Transport Secretary: East Coast Franchise

Rachael Maskell Excerpts

Wednesday 23rd May 2018 Commons Chamber

[Rachael Maskell (York Central) (Lab/Co-op)]

Let us get things straight. Who runs the Department for Transport? Who makes the decision about who runs our railways? Is it the private operators? Is the Secretary of State completely under their control? Is it the officials? Has the Secretary of State completely abdicated his responsibilities and placed them in the hands of civil servants? Perhaps it is the Secretary of State. Of course the buck stops with the Secretary of State. He has the final say. It is his stroke of the pen that decides what happens. The fact is that the Secretary of State has more centralised control than we have witnessed for many, many years. He interferes with work programmes according to his political preferences and he certainly has the final say on all that happens in his Department.

It was, therefore, the Secretary of State who set out the franchising process for the east coast main line. It was the Secretary of State who had responsibility for the content of the franchise. It was the Secretary of State who had the ultimate responsibility to review the east coast main line bids. It was the Secretary of State who would have carried out the due diligence over the bids. It was the Secretary of State who would have determined whether a bid could be delivered. It was the Secretary of State who would have awarded the franchise. It was, of course, the Secretary of State who had the responsibility for managing the franchise ever since.

There is no point passing the buck to some rail operator. There is no point blaming officials. The Secretary of State is 100% responsible for every failed franchise. The Secretary of State therefore bears responsibility for the £2 billion black hole in his accounts created through the termination of the contract with Stagecoach-Virgin. It is now this Secretary of State who is responsible for nationalising the east coast main line. The hon. Member for Elmet and Rothwell (Alec Shelbrooke) mentioned Access for All funding; it is the Secretary of State who has cut £50 million out of the Access for All funding.

Labour is delighted that our desire to nationalise the railway is making so much sense to the Secretary of State. Before we come back into power, he has taken our policy to put rail back under public control, such was its success when Labour did that in 2009 on the east coast, putting £1 billion back into the hands of the Treasury. Unfortunately, the east coast main line will still not be under public ownership: private companies Ernst and Young, Arup and SNC-Lavalin will be taking over its operation.

I have to say to the Secretary of State that passengers up and down the east coast are saying no more franchising, and no more privatisation or privatisation dressed up as some obscure partnership. No. They are saying: keep it in public hands. As my hon. Friend the Member for Easington (Grahame Morris) said, 70% of the public are demanding that rail be put under public ownership. Labour will honour that demand. My hon. Friend the Member for Cambridge (Daniel Zeichner) highlighted how it was not just his but his constituents’ desire to see rail taken back in the interests of the public.

[Alec Shelbrooke]

Will the hon. Lady give way?

[Rachael Maskell]

I will make some progress now and see how the time goes.

I thank my hon. Friends for their contributions in holding the Secretary of State to account: my hon. Friends the Members for Bishop Auckland (Helen Goodman), for Darlington (Jenny Chapman), for Blaydon (Liz Twist), for Leeds West (Rachel Reeves), for Nottingham South (Lilian Greenwood), for North Durham (Mr Jones), for Gateshead (Ian Mearns), for Jarrow (Mr Hepburn), for Blyth Valley (Mr Campbell) and for Weaver Vale (Mike Amesbury). My hon. Friend the Member for Newcastle upon Tyne Central (Chi Onwurah) used her business experience and expertise to analyse the reality of the Secretary of State’s failed franchising model and found him wanting. My hon. Friend the Member for Dewsbury (Paula Sherriff) was right about the Secretary of State’s readiness to, as she put it, bail out their rich pals no matter how badly their business is doing. My hon. Friend the Member for Leeds North West (Alex Sobel) provided a reality check to the Government’s approach, saying that it was more likely to be found on platform nine and three quarters. He was absolutely spot on when he highlighted the loss of the east coast reward scheme.

[Alec Shelbrooke]

Will the hon. Lady give way?

[Rachael Maskell]

As I say, I am going to see how time progresses.

I question why the Secretary of State has waited so long. Having registered the LNER name back in March this year, it is clear that nearly two months have passed with him withholding information from the public about the level of failure and his intention to nationalise the line. Perhaps he could not say, “Nationalisation”.

I do not want Stagecoach or Virgin to feel that they are off the hook either. While fully exploiting the Tory privatisation of the Railways Act 1993, let us be clear that the track record of companies such as Virgin is to drive profit out of the public purse—out of the pockets of taxpayers. Virgin has been particularly astute in the way that it has used litigation to sue the state over contract failure. It is the financial model of Virgin to do so, no matter the line of business, and look at how it has used that to win the lucrative contract on the west coast.

Can the Secretary of State guarantee that there are no mechanisms that Virgin or Stagecoach can use to take out litigation against him or his Department in the light of this abject failure, and can he further guarantee that he will disqualify them from applying for any future transport contracts? Further, can the Secretary of State report to the House how much this abject failure on the east coast main line has cost the taxpayer? Just three years after the east coast line was ripped out of public hands, time and resources have been spent—public money—on this failed, ideologically driven project.

From my discussions with Network Rail and Virgin—

[Alec Shelbrooke]

Will the hon. Lady give way?

[Rachael Maskell]

I said I would give way if there is time at the end. From my discussions with Network Rail and Virgin Trains East Coast, it is evident that the Secretary of State’s Department, and therefore the Secretary of State, failed in the process of drawing up the franchise—failed to discuss the infrastructure upgrade, scheduling and deliverability with Network Rail when its budgets were evidently under strain. So we had one part of his Department cutting back while the other part of the Department was signing agreements to the contrary, agreeing things that would never be delivered. How did the Government let this happen? I have heard that from both Network Rail and the rail operator, so I know it to be true.

We know that there are around another four franchises that are on the brink of collapse. Will the Secretary of State therefore come to this House and make a statement on each of these contracts and bring these immediately back under public control? He has a responsibility to militate against the future failure of our vital public services, so will he take action now to avoid failure and to ensure that our rail is safely and smoothly transferred into his operator of last resort?

[Alec Shelbrooke]

I am most grateful to the hon. Lady for giving way. Will she now clarify from the Dispatch Box that in order to nationalise the railways, it is Labour’s specific policy not to be a member of the single market?

[Rachael Maskell]

I can make it absolutely clear to the hon. Gentleman that the French railway system and the German railway system have trains in national ownership, not only in their country, but in our country, too.

Right across the country, it is crystal clear that this Government’s transport policies daily fail the public. They charge more and more for the public to use the trains while signing dodgy deals to enable private companies and even foreign Governments to suck money out of our railways; and they waste money on livery and uniforms, as we have heard in today’s debate. I must put on record that it is the staff who are at the heart of the constant change, and we thank them for their endurance through this process.

Labour would put that money back into our trains, back into upgrades, back into building our public services and therefore back into our economy. Today’s debate has clearly demonstrated that the Secretary of State has completely failed this nation and has completely failed our railways. It is time for a new Secretary of State, and my hon. Friend the Member for Middlesbrough (Andy McDonald) is ready to take our rail back and get our nation back on track. Labour will rescue and generate our rail service once again.