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Should East Coast rail be public or private?

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A Virgin Trains East Coast line service departs at London's Kings Cross
A Virgin Trains East Coast line service departs at London's Kings Cross
Daniel Leal-Olivas/AFP/Getty Images
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A Virgin Trains East Coast line service departs at London's Kings Cross

Failed franchise brought under public ownership for third time in decade

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Thursday, May 17, 2018 - 6:29am

The Government announced yesterday it will temporarily renationalise the beleaguered East Coast rail franchise, once again raising the argument over whether Britain’s trains should be public or privately owned.

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The London to Edinburgh service will be brought back under government control on 24 June, after its private operators Stagecoach and Virgin Trains admitted they could no longer afford to keep running the line.

The Daily Telegraph says the decision is “politically embarrassing for the Government”, which has repeatedly defended the private franchise model for the railways, and “comes amid concern from Tory MPs that Jeremy Corbyn’s call to renationalise the railways is cutting through to the electorate”.

Labour has accused the Government of giving Stagecoach and Virgin a £2bn “bailout” after they failed on the East Coast mainline, while at the same time awarding them contract extensions on the West Coast.

In November, Transport Secretary Chris Grayling announced the East Coast franchise would be terminated three years early, “allowing the operators to avoid up to £2bn in payments until 2023”, reports The Guardian.

It is the third time in a decade a private train operator has failed to see out its contract on the East Coast mainline.

Despite this, Grayling denied it was a “failing railway” and insisted taxpayers had not lost out, claiming “the route continues to generate substantial returns for the Government”.

Addressing the Commons, he also rejected criticism of the rail privatisation model pursued by the successive governments since the 1990s.

“It is vital that we remember the benefits the railway has seen since privatisation,” he said. “Passenger numbers have doubled. New trains with new technology are being rolled out right across the network. Innovation has driven up passenger satisfaction.”

While passenger numbers have increased dramatically, says The Times, “attempts to meet the challenge of extra demand has been thwarted by the limitations of the Victorian network”, with a major multi-billion pound overhaul by Network Rail “having a catastrophic impact on punctuality”.

The paper says it is this, not necessarily the privatisation model, that “is blowing a hole in train companies’ finances and stymying attempts to dramatically improve standards, at least in the short term”.

However, many have pointed to the period between 2009 and 2015, when the line was taken back into public hands, as a time when “passenger satisfaction and profits subsequently improved”, says The Independent.

Mick Whelan, general secretary of the train drivers’ union Aslef, said: “That shows what we have been saying all along – that Britain’s railways should be run, successfully, as a public service, not for private profit. Because they can’t do it. Virgin and Stagecoach have managed reverse alchemy – by turning gold into base metal, and profits into losses on the east coast.”

Weighing up the pros and cons of the private-public debate, The Independent’s travel editor Simon Calder argued: “While re-nationalisation could slice 3% off fares, proponents of privatisation will point to the benefits of competitive tendering on other franchises.”

There are, however, “more important problems to solve” he said, such as cutting costs on the railways to match continental operations, and reforming the commercial anarchy of train fares.

UK News Transport
Chris Grayling Labour Rail privatisation Jeremy Corbyn

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