Labour to demand answers from Chris Grayling on Virgin/Stagecoach bail-out

Chris Grayling

Labour’s Shadow Transport Secretary Andy McDonald will today demand that the Secretary of State, Chris Grayling, detail the cost to the public purse of the recent taxpayer bailout of Virgin/Stagecoach on the East Coast, which could reach £2bn. Labour will also warn that a failure to take services back into public ownership will result in struggling train operating companies demanding similar bailouts in future, potentially costing taxpayers hundreds of millions or billions of pounds.

Labour’s motion exposes above-inflation fare rises since 2010 and opposes the recent taxpayer bailout of Virgin Trains Group East Coast. This follows drops in season ticket purchases – the core business of rail companies – and an overall decline in ticket sales, suggesting that prohibitive fares are pricing passengers off the railway. Labour has also warned that the bailout of Virgin East Coast that threatens the sustainability of the rail franchising system.

The exact wording of the motion, which was tabled on Tuesday, is:

That this House believes that rail franchising is failing to provide adequate services for passengers or value for money for taxpayers; notes that regulated rail fares have risen by 32 per cent since 2010 while planned investment has been cancelled; opposes the recent bail-out of Virgin Rail Group East Coast; and calls on the Government to run passengers’ services under public sector operation.

The debate will coincide with the release of a damning National Audit Office report on the Thameslink, Southern and Great Northern rail franchise, which states that the TSGN franchise has not delivered value for money and that the Department for Transport failed to consider passengers properly.

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Shadow Transport Secretary Andy McDonald

Shadow Transport Secretary Andy McDonald MP said:

Thameslink, Southern and Great Northern (TSGN) passengers understand the failings of privatised rail as well as anyone. The National Audit Office’s (NAO) claim that passenger misery could have been avoided if the DfT had taken more care to consider passengers is true for the entire railway. Government payouts to companies failing to deliver decent services, soaring fares and poor industrial relations are hallmarks of privatised rail.

The Conservative policy of privatised rail is not sustainable. Fares have risen three times faster than wages since 2010 and passengers are being priced off the railway. A failure to make fares more affordable threatens the sustainability of Britain rail network, which would spell disaster for the economy and the environment.

Not only is fare-payer and taxpayer cash being extracted as profit or wasted through our fragmented, inefficient railway, bailouts of failing train companies have become the norm. A refusal to consider public ownership, even as a last resort, leaves our Transport Secretary dancing to the tune of private rail companies.

This Government is not honest with the public about rail. It sets fares but will not defend them and supports franchising while all the evidence points to its failings. Labour will bring our railways back into public ownership so that they are run in the interests of the many, not the few.

The opposition day debate is scheduled to be the second debate after Prime Minister’s Questions on Wednesday 10th January 2018.

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  1. While he’s got him at the dispatch box, ask him how much Carillion is going to cost the taxpayer. If Carillion is not proof capitalism has failed I don’t know what is.

  2. 25 years after privatisation and the taxpayer is still subsiding private profit taking railway operators.

    Even worse, those subsidies are double the amount received by BR.

    And now we learn that when the failed privatisation model completely breaks down, the Conservative Party is wasting billions of pounds of taxpayers’ money to allow private companies to dishonour contracts to allow this farce to continue rather than admit their experiment has failed.

    Worse and worse.

  3. Tories keep saying how bad British rail was, wasn’t it in the Hands of a Tory government more than Labour

  4. Once again the squalid Tory Government gives Branson our money! another capitalist scumbag laughs all the way to his offshore bank to put our hard earned cash with the Queens wealth which she got from us anyway! Ain’t Democracy grand?

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