Mick Cash and I agree about the East Coast bail out: it stinks

by georgehep

I agree with Mick Cash when he says it stinks. The rail union leader was referring to the government’s extraordinary bail out of Virgin Trains franchise for the east coast main line.
I am travelling south on a Virgin train as I write with a complimentary glass of wine waiting for my free lunch to arrive. If you can book well enough in advance, and take advantage of a senior railcard, the first class ticket is very good value. I am not defending the pricing policy. If you have to go to London unexpectedly, the cost of a walk on ticket is extortionate. Fares are much cheaper on the continent.
I have rearranged my journey to take account of the strike on Northern Trains called by the aforementioned Mr Cash, and the disruption to local services as the part of so called Great North Rail Project of major investments in rail infrastructure. There are grand schemes in the Leeds and Manchester areas but all we seem to get is 10 days of disruption to replace warn out points installed 30 years ago which failed 15 times last year.
I enjoy the train ride to London. The trains are usually on time and exciting new trains are promised. The staff are always helpful and smiling. Their uniform changes each time the franchise is passed like a baton in a relay race. I wish I had a business painting railway coaches in the latest livery.
The annual indignation over fare increases took place last week, with protests at Newcastle and a visiting shadow minister handing out leaflets. The Minister of Transport flew off to the sun to drum up trade and avoid answering the criticisms of a 3.4% fare increase on east coast and more elsewhere.
Virgin Trains East Coast is also in trouble for returning the worst punctuality of any train operator at 3.6m hours lost and for sexist behaviour in calling a customer honey, love and pet. It apologised straightaway. But all this pales into insignificance compared to their failure to finish the franchise. Virgin is the third private operator to come off the rails on the east coast route.
You could not make it up. The first franchise was awarded to GNER. The Hatfield crash, caused by Railtrack’s poor maintenance, happened on its watch. I liked GNER’s nod to tradition by adapting the names of the original founding companies and using a traditional livery. The line overbid for the franchise and when the parent company got into financial difficulties in 2006, GNER was stripped of the franchise.
National Express took over in 2007 but in 2009 also admitted defeat which lead the then Transport Secretary, Andrew Adonis, to put the line in public ownership as East Coast Main Line. It returned a £1bn to the Exchequer over the following 6 years and achieved 91% customer satisfaction though critics said it did not invest in new rolling stock.
Einstein said it was madness to repeat the same experiment and expect a different result but nevertheless David Cameron’s government put the line out to tender again and awarded the franchise to a partnership between Stagecoach and Virgin Trains in 2015. ( Stagecoach is the major player by the way not Virgin.)
Last November the Transport Secretary, Chris Grayling, agreed to terminate the franchise in 2020, three years early. The line had been losing money but payments are loaded heavily into the final supposedly profitable years so this let Virgin and Stagecoach off £2bn. Stagecoach shares leapt 12% on the news.
Personally, I am not convinced by Richard Branson’s protests at the weekend that this would never have happened if the infrastructure had been improved as promised and the economy had remained buoyant. There are always ‘leaves on the line’ when it comes to railways.
Tom Watson called on Chris Grayling to resign; Andrew Adonis resigned in protest from a committee most of us had never of whilst skiing in Austria and Mick Cash said that “the government was rigging the market again in favour of the private sector.”
What happens now to the lacklustre line? Chris Grayling calls for a partnership to run the east coast line that will somehow bring the train and rail operators together but the details are desperately vague. It may be a step forward, but Grayling has already made it clear that his friends at Stagecoach will be invited to bid again under the new arrangements.
Just consider the implications for other train franchise holders of the Stagecoach deal. Silly money can be offered to win rail franchises in the certain knowledge that the payments need never be made. There is virtually no risk to the private operator. What a way to run a railway.
Time for full disclosure. My father used to run Mick Cash’s union so I would dearly love to see railways restored to public ownership in my lifetime. But I despair at the way railways have become a political football between competing ideologies. Jeremy Corbyn’s commitment to renationalise as the franchises expire is not thought through. The railway insiders call for a more pragmatic middle way.
In the meantime, Chris Grayling can expect a hard time when his plans are scrutinised by the Public Accounts Committee. If you want to add your voice, sign the petition at weownit.org.uk. for East Coast to be run for public good rather than for private profit.

published in Newcastle Journal on 9th January