Unite has called for the East Coast rail service to be permanently taken back into public ownership, following the government’s decision to temporarily renationalise it in the wake of its operators failing to meet payments.
Transport secretary Chris Grayling announced yesterday (May 16) that the London to Edinburgh service will return to public ownership on June 24 until 2020, after operators Stagecoach and Virgin could longer meet payments on the £3.3bn contract.
The line, on which three franchises have failed in a decade despite being run at a profit when it was publicly owned between 2009 and 2015, will be rebranded as the London and North East Railway and be operated by the Arup firm under government control.
Grayling told the House of Commons that he decided to appoint an “operator of last resort” rather than allow Virgin and Stagecoach to negotiate new terms.
Grayling insisted taxpayers had not lost money from the franchise’s failure, saying, “The route continues to generate substantial returns for the government. It is not a failing railway… However, Virgin and Stagecoach got their bids wrong.”
Virgin or Stagecoach could be prevented from bidding for other rail franchises, Grayling added.
He said, “They have paid a high financial and reputational price.”
Responding the announcement, Unite said “after a hat-trick of failures on the East Coast mainline in the last 10 years with ministers having to intervene, now is the time for this service to be brought back under state ownership permanently”.
Unite national lead officer for the rail industry Hugh Roberts said, “It is clear that the privatisation of the railways – the misguided brainchild of John Major’s Tory government in the 1990s – has hit the buffers. It has reached the end of the line.
“Bringing back the East Coast mainline under public control permanently should be the first stage in returning the whole network to public ownership.”
Roberts said rail privatisation has been an “expensive and ideologically-driven” failure that has been constant drain on the taxpayer.
He said, “It would be best for the economy, the Treasury and the hard-pressed rail traveller paying through the nose for their tickets, if ministers blew the whistle on rail privatisation.”
Tweeting after Grayling’s announcement, shadow chancellor John McDonnell mocked the Tories’ dismal record on the railways.
McDonnell tweeted, “Good to see Grayling implementing first stage of Labour’s Manifesto promise to renationalise the railways.
“I think I’m right in saying that he’s now nationalised more railways than any Labour minister in six decades. Come on Chris, East Coast line today, the whole system tomorrow.”