East Coast Main Line

Lilian Greenwood Excerpts

Wednesday 5th June 2013 Westminster Hall

[Lilian Greenwood (Nottingham South) (Lab)]

It is a pleasure to serve under your chairmanship, Dr McCrea. I congratulate my hon. Friend the Member for Middlesbrough (Andy McDonald) on securing this important debate. We have heard about the many improvements that have been made on the east coast since 2009. My hon. Friend set out the hard facts. East Coast has made real progress since Directly Operated Railways stepped in. Yes, there is more progress to be made, but I struggle to recognise the picture of East Coast treading water. A number of puns have made, but I am not sure that the metaphor of a railway treading water, used by the hon. Member for Cleethorpes (Martin Vickers), is one that I would use. However, hon. Members have provided examples of hard facts that support the call for the east coast main line to remain as a not-for-private-profit operator.

My hon. Friend the Member for Washington and Sunderland West (Mrs Hodgson) noted the improvements to punctuality that she and her constituents have benefited from. My hon. Friend the Member for Edinburgh East (Sheila Gilmore) noted the improvements in targeting business travellers, who might otherwise travel by plane, with worrying environmental consequences. There has been a 19% increase in those using the first-class service.

The hon. Member for Stevenage (Stephen McPartland) described a huge improvement in services to his constituency. He also said that passenger satisfaction should be a key measure. Of course, East Coast is getting better and better. Passenger Focus, the independent watchdog, recently recorded 92% satisfaction with East Coast—the best score found in its survey on that line since it was launched in 1999, better than under GNER or National Express.

As my hon. Friend the Member for Easington (Grahame M. Morris) suggested, the hard facts point to this being a dogmatic, ideological privatisation, rather than one based on the service.

[Stuart Andrew (Pudsey) (Con)]

I take it that the hon. Lady would want completely to dissociate herself from the comments made by the former Labour Transport Secretary, Lord Adonis, who said:

“I do not believe that it would be in the public interest for us to have a nationalised train operating company indefinitely.”—[Official Report, House of Lords, 1 July 2009; Vol. 712, c. 232.]

[Lilian Greenwood]

I do not know when the hon. Gentleman last spoke to Lord Adonis, but sensibly, like the rest of us, he responds to a change in circumstances. Over the past four years, we have seen East Coast perform well under Directly Operated Railways. Therefore, now is the time to keep it as a publicly operated service.

[Mr Simon Burns]

The hon. Lady has said something important. I do not know when she last spoke to her noble Friend Lord Adonis, but when she did, did he tell her that he had changed his mind?

--- Later in debate ---

[Lilian Greenwood]

I last spoke to my colleague probably two weeks ago. Certainly, he has changed his mind.

[Andy McDonald]

Does my hon. Friend recognise that Lord Adonis made his remarks some years ago on the basis of a National Audit Office report that looked at only eight franchises? That report underestimated the 2011-12 subsidy necessary from the taxpayer to those eight franchises by £224 million. We cannot rely on those comments, which were made in good faith at that time on false information.

[Lilian Greenwood]

The noble Lord is not here to set out his position, but I am sure that we will hear from him in due course.

[Mr Burns]

Can I help the hon. Lady on that point?

[Lilian Greenwood]

No, I have too little time.

[Mr Burns]

On that point—

[Dr William McCrea (in the Chair)]

Order.

[Lilian Greenwood]

I agree that we should be paying tribute to the work of East Coast staff. They stepped into the breach at a difficult time. The two previous franchise holders failed, with one operator walking away from its obligations entirely. Yet East Coast, run as a not-for-dividend operator, has achieved what its predecessors could not: stability and constantly improving services. This Government’s actions are putting that progress at risk.

It is worth briefly highlighting how strong East Coast’s performance has been. Passenger satisfaction is up by 12% over the last year; 3 million more seats per year have been provided; punctuality has improved and a new timetable has been established; and the service has more than held its own financially. As a not-for-dividend operator, East Coast has already returned £640 million in premium payments to the taxpayer, while recording a £40 million profit.

[Fiona O'Donnell (East Lothian) (Lab)]

I am sure that my hon. Friend is aware that the east coast main line passes through my constituency. It not only gives passengers a beautiful view of East Lothian, but is an essential part of the community of Dunbar. The instability is worrying people who use that service both to commute to London and into Edinburgh.

[Lilian Greenwood]

My hon. Friend is right. That instability is causing concern. Another thing causing concern is the fact that that £40 million profit, which has been reinvested in the service, would, under this Government’s plans, be split with shareholders instead.

I know from my own region how better services have made a real difference to passengers. In the east midlands, more services now stop at Newark; direct trains have been established daily between Lincoln and London; and two weeks ago a new commuter service was launched from Grantham. Bearing all this in mind, it is difficult to recognise the Government’s description of East Coast’s performance. Indeed, the Minister has said that punctuality on the east coast has plateaued. He even said that East Coast was the worst operator for punctuality when he appeared before the Transport Committee in April. He was then quoting from a very narrow, four-week window. Will he acknowledge today that this picture is not representative? According to Network Rail’s most recent punctuality figures, East Coast outperformed Virgin in both the last quarter and over the whole year, without the benefits of a £9 billion upgrade of its infrastructure. So this privatisation cannot be about punctuality, given that the Government have announced an extension to the operator’s contract on the west coast main line, where delays are more common.

It has been said that the Government are seeking a commercial partner to deliver investment, but will the Minister confirm today that the cost of upgrading the east coast main line and procuring new rolling stock will be met through public spending? In April, the Minister said that franchises should be measured

“by the premiums that are paid to the Government”,

as well as by reliability and overcrowding. But East Coast has made improvements in all those areas and grown the business, on a route that was last upgraded in the 1980s. The operator has developed a five-year plan and could deliver further success, if only the Government took the sensible step of backing it. Instead, we have seen an ideological decision to re-privatise the service. This is a damning indictment of this Government’s priorities at a time when the franchising system has collapsed and the National Audit Office has questioned the Department’s ability to deliver major projects.

The collapse of franchising has cast a long shadow over the rail industry. The fiasco has cost the taxpayer at least £55 million. Orders for rolling stock are on hold and the supply chain has been hit, threatening jobs and skills. The Government should be putting their house in order, so it is worrying to see Ministers instead, devoting their time to this unnecessary and unwanted privatisation, which suggests that they have not learnt the lessons from the recent past.

East Coast is working. The Office of Rail Regulation recently confirmed that East Coast receives virtually no subsidy and makes the second highest contribution back to the Treasury. We should not be undermining a successful service that has delivered real benefits for passengers. There has been enough instability on the line and the network as a whole benefits from having a public sector comparator, as my hon. Friend the Member for York Central (Hugh Bayley) suggested. I hope that the Government will now do the right thing and cancel this costly and unnecessary privatisation.

--- Later in debate ---

[Mr Burns]

The hon. Gentleman is a dinosaur in health, and he has now moved to transport. I hope he is not following me around.

[Lilian Greenwood]

In 2009, the Under-Secretary of State for Transport, the hon. Member for Lewes (Norman Baker) said that if a franchise holder walks away, a public sector comparator should be maintained. Is the Minister in agreement with his departmental colleague?

[Mr Burns]

The hon. Lady anticipates the very point I am about to make, which is that, under the Railways Act 1993, the Secretary of State has a statutory duty to ensure the continuous, seamless provision of rail services. That is why the Department for Transport has Directly Operated Railways. It is a body of last resort when there is a problem; it is not a permanent company, for want of a better term, to run a rail franchise indefinitely. My hon. Friend the Under-Secretary was correct in 2009, and the noble Lord Adonis was also correct.