Warnings about privatisation of the East Coast show that it’s high time to reform our railways 

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This week Britain’s competition watchdog, the Competition and Markets Authority (CMA), published serious warnings over the Government’s decision to award the contract to operate the East Coast main rail line to Stagecoach and Virgin Trains, citing concerns regarding their share of the London-Scotland market.  The CMA said there was “a realistic prospect” of “higher fares or reduced services” on parts of the line.  This latest blow to the Government once again demonstrates why this privatisation should never be happening in the first place.

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The CMA has highlighted two big potential problems with the Government’s East Coast main line contract, which could result in a reduction of competition on certain routes.  They warned that this could lead to both higher fares and reduced service quality for rail passengers travelling between Peterborough, Grantham and Lincoln, and for coach and rail passengers travelling between Edinburgh, Dundee and Aberdeen.  This could affect thousands of passengers relying on these services.

If these problems are not resolved within a week, the watchdog said it will have no choice but to launch a full, in-depth investigation, rightly throwing the whole contract into question.

It is now clearer than ever that David Cameron put privatisation ahead of the public interest when he decided to privatise the East Coast main line.  Since 2009, the public operator, Directly Operated Railways, has successfully operated the East Coast service, achieving record performance and passenger satisfaction, whilst investing in services and delivering below average fare increases.

On top of this, East Coast trains will have returned over £1 billion back to the Treasury and taxpayers by the end of this month.   But despite this impressive record, the Government pursued an ideologically driven, politically rigged timetable to ensure that the East Coast franchise would be re-tendered back to the private sector ahead of the General Election in order to try and kill off the very idea of having a public sector operator.

The absurdity of the process was characterised by the Government allowing every other train company in the world, including the European state operators, to compete for the service. So the only people barred from even bidding were the people who were running the service well because they were both British and public sector.

But this is not the first franchise fiasco this Government has presided over.  We all remember the West Coast competition, which cost the taxpayer over £50 million. The ensuing direct awards to private operators that are thought to have cost us well over £300 million in lost revenue.

We know that it’s not just the CMA that has concerns about the franchise. A Survation poll showed that the majority of the public opposes the Government’s privatisation of the East Coast main line.   And when Labour launched our petition back in December to halt the process, in an effort to stop the Government signing the contract with Stagecoach and Virgin, we amassed thousands of signatures in a matter of weeks.

Labour wants to see big changes on our railways.  We want action on fares and a strong passenger voice.  We have also called for a wholesale review of the franchise process as a different approach is needed – one that puts the public interest first, reverses the presumption against the public sector and properly stands up for passengers who have paid inflation-busting fares under this Government.

We are also determined to see a public sector operator that can take on and challenge these private companies currently running our railways.  The CMA’s warnings about the East Coast are just the latest evidence that shows once again it’s high time for reform of our railways.

Michael Dugher MP is the Member of Parliament for Barnsley East and the Shadow Secretary of State for Transport

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