Rail Update

Lord Adonis Excerpts

Monday 5th February 2018 Lords Chamber

[Lord Adonis (Lab)]

My Lords, there is a huge amount of waffle in the Statement that the noble Baroness has just repeated. But I shall cut through it: Chris Grayling, the Secretary of State, is undertaking another unjustified bailout of Virgin and Stagecoach at the expense of taxpayers. I would like to ask the noble Baroness a few questions about this bailout. First, will she confirm that Virgin has been awarded its new contract for the west coast main line without any competition whatever? Secondly, will she confirm that Stagecoach is being allowed to bid for the next three franchises despite walking away from the east coast main line? Thirdly, will she confirm that Mr Grayling appears, astonishingly, to be prepared to allow Stagecoach to continue operating the east coast line despite walking away from it, and that he has not ruled this out, although he is putting in place legal procedures that look to me to be the prelude to re-awarding it the contract? Fourthly—this affects my tenure in the office of Secretary of State personally—will she confirm that it is quite wrong to say that National Express was not banned by me from bidding for future contracts in 2009? It was banned. The incoming Conservative Government in 2010 lifted that ban, which is a fundamentally different point. I believe that that was a mistake and that it has prepared the way for the problems that we face today.

Finally, will the noble Baroness confirm that the reason for these disgraceful bailouts which we have seen from Mr Grayling is because he simply is not prepared to contemplate putting his duty above ideology and substituting for failing private companies a state company? This is not a matter of being left-wing or right-wing; it is a matter of him performing his duties as Secretary of State for Transport, which he is declining to do because, as we heard in the Statement, he wants to make a whole set of cheap points about “private good, public bad”, which I think demean his office and are costing the taxpayer very dearly indeed.

[Baroness Sugg]

I will attempt to answer the questions the noble Lord raises. If I do not manage to answer all of them, I will certainly follow up in writing.

I am afraid that we do not recognise the bailout accusation. As I said, Stagecoach will be held to all its contractual obligations in full. It has returned nearly £1 billion to the taxpayer and resulted in a nearly £200 million loss to the parent company. On the west coast line, it was a direct award and no other bidder was involved. As we stated in December 2016, we set out the plans to award the West Coast Partnership with that direct award. It is a short-term award and there was no other bidder involved. It was put in place before the new West Coast Partnership was awarded. On whether Stagecoach was allowed to bid for continued franchises, as we said, it will bid for the new east Midlands franchise. We are keeping the legal advice on that under review, and we will see what happens in the coming months, but as things stand Stagecoach is bidding for future franchises. The Secretary of State quoted the 2009 NAO report. I will send the noble Lord a copy.

[Lord Adonis]

It is not correct for the noble Baroness to say that National Express was not banned from bidding. It was banned from bidding.