East Coast Main Line Franchise

Ronnie Campbell Excerpts

Thursday 20th June 2013 Commons Chamber

[Mr Ronnie Campbell (Blyth Valley) (Lab)]

I understand there was a good debate in Westminster Hall—it is a pity I missed it. I had to be away, but I am here today, and if the Minister cannot understand Geordie I will try to speak in plain English—he does not seem to be listening to anybody on the Geordie side anyway. I will be very slow so that he can understand exactly what I am saying.

My hon. Friend—he is a friend of mine and I have known him for a long time in the House—the Member for Peterborough (Mr Jackson) made some valid points at the beginning of his contribution, but he got a bit sluggish. I want to get to the bones of the issue. I will not go on, because I know other Members want to speak, but we must get to the bones of this, and we have to know why.

If we look back, Great North Eastern Railway was a good firm; it tried but got unstuck with that container thing and there was a bit of a mess, but in all fairness it walked away, threw the keys on the line and another private company went off the rails with the north east rail link. Then we had National Express, which was hopeless. It should have stuck with what it is good at, although I do not think it is very good at driving buses either. It came in and made a right mess of things.

All we have to do—I do not know whether the Minister knows this, but we do—is talk to the workers on the trains. They will say which the bad company was: National Express. The workers are happy now. Last week they told me that they are happy with the not-for-profit system. I will not say nationalisation—I wouldn’t dare!—it is a not-for-profit company. They are happy. I said, “Don’t say that. If the Minister hears you’re happy, that’ll be the excuse he wants to privatise it. You canna have workers being happy, can we? Even the management is happy, and we canna have them being happy neither.” So I told the workers not to say they were happy too regularly, as that will be an excuse for the Tories to do it in—[Interruption.] The Minister may laugh, but let us put the facts down. National Express lost the taxpayer £55 million. I am not sure of the figure for GNER, but I am sure it was some—I do not know what it was, but it was taxpayers’ money.

Week after week I hear the Tories come to the Dispatch Box and start talking about how they are the custodians of the taxpayer. “We believe in the taxpayer. We are here to save them money.” Well, I have to laugh. We now have a not-for-profit company that has made the taxpayer £600 million in four years and invested £40 million in itself. What is wrong with making a profit and putting it back into the Treasury coffers for the taxpayer? The Government are the custodians of the taxpayer and are saving them money by cutting welfare, hospitals, legal aid and everything else—that is what they tell everybody in the newspapers and on television. The Government are saving the taxpayer. There are also the tax alliance people, the hidden people, who I think are backed by the Tories—the tax alliance party, or whatever it is. [Hon. Members: “The TaxPayers Alliance”] The TaxPayers Alliance. I have not heard a squeak out of it yet. I have never heard it say, “Oh wait a minute. The taxpayer is getting money back, and the Treasury fund this company. This must be good for taxpayers.” No, it is keeping very quiet. I wonder why.

My second point is about why we want to privatise a not-for-profit company that is doing very well. I have an idea—actually, I have a few ideas. My mind works in funny ways. I know the Tory party slush bucket is going around somewhere and I wonder who is contributing to it. I would like to try to find out, get my sniffer dogs on it and look to see who is putting into the Tory slush bucket. We will find out later, when the names come out, who will get the franchise—[Interruption.] Well, I will put my money on now, and I bet it is Goody Two-Shoes. I bet he gets the franchise.

Hon. Members: “Who’s Goody Two-Shoes?” He’s Branson, that’s who. He’ll be the man who puts the money in the slush bucket, and he’ll be the man who the Tories get to run north-east rail. That is a fact, and I hope that people will remember what I have said.

As I have said before, the company has contributed £600 million to the taxpayer, to the Treasury. Its subsidy from the taxpayer was 1% for various items and things it did on the east coast main line, as against the west coast main line, which gets a subsidy of 37%. Hon. Members can see the difference, and perhaps they can see why Branson might have an eye on the east coast main line, because although he made a mess of the west coast main line, the Tories made a mess of the franchise for him, so they had to give it to him again. He will have his eye on this company and he will want to run it to get that money.

