Rail Franchising

Part of NHS Winter Crisis – in the House of Commons at 6:31 pm on 10th January 2018.

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Photo of Liz Twist Liz Twist Labour, Blaydon 6:31 pm, 10th January 2018

In my constituency of Blaydon, as elsewhere in the north-east, the future of our railways is of great interest. We have our own experience in our region, with the example of a directly operated railway on the east coast main line. That service was taken under public control following the failure of two contracts in 2009. My constituents and others, including hon. Members in the Chamber, were out there campaigning to retain the east coast main line in public ownership. Not only have the trains provided a good service, but the company has returned £1 billion of premiums to the public purse. That is why it was, and still is, galling for so many people in the north-east that the franchise was re-privatised in 2015 on the basis that that represented “best value” for rail users and taxpayers.

No wonder so many of my constituents expressed disbelief at the Secretary of State again looking to tear up the contract and at the current franchisees—Stagecoach and Virgin, which are known to be struggling to make their anticipated profit—being allowed to walk away from their commitment to make payments worth more than £2 billion under the current contract. It is therefore hardly surprising that folk in the north-east are enthusiastic about Labour’s commitment to take back rail franchises as they expire. Rail franchising has proved ineffective and costly, encouraging bidders to submit over-optimistic and unrealistic bids. It is about time we looked at bringing rail back into public ownership so that we get the best possible value and the best possible service for passengers from their rail services.

I want to refer to the National Audit Office report that was published this morning and the Secretary of State’s response to it—blaming the trade unions. The Government set the contract terms and specifications for franchises. The Government say, “You don’t need a second guard on trains.” They bear responsibility for the problems in the rail industry and the industrial disputes that we face.