East Coast Main Line Franchise

Mary Glindon Excerpts

Thursday 20th June 2013 Commons Chamber

[Mrs Mary Glindon (North Tyneside) (Lab)]

I not only congratulate my hon. Friend the Member for Edinburgh East (Sheila Gilmore) on securing the debate, but thank her for all the hard work that she has done in spearheading the campaign to keep the east coast main line in public ownership.

Like my hon. Friend the Member for Blyth Valley (Mr Campbell), I note that the Chancellor of the Exchequer has said that he wants to balance the books and keep costs down for taxpayers. He therefore needs to have words with the Secretary of State for Transport and his Ministers, because they seem to be oblivious to that fact. While in public ownership, the east coast main line has provided vast sums of money to the coffers. The Office of Rail Regulation has reported that it offers the best value to taxpayers.

I can only reiterate the facts and figures that colleagues have given this afternoon. Directly Operated Railways Ltd has paid back £602 million to the Government in premium payments, which is £232 million more than National Express paid back for the same service and £320 million more than Virgin-Stagecoach has paid back since 2009. The facts speak for themselves. Only 1.2% of East Coast’s income is derived from public subsidy, compared with an average of 32.1% for the private train operating companies. Since 2009, East Coast has reinvested all of its £40 million profit into the service, whereas Virgin, in operating the west coast main line since 1996, has paid nearly half a billion pounds in dividends to its shareholders.

Like many of the MPs here, I use the east coast main line every week. I have used it for leisure purposes since the late ’60s. There are some fantastic places to visit along the line, my favourites being York and Edinburgh, where I have many happy memories. I have seen a number of improvements in the three short years during which I have travelled between Newcastle and King’s Cross as an MP. The trains are punctual for the most part and the staff are always friendly and helpful. Some 80% of the delays that do occur are beyond the control of East Coast. It should be praised for being at fault for so few delays. When trains are delayed, East Coast has a fantastic compensation scheme that refunds the fare. For MPs, that goes back to the taxpayer in lower expenses.

It is possible to get to London from Newcastle in two hours and 40 minutes. That is fantastic for people who are travelling to work and must be lauded. The excellent rewards scheme, which the company initiated, means that there is plenty of opportunity to get free journeys. Again, when that is used by MPs, it means a direct saving to the taxpayer through lower expenses. Could we expect the same from a private operator that had to keep its shareholders happy?

The hon. Member for Harrogate and Knaresborough (Andrew Jones) is right that there has been a rise in the number of passengers using the service. There has been a 59% increase since 1944. However, analysis shows that that is the direct result of a 300% increase in public subsidy to the rail industry. It is also the case that although there has been passenger growth, there has been no corresponding increase in rail’s modal share compared to other forms of transport. The number of people using the trains has not, in effect, changed.

In a recent Westminster Hall initiated by my hon. Friend the Member for Middlesbrough (Andy McDonald), the Minister did not give East Coast any acknowledgement for reinvesting its profits, and he failed to recognise that if it went into private ownership, the cost of upgrading the line and getting new stock would be met through public spending. He could not give a good reason why privatisation was being pushed through ahead of other franchises, as highlighted by my hon. Friend the Member for York Central (Hugh Bayley). An article in The Northern Echo reported how Lord Adonis accused the Department for Transport of attempting to “rig the franchising timetable”, delaying costs for other lines, at a huge cost to taxpayers, in order to put East Coast first. He said:

“East Coast is doing a great job and it should be allowed to get on with it.”

I will conclude by agreeing with Frances O’Grady, the general secretary of the TUC and chair of Action For Rail, who said:

“This decision defies all logic…The government…is not interested in evidence-based policy and is once again putting the interests of private companies and shareholders before those of commuters and taxpayers…This is privatisation for privatisation’s sake, as Ministers steadfastly ignore what is best for the rail industry and the people who work on it and use it.”

I can only agree.