When something is privatised, the money has got to go somewhere. The company makes money. It has shown how to run a rail link, and it has shown companies how to do it, and I am sure Branson knows that, and he will be saying, “Ooh, there’s £600 million. My shareholders are going to be very happy. Instead of that money going to the Treasury, it could go to the shareholders in business.” I can see how he is thinking and I can see how the Tories are thinking. They are saying, “Hey, we’ve got a company here making money for the taxpayer. It should be the shareholders getting the dividends and the managers getting massive bonuses.” I can see them coming in with their massive bonuses and the money just draining away, and they’ll most probably throw the keys on the line again and say, “Sorry, we’ve made a mess of this. We took too much money out. You’ll have to get the taxpayer to bail it out again, with another not-for-profit company.” I expect that to happen in a few years. I’ll most probably not be here, but never mind—I’ll be watching from my granddad seat.

The Minister has got to be listening carefully to what the people are saying. This is important. We hear what they are saying, and they are saying they want the company to remain as it is. They are satisfied with the line. I travel on it every week, like most other Members from the north-east of England and Scotland, and it is a very good line. It is always on time. Very rarely, there will be a couple of minutes here, a couple of minutes there, and of course sometimes something happens on the line, as happens on all rail lines—a tree might fall down or a line might go down. It happens from time to time. Those things cannot be helped. But what is more important is that the workers are very happy, the company is doing well and contributing, and I think it is an absolute disgrace if we give this back to the private entrepreneurs, who, let’s face it, made a mess of it in the first place.

--- Later in debate ---

[Grahame M. Morris]

I suspect the Minister may be able to clarify the criteria, but judging by the answer he gave my hon. Friend the Member for Islington North, I suspect that will not be the case. Past performance does not seem to be an impediment, although perhaps it should be—and perhaps the Minister will take more notice of such a suggestion from his own side.

Whether in the public or private sector, companies that fail to deliver on their commitments or promises to the taxpayer should not be allowed to take over franchises that they have shown they are not competent to run. It is not that National Express failed on one franchise and is bidding for another; it has already failed to deliver on the east coast line.

The public understandably have concerns about the Government position in relation to this matter, and they must not reward failure. If the Minister goes ahead with the privatisation, how will he guarantee that any future operator awarded the east coast main line franchise will be able to fulfil its contract, and what assurances can he provide that the taxpayer will see a similar rate of return in respect of premium payments as they received from Directly Operated Railways? It has been said that DOR is a not-for-profit service, but that is not quite true, as it is hugely profitable, but all the profits go to the taxpayer. That is the position, and I am sure various private train operating companies would relish getting their hands on that level of turnover.

[Mr Ronnie Campbell]

I wonder who.

[Grahame M. Morris]

Yes, we can speculate about who might take on the franchise, but it is incredibly profitable and I am sure there will be no shortage of takers. That money should be going into the Treasury at this time of austerity, however.

--- Later in debate ---

[The Minister of State, Department for Transport (Mr Simon Burns)]

I, too, begin by congratulating the hon. Members for Edinburgh East (Sheila Gilmore) and for City of Durham (Roberta Blackman-Woods) on securing the debate. It is clearly a topic that arouses considerable interest, as has been seen in hon. Members’ speeches. I suspect that the policies advocated by the Greek chorus on one part of the Opposition Benches vary somewhat from the policies of the hon. Member for Nottingham South (Lilian Greenwood) on another part of the those Benches.

I particularly enjoyed the thoughtful speeches of my hon. Friends the Members for Peterborough (Mr Jackson) and for Harrogate and Knaresborough (Andrew Jones), and there was an interesting speech from the hon. Member for Argyll and Bute (Mr Reid), but I gently remind him that it is this Conservative and Liberal Democrat coalition Government—and not simply the Liberal Democrats—who are making such record investments in our rail infrastructure.

As usual, I listened with considerable care and interest to the extremely thoughtful speech of the hon. Member for York Central (Hugh Bayley), who raised a number of issues. First, he asked whether the headquarters would be in York. I understand why he did so: the issue is important to him, because York is his constituency. Obviously we would not expect to specify the location of the headquarters in any future franchise proposals, but there is nothing to prevent the new franchise company from choosing to locate its headquarters in York, especially given the current precedent.

The hon. Gentleman sought to tempt me down another route, asking for an independent commission to be set up to establish whether passengers wanted services to be taken away from Directly Operated Railways. I am afraid that I must disappoint him. I will not be tempted on to the wayside. We have no plans to set up any such commission, although perhaps I can give him some consolation. We are working with the independent body Passenger Focus to ensure that we understand what passengers, on the basis of their own experiences, want from their rail service, and that will influence any proposals that emerge from the franchise process.

