Railways: East Coast Main Line

Lord Davies of Oldham Excerpts

Tuesday 4th June 2013 Lords Chamber

Asked By

[Lord Davies of Oldham]

To ask Her Majesty’s Government whether consideration has been given to extending the management by Directly Operated Railways of the east coast main line franchise.

[Earl Attlee]

My Lords, the Government carefully considered a number of issues before announcing the franchising programme schedule on 26 March. This schedule sees the commencement of a new franchise on the intercity east coast in February 2015. This will return the franchise to the private sector after an extended period of public control, putting in place a long-term partner for the significant investment that the Government will make in the east coast main line in future years.

[Lord Davies of Oldham]

My Lords, I have two questions. Will the noble Earl confirm that his ministerial colleague in the other place got it wrong when he stated that the publicly operated east coast main line returned a lower figure to the Treasury than the privately operated west coast? The 2011-12 figures show the opposite: £156 million was returned to the Treasury from Virgin on the west coast and £177 million was returned from the publicly operated east coast service, so my second question is this: what, apart from political dogma, inspires the Government to propose ending the east coast‘s successful operation?

[Earl Attlee]

My Lords, on the noble Lord’s first question, the short answer is no. During the three years to 2012, the Treasury received £411 million and £450 million from the east coast and west coast rail franchises respectively. This is completely separate from the money that the DfT paid to Virgin Trains as part of the revenue-based risk-sharing mechanism, which by its nature is variable, so the statement that my right honourable friend made is factually accurate. The bottom line is that the plans that we have set out will drive improvements to rail services and put passengers at the heart of a revitalised rail franchising system. It is also important to remember that rail franchises are not directly comparable.

It was never intended for the east coast main line to remain in the public sector. Indeed, when the then Secretary of State, the noble Lord, Lord Adonis, explained in this House in July 2009 the decision to bring the line into public control, he said:

“I do not believe that it would be in the public interest for us to have a nationalised train operating company indefinitely”.—[Official Report, 1/7/09; col. 232.]