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East Coast Main Line

Volume 565: debated on Thursday 27 June 2013

6. What his policy is on the privatisation of east coast main line services; and if he will make a statement. (161769)

This Government’s programme for rail franchising was announced on 26 March. The comprehensive schedule included the intention to return the inter-city east coast franchise to the private sector by February 2015, and that remains our policy.

The east coast main line will have returned £800 million to the Exchequer by the end of this financial year. Are not the Government taking us from a position in which the line subsidises taxpayers to one in which taxpayers, through their fares, will subsidise shareholders?

I am guided by the words of the last Labour Transport Secretary, who said:

“I do not believe that it would be in the public interest for us to have a nationalised train operating company indefinitely…because of our recent experience of rail franchising”.—[Official Report, House of Lords, 1 July 2009; Vol. 712, c. 232.]

He said that when he held the job that I hold now, and I think he was right.

The east coast main line has benefited from major improvements over the last 20 years. Will my right hon. Friend assure me that the Government will not neglect the need for future investment in that important route, notwithstanding the huge amounts of money that are being sucked into the doomed HS2 project?

Huge investments are being made in the east coast and, indeed, a number of other railway lines. Our package of rail investments between 2014 and 2019 will lead to the largest-ever electrification on our railways. The Chancellor confirmed that and further investment in the railways yesterday.

I refer the House to my entry in the Register of Members’ Financial Interests.

I support the HS2 project, but because that network will not extend to the north-east of England, there will still be a need for investment in the east coast main line. One option, under the intercity express programme, is the building of a further 270 carriages at the Hitachi factory in Newton Aycliffe. Will the Secretary of State agree to that? It would constitute an investment in sustainable jobs, and an investment in the long and proud tradition of train building in the United Kingdom.

I welcome Hitachi’s investment at the Newton Aycliffe site, following a £4.9 billion contract that it has already won for refurbishment of IEP trains. The Department is currently considering other proposals. Huge investment is being made in all our railways, partly as a result of the huge increase in the number of people who use them.

Q12. During a debate in the House last Thursday, the Minister of State acknowledged that investment in infrastructure and rolling stock for East Coast would be financed by the taxpayer, but that there would also be some private investment. Perhaps— (161775)

Order. We do not need these constant sedentary interventions from the Minister of State. The message is clear and simple: be quiet, man.

I simply say to the hon. Lady: look at what has happened since privatisation—and, indeed, all the current franchises in operation were let by the last Government.

At the previous Transport questions the Minister of State said on East Coast that

“the involvement of the private sector means that we can increase, over and above the taxpayers’ money, the money that can be invested”.—[Official Report, 25 April 2013; Vol. 561, c. 995.]

Yet he has now admitted to me in a letter that the investment

“comes from an increase in the value of Network Rail’s regulatory asset base”,

and he says

“it is through private sector operation that we can best realise the benefits of the planned investment.”

Why does the Secretary of State not now just admit to the House that his Minister was wrong?

No, what my right hon. Friend said was absolutely correct. We are seeing huge investment in the railways and, as I said just a few moments ago, all the franchises currently in operation were let, and endorsed, by the last Government.

The fact is that the Secretary of State’s policy does not bring in any additional investment and is costing taxpayers, with millions of pounds paid to train companies to extend contracts so we can focus on East Coast. He claimed West Coast is paying more money back to the taxpayer than East Coast: it is not. He said Lord Adonis backs his plans: he does not. He says they are vital to bring in investment: they are not. Is it not the case that, one by one, his arguments for this costly and unnecessary privatisation have fallen away?

It is wrong to draw direct comparisons between one company and another. East Coast uses older rolling stock, which is cheaper to rent than the Pendolinos used by West Coast, so I do not acknowledge what the hon. Lady says. What I do acknowledge is that there has been huge growth in the railway industry since privatisation. That has been brought about in the main by competition between the different rail-operating companies—something that the last Government endorsed throughout the entire 13 years when they had the power to change any of these things.