The hon. Members for Middlesbrough (Andy McDonald), for Easington (Grahame M. Morris), for Livingston (Graeme Morrice), for Gateshead (Ian Mearns) and for Blyth Valley (Mr Campbell) all made their customary contributions. I am afraid that, while their delivery may have gained in rapidity, theirs is a message that I have heard many times before. I am sorry that they are not on message in relation to their hon. Friend the hon. Member for Nottingham South (Lilian Greenwood). I think it would be fair to say—they will be proud of this—that they would like an outright renationalisation of the whole railway system.

[Mr Ronnie Campbell]

I never said that.

[Mr Burns]

No, but I think that that conclusion could be drawn from what the hon. Gentleman has said. [Interruption.] He is being a little too coy now. We do know his history; he does have form. I do not think that even the hon. Member for Nottingham South is advocating an outright renationalisation.

The debate is so important, and of so much interest to so many people, because the east coast franchise serves so many communities and businesses, and helps to drive the economy along the length of the country, from London in the south to Aberdeen and Inverness in Scotland. I am grateful for my second opportunity in less than three weeks to discuss the franchise. We needed to revisit the issue today because Members felt that, given the high level of interest, the last debate—which was restricted to one and a half hours—was not long enough.

It is clear that the inter-city coast franchise is a valuable one. That, in my view, is a major part of why it should be returned to the private sector as soon as possible, as was originally envisaged by Lord Adonis when he brought it into temporary public ownership as Secretary of State in 2009. He said—I am repeating this for a reason—

“I do not believe that it would be in the public interest for us to have a nationalised train operating company indefinitely.”—[Official Report, House of Lords, 1 July 2009; Vol. 712, c. 232.]

The work that has been done on the east coast franchise in the last three and a half years of public ownership, to which many Members have rightly referred, will allow an operator from the private sector to apply its own skills and innovative thinking to building long-term value for both the taxpayer and passengers on the route. I was informed during the Westminster Hall debate two weeks ago that Lord Adonis had changed his views on the ownership of the franchise, but I have not, and the Government have not. We remain committed to obtaining, for east coast passengers and for the taxpayer, the great benefits of franchising that we have seen since privatisation.

I think it is very interesting that the noble Lord and the right hon. Member for Tooting (Sadiq Khan), along with the shadow Secretary of State, put out a press release this morning in advance of the debate. I would love to know the date of the telephone conversation the hon. Member for Nottingham South had with Lord Adonis when he told her he had changed his mind. I would be very grateful if she would intervene and tell me. [Interruption.] She says that she had a telephone conversation—[Interruption.] She said she never had one?

--- Later in debate ---

[Mr Burns]

Absolutely, and doing so will also help answer the points made by the hon. Member for Livingston. The Government are investing significantly in the east coast main line because its infrastructure needs to be improved and enhanced, but Governments are not awash with unlimited amounts of money. We are more ambitious for the east coast main line, and we believe from the experience of other franchisees that they are prepared to invest their money as well, to build on the investment that the Government provide, through Network Rail and other sources, to ensure that there is more investment in improving services for passengers, which is the key aim. That is why this Government are making record amounts of investment in infrastructure, amounting to billions and billions of pounds; such is our commitment to improving passenger services.

[Mr Ronnie Campbell]

Will the Minister give way?

[Mr Burns]

No, because I am running out of time.

Part of the success of franchising comes from having both a private sector that is willing and able to invest and manage risks and a Government who have the ability to step in, in the short term, to ensure the continued service of the railways in the event of a franchise failure. While we do everything we can to avoid such failure, we must be in a position to step in so that there is a continuation of service if a franchisee were to get into trouble, as happened with National Express on the east coast main line in 2009. That is the whole purpose of DOR. It is not a company like other companies providing franchise services within the rail network. It is there as a company of last resort in an emergency to ensure continuity of service under the Railways Acts. This should never be considered a long-term solution, and it is not an alternative model to franchising. Many Members totally misunderstood or did not get that point. This is fundamental: DOR is not an alternative model to franchising. We firmly believe that the private sector is best placed to deliver the best value for the passenger and taxpayer, and DOR allows us to make that choice.