West Coast Main Line

Maria Eagle Excerpts

Monday 29th October 2012 Commons Chamber

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

I thank the right hon. Gentleman for early sight of his statement—it was a good job I had my mobile phone with me so that I could read it. I welcome his willingness to come to the House and his stated intention to be transparent, which I hope will translate into actual transparency.

However the Secretary of State spins it, the truth is that this is a franchise fiasco with not one but four Cabinet Ministers’ fingerprints all over it. Who designed the new franchising policy, building significantly greater risk into the process? It was the Secretary of State for Northern Ireland. Who reduced the Department’s capability to manage major contracts by cutting a third of the staff, including the directors of procurement, rail strategy and rail contracts? It was the Secretary of State for Defence. Who decided not to bother with an external audit, turning a saving of thousands into a cost of tens of millions, then delegated the entire process to her junior Minister and then failed to act on warning after warning about flaws in the process? It was the Secretary of State for International Development. And who declared himself satisfied with the whole process before the Transport Committee, despite the growing evidence that something had gone badly wrong, and then added to the chaos in the franchising system by replacing the costs of one competition with the costs of three? It was the current Secretary of State. This is a shambles involving not one but four members of the Prime Minister’s Cabinet, and it is about time they took responsibility for it instead of blaming officials.

After his last statement to the House, the Secretary of State failed to answer a single question I put to him, so perhaps today, in the interests of transparency, he can manage to give answers to five questions. The first relates to what Ministers knew and when. We know that his Department received a detailed report by Europa Partners five days before awarding the contract. Its author has said that a proper risk analysis was not at the centre of the appraisal. Can the Secretary of State now confirm that at least one bidder warned the Department of errors as far back as May 2011, with one executive telling the Financial Times:

“The spreadsheet contained certain assumptions that looked odd to our economic modellers, so we went back to the department and pointed it out”?

Again, why did Ministers not act on that warning? Can the Secretary of State tell the House who the senior responsible owner for this project was in his Department?

Secondly, on the cost to taxpayers, the Secretary of State doggedly sticks to his figure of £40 million, yet we know that that is just the cost of compensating the four west coast bidders. It does not include the cost of re-running the competition twice, of compensating bidders for the other stalled franchises or of preparing Directly Operated Railways to step in. So what assessment has he been given of the final cost of this Cabinet ministerial failure? How accurate are reports of a final figure of well over £100 million?

Thirdly, on his Department’s external advice, the Secretary of State has admitted in parliamentary answers that his Department paid £491,000 to Eversheds and £439,000 to WS Atkins for advice during the west coast tender process. Can he confirm whether those are the total amounts paid? What steps is he taking to secure a refund for taxpayers for any mistakes that may have contributed to this fiasco?

Fourthly, on the legal advice that the Secretary of State has received, what is his Department’s liability if the participants in any of these cancelled or stalled franchises take action against the Government? What advice did he receive on procurement and EU competition law before deciding to extend Virgin’s contract? What will be the cost of Virgin’s interim operation of the west coast main line until he can get to the first of the next two competitions?

Finally, on the review itself, does the Secretary of State not think it is extraordinary for his Minister of State to insist, in a parliamentary answer, that the Department for Transport board has no responsibility for this fiasco because it was delegated to one of its sub-committees? Surely the board is responsible for its own sub-committee. It is precisely this wriggling that makes people suspicious about the nature of this review. Will the Secretary of State, even at this late stage, think again and allow a genuinely independent review that can look at the role of the Department for Transport board and of Ministers?

The Secretary of State’s attempt to bury his franchise policy at midnight failed to cover up this nightmare on Marsham street that has rapidly become a nightmare for Downing street. Does the Secretary of State agree that

“Ministers must take responsibility for serious or systematic performance failures...flawed policy and poor design...Ministers must not be allowed to shuffle off responsibility”?

Those are not my words, but those of the Prime Minister. This is not just a faulty process; it is a faulty Government. It is time that the Prime Minister listened to his own words, followed his own advice and insisted on his Cabinet finally taking some responsibility for this franchise fiasco.