West Coast Rail Franchise

Maria Eagle Excerpts

Thursday 6th December 2012 Commons Chamber

[Maria Eagle (Garston and Halewood) (Lab)]

First, may I thank the Secretary of State for early sight of his statement and the report?

The Secretary of State conceded to the Transport Committee that what had been uncovered even in the Laidlaw inquiry interim report was “damning”. It is, indeed, damning, and the final report is even more so.

For all the efforts by the Government in briefing after briefing to pin the blame on just three civil servants and to hide behind an internal human resources process, the results of which will never be made public, some things are very clear. It was decisions and failures by Ministers that led to the collapse of rail franchising, at huge cost to the taxpayer. The Laidlaw report is clear. It was Ministers who decided to change franchising policy; they decided not just to move to longer franchises, but to replace a revenue-risk sharing mechanism that had worked for many years with a complex new model requiring a best guess at GDP 15 years ahead. It was Ministers who oversaw a bizarre structural reorganisation of the Department that left no one in charge of rail. The Secretary of State has now said he will reverse that—finally, we have an acceptance of ministerial responsibility. It was Ministers who chose to axe more than a third of the staff at the Department in a year, with little thought for the consequences of the loss of expertise. And it was Ministers who axed external audits, removing quality assurance from the process. These were deliberate decisions taken by this incompetent Government.

It was also Ministers who failed to act when warning after warning was flagged up to them as this franchise unravelled. Why did alarm bells not ring at the fact that this process had not one but three senior responsible owners? It is not surprising that the Laidlaw report proposes just one in future—that is the whole purpose of a senior responsible owner. Does the Secretary of State not accept that Ministers have an obligation to ask questions and not just rely on what they are being told, not least when they are spending hundreds of millions of pounds of taxpayers’ money? It is clear from this report that they failed completely in their responsibility to do that.

The Secretary of State must now give taxpayers and fare payers some straight answers. First, has he received clear legal advice that will reassure taxpayers that he has not left the Department open to legal challenge as a result of his decision to hand out a two-year contract with no competition? Secondly, are reports correct that he has agreed a quid pro quo deal with First, whereby it will be granted an extension on its First Great Western franchise on a similar basis? Thirdly, the Government expected to receive tens of millions of pounds in dividend payments over the next two years from the west coast franchise and would have received more than £800 million from the great western franchise had First not exercised its right not to extend that contract—can the Secretary of State confirm that, under the management contracts he has been forced into, taxpayers will receive none of those payments? Fourthly, the terms of the deal that has been struck with Virgin allow the margin of 1% on revenue agreed for the first year to rise for the second—by how much could it rise and at what cost to the taxpayer? Finally, will the Secretary of State now come clean with the House on the full cost to taxpayers of the collapse of the Government’s franchising programme? There are media reports from the industry that the final cost could run into not tens of millions but hundreds of millions of pounds. Will he tell the House, taxpayers and fare payers what figure he has been given by his officials?

Despite all the Secretary of State’s efforts, no one is going to fall for the Government’s attempt to wriggle off the hook and evade responsibility for this shambles. They can devise a complex process of multiple reviews, they can hide behind confidentiality and legal privilege, and they can reshuffle Ministers as many times as they like, but the truth is that when commuters go back to work in the new year and find that their fares have gone up by as much as 6% above inflation they will know that it was Ministers from this incompetent Government who, instead of imposing a strict cap on fare rises, blew taxpayers’ money on this franchise fiasco.