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East Coast Main Line Outrage

27th November 2014

East Coast Main Line: Passengers and Taxpayers to be Looted by Private Sector Firms

Outrageously, the government has awarded the East Coast franchise to a consortium of Virgin and Stagecoach. If this is an ‘economic’ decision, it is the economics of the madhouse.

Here is a statement from the rail union RMT

In 2009 National Express handed back the franchise for the East Coast Mainline (ECML) to the government. Abandoning the franchise was a disgraceful negation of the operator’s responsibility and inevitably caused huge uncertainty and disruption.

Since the keys were handed back, public ownership (in the form of Directly Operated Railways Ltd) has provided an improved service and vastly more revenue for the Treasury.

Specifically, according to answers to questions tabled by the RMT Parliamentary Group, Directly Operated Railways Ltd has (since November 2009) paid £602m in premium payments. This is £232m more than National Express paid back during its tenure and over £209m more than the amount paid in by Virgin/Stagecoach on the West Coast Mainline since 2009-10.

And ECML in the public sector is virtually subsidy free. Public subsidy accounted for only 1.2% of ECML’s total income in 2011-12, compared to an average of 32.1% of the income of the private train operating companies on the 15 other passenger rail franchises.

Despite this, the Conservative-led government is ideologically wedded to returning ECML to the private sector.

Manuel Cortes, leader of the TSSA rail union, agrees:

Manuel said: This is nothing short of economic vandalism by a Chancellor who does not want voters to know the truth about the East Coast line - it is a public sector success story.
It has been the cheapest franchise to run for the past five years and it has produced the greatest return to taxpayers, over £600 million.
By selling it off before the election, he wants to hide those facts. We have the highest fares in Europe because we are the only country with a fragmented privately run rail network.

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Action For Rail


Rail bosses are using the recession as an excuse to attack jobs and conditions and cut back on services and essential rail works, and hike rail fares - as LEAP research suggested they would. Thousands of jobs are being threatened or have been lost. At the same time rail fat cats are raking in big profits and bonuses on the back of the most expensive fares in Europe. Make no mistake: as the recession worsens so will the attack on rail workers and rail services. [continue...]

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