John Prescott
Last week I exposed how the sale of the East Coast rail franchise and Eurostar – claimed by Osborne as a victory for the taxpayer – was a tiny 0.71 per cent cut in the £530billion rise in national debt he’s caused since 2010.
The real winners are Virgin and Stagecoach. They now dominate the main road and rail links on the east and west coasts.
When I was Labour’s spokesman for transport, before John Major privatised the railways, Sir Richard Branson told me he wanted to buy the East Coast and the West Coast service.
I was against it.
But thanks to the Tory-Lib Dem coalition, Branson and Stagecoach’s Sir Brian Souter have finally got their way.
Their assumption is that private is always better than public.
In fact Branson said: “It was strange to hear talk about switching the clock back to nationalisation and the horrors that went with it.”
But any factual analysis will show that the Virgin West Coast service is more expensive and pays less than the East Coast service to the Treasury while securing a massive dividend for their shareholders, financed by a 200 per cent increase in rail fares – the highest in Europe.
From 2009 until 2014, a state-run East Coast Trains delivered £1billion back to the taxpayer. Virgin West Coast could only manage a third of that – and that sum went to its shareholders!
The publicly-owned East Coast railways provided a better service, a better return, was less costly and made the Treasury money.
Virgin and Stagecoach have agreed to buy East Coast for £3billion – twice as much as the previous private owners of the East Coast service, GNER and National Express.
Neither could afford to pay their way so how can Stagecoach-Virgin make it work?
The only way paying twice as much can work, as Branson admits, is to secure more passengers.
On the West Coast route this was achieved by shorter journey times and more frequent trains due solely to the £9billion the taxpayer paid for improving the track.
Presumably they will be looking for a similar contribution from the taxpayer for improving the East Coast track, leading to a big increase in prices.
If Virgin Stagecoach is so good, why did the Department for Transport initially take the West Coast route away from them, only for that to be overturned because of a government cock-up in the bidding process?
Stagecoach also lost the Cross Country franchise because of its poor service and its South West Trains service has one of the highest passenger disapproval ratings.
Stagecoach is now threatening to pull all its buses out of Newcastle just because the transport authority is demanding a quality service contract from its bus providers.
Souter claims the move is “Stalinist”!
Thankfully this brinkmanship is not possible under a rail system because rolling stock is leased from a separate company. But it shows the type of man he really is.
It’s always the taxpayer that ends up carrying the risk as it was with the Eurostar trains, which collapsed in 1997 because of a shortfall of £2billion.
I had to rescue it and bring it into public ownership.
Like East Coast Trains, it prospered in public hands and has now been sold by the Tories for a quick buck ahead of the election.
The taxpayer is worse off. The Treasury is worse off. And the real beneficiaries are the private shareholders who carry no risk.
So let’s break up the Stagecoach-Virgin monopoly. They were handed a three-year extension to run the West Coast until 2017.
Letting Branson and Souter have a loop service around Britain has created an uncompetitive private monopoly.
So if Labour comes into power, when the franchise lapses in two years it should take West Coast back into public control and start to end the “horrors” of privatisation.
Sir Richard Branson and Sir Brian Souter are the commuters’ worst knight-mares.
Last week I exposed how the sale of the East Coast rail franchise and Eurostar – claimed by Osborne as a victory for the taxpayer – was a tiny 0.71 per cent cut in the £530billion rise in national debt he’s caused since 2010.
The real winners are Virgin and Stagecoach. They now dominate the main road and rail links on the east and west coasts.
When I was Labour’s spokesman for transport, before John Major privatised the railways, Sir Richard Branson told me he wanted to buy the East Coast and the West Coast service.
I was against it.
But thanks to the Tory-Lib Dem coalition, Branson and Stagecoach’s Sir Brian Souter have finally got their way.
Their assumption is that private is always better than public.
In fact Branson said: “It was strange to hear talk about switching the clock back to nationalisation and the horrors that went with it.”
But any factual analysis will show that the Virgin West Coast service is more expensive and pays less than the East Coast service to the Treasury while securing a massive dividend for their shareholders, financed by a 200 per cent increase in rail fares – the highest in Europe.
From 2009 until 2014, a state-run East Coast Trains delivered £1billion back to the taxpayer. Virgin West Coast could only manage a third of that – and that sum went to its shareholders!
The publicly-owned East Coast railways provided a better service, a better return, was less costly and made the Treasury money.
Virgin and Stagecoach have agreed to buy East Coast for £3billion – twice as much as the previous private owners of the East Coast service, GNER and National Express.
Neither could afford to pay their way so how can Stagecoach-Virgin make it work?
The only way paying twice as much can work, as Branson admits, is to secure more passengers.
On the West Coast route this was achieved by shorter journey times and more frequent trains due solely to the £9billion the taxpayer paid for improving the track.
Presumably they will be looking for a similar contribution from the taxpayer for improving the East Coast track, leading to a big increase in prices.
If Virgin Stagecoach is so good, why did the Department for Transport initially take the West Coast route away from them, only for that to be overturned because of a government cock-up in the bidding process?
Stagecoach also lost the Cross Country franchise because of its poor service and its South West Trains service has one of the highest passenger disapproval ratings.
Stagecoach is now threatening to pull all its buses out of Newcastle just because the transport authority is demanding a quality service contract from its bus providers.
Souter claims the move is “Stalinist”!
Thankfully this brinkmanship is not possible under a rail system because rolling stock is leased from a separate company. But it shows the type of man he really is.
It’s always the taxpayer that ends up carrying the risk as it was with the Eurostar trains, which collapsed in 1997 because of a shortfall of £2billion.
I had to rescue it and bring it into public ownership.
Like East Coast Trains, it prospered in public hands and has now been sold by the Tories for a quick buck ahead of the election.
The taxpayer is worse off. The Treasury is worse off. And the real beneficiaries are the private shareholders who carry no risk.
So let’s break up the Stagecoach-Virgin monopoly. They were handed a three-year extension to run the West Coast until 2017.
Letting Branson and Souter have a loop service around Britain has created an uncompetitive private monopoly.
So if Labour comes into power, when the franchise lapses in two years it should take West Coast back into public control and start to end the “horrors” of privatisation.
Sir Richard Branson and Sir Brian Souter are the commuters’ worst knight-mares.
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