, thousands more services have been timetabled; hundreds of thousands more passengers have used services; significant investment has been made in passenger comfort and stations, including at Newcastle; customer satisfaction has been at record highs, notwithstanding the recent blip; and complaints have been handled in a timely way 98% of the time, compared with 73% of the time under private ownership.
Mrs Hodgson
No, I will not. I will make some progress, because many hon. Members want to speak.
This is the people’s railway. It is delivering real improvements for our constituents, unencumbered by the primary purpose of having to pay dividends. That is not to say that Directly Operated Railways is squandering millions on such trivial things as improving the experience of their customers and therefore winning more of them; it is also chipping in a lot of money to the Exchequer. By the end of this financial year, it will have returned £800 million to the Treasury and put the rest of its surplus of nearly £50 million back into the service. It of course gets the lowest rates of public subsidy of all the train operators, except London commuter services.
Ministers have always talked about the need for a private operator to bring in extra investment, but have failed to make clear how much will be brought in by this process. What investment we know about appears to come from the public purse. Just as with Royal Mail, Ministers seem to be privatising the profit, while keeping the ongoing costs on the public books.
The Minister will say that decisions should not be taken on the basis of ideology, and to an extent I agree, although I must of course confess to having a default opinion when it comes to the ownership of public services. However, the returns to the Treasury and the improvements in services provide the business case in support of our argument that the line should remain directly operated. Perhaps that is why nearly half of Tory voters oppose the Government plans. If anyone is guilty of ideological decision making on this issue, it is surely the Government.
As if the west coast main line shambles, which cost taxpayers £55 million, was not bad enough, the contract extensions for other franchises—the Government have had to negotiate them so that they could bring forward the east coast main line tender—will cost taxpayers millions more in lost revenue. For example, First Great Western paid £126 million in premiums last year, but will pay only £17 million next year, as a result of the extension terms it has been given by the Government. Ministers are actually throwing money away hand over fist, just so they can make a point of privatising a franchise that they know is doing perfectly well in public hands.
Mrs Hodgson
I will go away and look more closely at the matter. I may have missed the part to which the Minister refers. Perhaps he could write to me about it, so we can be assured that there will not be a third-class rail service.
I will conclude because many Members wish to speak in the debate. I leave the Minister with the words of one of his departmental predecessors, the noble Lord Adonis. He was regularly cited by Ministers as being against public ownership when he was Secretary of State, and that was correct. However, given the success of Directly Operated Railways, he recently had this to say:
“In the last four years East Coast has established itself as one of the best train operating companies in the country, both operationally and commercially…This has fundamentally changed the situation, and it is right and proper that East Coast should be allowed to continue as a public sector comparator to the existing private franchises.”
Lord Adonis is a wise man. He had an opinion. He looked at the evidence that contradicted his opinion and, like many a wise man before him, accepted that his opinion had been wrong and changed his mind. There is still time for the Minister and his colleagues to demonstrate similar wisdom and halt this process before more money is spent by the Department and the companies that might bid. They should accept that this experiment in public ownership, forced upon a reluctant Secretary of State at the time by the failure of a private provider, has been a success and can continue to be a success.
Mrs Hodgson
No, I am just winding up. I am sure the hon. Gentleman will get his chance to speak in a moment.
Most importantly, it is time for the Government to put British passengers and taxpayers first, before taking profits out of the system—especially where such profits then go to subsidise passengers in other countries. As I said in June, I hope the Minister will listen to what parliamentarians are telling him here today. We have already had the shambles over the west coast main line. It is in everyone’s interests for the Government not to make the wrong decision on the east coast main line as well. Let us call off the tender and give Directly Operated Railways the stability and support it needs to carry on improving services and sending much-needed cash back to the Treasury. At the very least, let us allow it to bid to run the service again in the coming years, and weigh up the public benefit that that would provide in a fair and open way. Come on, Minister: it is public versus private. Surely he is up for that.