Railways: East Coast Rail Franchise

Lord Hughes of Woodside Excerpts

Tuesday 28th October 2014 Lords Chamber

[Baroness Kramer]

My Lords, the franchise process is in train. The award will come in February, so I obviously cannot comment on the competitors’ offers at this time. That would be entirely improper. It is certainly true that DOR returned profits to the Government—not to the department. It is also important to understand that it has not had the demands that are placed on many franchises in the level of investment required. We will have new equipment coming on to the line and new rolling stock, too. That will mean significant new burdens and we have many greater requirements now in terms of customer service so there is a need for significant investment. That is why a new player needs to come in at this time. It is obviously open to any Government to own companies and use them in various ways. This country used to have an airports industry and ran steel mills and car companies. However, we have found that the franchising system has offered us excellence. Train-operating companies have delivered very good service at very good prices. We have seen the response to that from passengers who have doubled in number in the past 20 years.

[Lord Hughes of Woodside (Lab)]

Can the Minister say why the company currently running the franchise is not being given the opportunity to bid or to test itself against the conditions that the Governments are considering?

[Baroness Kramer]

As I said, the company currently operating this is a government entity. It was designed as a company that could step in when something went wrong. That remains important within the arsenal of our tools. There is a very different set of skills when one is looking at significant new investment and growth. This is the point that we have reached with this franchise, so it is very important that the opportunity is, as I say, open for the train operating companies to bid on this and offer a high-quality service. We will be looking for a very effective winning bidder.