Labour attacks ‘costly’ privatisation

Shadow Transport Secretary Maria Eagle hit out at Ministers who say East Coast has failed to deliver the reliability or investment required for passengers and must be handed back to a private operator as soon as possible.

The Labour front-bencher told MPs that since being taken into public hands, the East Coast line has delivered “three million more seats, best-ever punctuality, the lowest taxpayer subsidy, £40 million of extra profit invested, and £800 million returned to the taxpayer” - and so should be left as a state-run concern.

Her attack followed comments by Rail Minister Simon Burns before the Commons transport committee this week that the performance of East Coast has “plateaued” since being nationalised in 2009 following the collapse of its contract with National Express.

He said East Coast is now the least punctual of all 19 rail contracts around the UK.

The Government wants a new 15-year private contract up and running by February 2015 - three months before the next general election - and insists the move will hasten much-needed investment in East Coast track upgrades.

But speaking in the Commons yesterday, Ms Eagle said privatisation would prove “costly” for taxpayers and was “completely unnecessary” given East Coast’s current performance.

She said investment in track upgrades would come from the taxpayer via Network Rail, regardless of who is in charge of running train services.

“It does not sound like the Minister actually knows what is happening on the East Coast Main Line,” she said. “He should stop talking it down.

“All of the planned East Coast upgrade will be paid for by the taxpayer. None of this investment is dependent on privatisation.

“The fact is private train companies now receive more from the taxpayer each year than they pay back in - so why is he doing this?”

Last week a report by the independent rail regulator concluded that the state-run East Coast line has required less public subsidy than any of the privately-owned lines since 2009.

Labour and trade unions have seized upon the report as evidence that privatisation has proved costly for the taxpayer.

North East MP Ian Mearns said: “Sadly, private ownership has failed the travelling public of the East Coast franchise. What possible public benefit can be gained by another wasteful and expensive round of refranchising?”

But Mr Burns insisted rail privatisation has been a huge success.

“Since privatisation, rail numbers have doubled and passenger satisfaction is at an all-time high,” he said. “Recent European research has shown that the countries with the greatest growth in rail travel are those with the most liberalised markets.”

On the nationalised East Coast service, he added: “The operator did a reasonable job in difficult circumstances when it had to take over the direct operation, but it has now reached a plateau.

“Yes, there will be taxpayers’ money involved in investing in the East Coast mainline.

“But the involvement of the private sector means we can increase, over and above the taxpayers’ money, the money that can be invested in enhancing the service for passengers.”

He was backed by Harrogate and Knaresborough’s Tory MP Andrew Jones, who said: “The private sector has a record of significant investment and innovation in our railways, and of growing the numbers of people using them.”

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