East Coast Main Line

Debate between Lilian Greenwood and Fiona O'Donnell

Wednesday 5th June 2013 Westminster Hall

[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.