Question to the Department for Transport:

To ask Her Majesty's Government, further to the Written Answer by Baroness Sugg on 13 December 2017 (HL3776), what compensation arrangements they have entered into in respect of the early surrender of the Virgin-Stagecoach east coast rail franchise.

As the Secretary of State announced in his statement to the House on 11 January 2018, we are not agreeing to early termination of a contract in 2020 but the franchise is not delivering the profits the operator expected. The Department is preparing contingency plans as we do not believe the franchise will be financially viable through to 2020. The Secretary of State will report back to the House when a decision is made on contingency planning.

It is important to understand that all premiums due to date under the contract have been paid and we currently receive premiums in line with their contractual obligations. From 2020 we intend to commence the East Coast Partnership, one of the first of a new generation of integrated regional rail operations. This will also include appropriate contributions from the new private partner under a long-term competitively procured contract.