United Kingdom to renationalise East Coast train line

OpinionLNER It's about time we started paying into our own railways Jack Peat

OpinionLNER It's about time we started paying into our own railways Jack Peat

Calls for the East Coast Main Line to be re-nationalised have finally been met by the government after it announced the route is to be stripped from Virgin and Stagecoach.

Virgin Trains East Coast - a joint venture between Stagecoach (90%) and Virgin (10%) - was awarded the franchise to run trains for eight years in 2014.

Grayling insisted the government's decision to take control of the franchise "was not because the route is failing". It is not a failing railway.

Stagecoach and Virgin Trains got their bid wrong and they are now paying the price.

Q&A Does the East Coast renationalisation mark a change in direction for rail policy?

Transport Secretary Chris Grayling is expected to make a statement to parliament shortly. Stating that the new partnership would be "in the long-term interests of passengers", Grayling said: "It is vital that we remember the benefits the railway has seen since privatization". However, several train companies face similar struggles to Stagecoach and Virgin after overbidding for franchises and events may yet force his hand again.

It's not the plan, but it's possible.

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So who will now run the trains?

A number of fallacies are being peddled in the wake of the Department for Transport's decision to take direct control of operations on the East Coast Main Line.

What these people have not been saying, understandably enough in view of their support for renationalisation, is that investment in the service under DOR was lower than it has been under Virgin Trains.

In the short term, little or none. New trains with new technology are being rolled out right across the network.

How much will it cost the public?

Virgin Trains East Coast's contract will be ended on June 24. He said the service's most successful period had come under public ownershi until it was "cynically reprivatised".

On the face of it, the government will lose the remaining £2.3bn of the £3.3bn promised by the franchise.

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Labour's transport spokesman, Andy McDonald, said the government was seeking to create a "smokescreen" by touting closer state-corporate ties and that the proposal does not amount to nationalization.

"My key issue around this, because it is a United Kingdom government franchise, as opposed the Scottish taxpayers affected, is that there is no diminution in that service, but I am in some respects agnostic to which of the options we go down".

"That is an insult to passengers and hard-work rail staff, not to mention potentially damaging to Scotland's economy". "[The Conservatives] are defending a broken system at the passengers expense". She said the committee would be examining the latest failure.

The original franchise was signed in 2015 but poor passenger numbers and revenues meant heavy losses for the partnership - some £200 million.

Stagecoach Group Chief Executive Martin Griffiths said that while the company was "surprised and disappointed" at the government's decision not to allow it to continue running the ICED franchise under a revised contractual arrangement, it "respected" the decision. Supporters claim it saves the taxpayer money in the long run, and improves customer service and reliability.

The Department for Transport has terminated Virgin Trains East Coast's contract for the train line which runs between London and Edinburgh.

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