RMT calls for Grayling to go and an end to the shameful fiasco of rail privatisation
The government may be forced into taking over the East Coast Mainline after admitting the Virgin-branded franchise was about to collapse.
Earlier this month hapless Transport Secretary Chris Grayling told MPs that Stagecoach, which operates the line in conjunction with Virgin Trains, was incurring “significant losses” and would not be able to continue the franchise for more than a few months.
Incredibly, despite Stagecoach’s financial failings, Mr Grayling said that the company would still be considered for future franchises.
“The Department has concluded that there are no adequate legal grounds to restrict it from bidding on current and future franchise competitions,” he said, adding that the company had already been shortlisted for operating another franchise in the East Midlands.
Mr Grayling has already allowed Stagecoach and Virgin Trains to end their franchise three years early in order to escape large payments to the taxpayer– a decision that is being investigated by the National Audit Office.
He has also confirmed that the Virgin-run West Coast franchise would handed a competition-free sweetheart extension to March 2020.
Giving a statement to MPs, Mr Grayling said that the situation on the East Coast was more urgent than previously thought.
“I have already informed the House that the franchise will in due course run out of money and will not last until 2020, but it has now been confirmed that the situation is much more urgent.
“It is now clear that this franchise will only be able to continue in its current form for a matter of a very small number of months and no more,” he said.
The government has already notified Stagecoach that the company had breached a “key franchise covenant” and would not be bailed out.
“Stagecoach got its numbers wrong, it overbid and it is now paying the price”, he said.
Mr Grayling said that his department would now assess the best options for who should take over and one option would see Stagecoach continue to operate the line, “under a very strictly-designed, short-term arrangement”.
RMT general secretary Mick Cash said that the shameful fiasco on one of Britain’s main rail routes needed to end.
“RMT warned that taking the East Coast lines out of the hands of the successful public sector operation and handing them back to the private speculators and spivs was a disaster in the making and we have been proved right.
“East Coast should be renationalised with immediate effect and the scale of the scandal unveiled today should mark the point at which the whole rotten business of rail privatisation in Britain was called to a halt.
“RMT is demanding immediate assurances that the thousands of rail workers caught in the crossfire of this chaos will have their jobs and working conditions fully protected and underwritten.
“Chris Grayling and the Tory government have turned transport in Britain, the nation that gave the railways to the world, into a global laughing stock.
“He is a specialist in failure of the highest order and should resign,” he said.
Labour’s Shadow Transport Secretary Andy McDonald joined calls for the railways to be renationalised saying: “A Labour government will bring in a railway for the people and the businesses it is intended to serve, and put an end to this appalling, profiteering racket.
“The announcement today is yet another monumental misjudgement to add to a growing list of miscalculations by this Secretary of State.
“It’s increasingly clear that he doesn’t care about taxpayers, rail passengers or the rail industry itself, but he’ll do everything in his power to protect and support Virgin, Stagecoach and their ilk and the failed franchise system.
“The bailout culture at the Department for Transport is alive and well – it’s never been better,” he said.